EXHIBIT 1.1
TEXON INTERNATIONAL PLC
DM 245 million
10% Senior Notes due 2008
PURCHASE AGREEMENT
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January 27, 1998
CHASE MANHATTAN INTERNATIONAL LIMITED
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CHASE SECURITIES INC.
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
CHASE MANHATTAN BANK AG
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▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇
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Ladies and Gentlemen:
Texon International plc, a company incorporated under the laws of
England and Wales (the "Company"), proposes to issue and sell DM 245 million
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aggregate principal amount of its 10% Senior Notes due 2008 (the "Securities").
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The Securities will be issued pursuant to an Indenture to be dated as of January
30, 1998 (the "Indenture") between the Company and The Bank of New York, as
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trustee (in such capacity, the "Trustee"). The Company hereby confirms its
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agreement with Chase Manhattan International Limited ("CMIL"), Chase Securities
Inc. ("CSI") and Chase Manhattan Bank AG (together with CMIL and CSI, the
"Initial Purchasers") concerning the purchase of the Securities from the Company
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by the Initial Purchasers.
The Securities will be offered and sold to the Initial Purchasers
without being registered under the U.S. Securities Act of 1933, as amended (the
"Securities Act"), in reliance upon an exemption therefrom. The Company has
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prepared a preliminary offering memorandum dated January 5, 1998 and
supplemented January 26, 1998 (the "Preliminary Offering Memorandum") and will
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prepare an offering memorandum dated the date hereof (the "Offering Memorandum")
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setting forth information concerning the Company and the Securities. Copies of
the Preliminary Offering Memorandum
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have been, and copies of the Offering Memorandum will be, delivered by the
Company to the Initial Purchasers pursuant to the terms of this Agreement. Any
references herein to the Preliminary Offering Memorandum and the Offering
Memorandum shall be deemed to include all amendments and supplements thereto,
unless otherwise noted. The Company confirms that it has authorized the use of
the Preliminary Offering Memorandum and the Offering Memorandum in connection
with the offering and resale of the Securities by the several Initial Purchasers
in accordance with Section 2.
Holders of the Securities (including the Initial Purchasers and their
direct and indirect transferees) will be entitled to the benefits of an Exchange
and Registration Rights Agreement, substantially in the form attached hereto as
Annex A (the "Registration Rights Agreement"), pursuant to which the Company
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will agree to file with the U.S. Securities and Exchange Commission (the
"Commission") (i) a registration statement under the Securities Act (the
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"Exchange Offer Registration Statement") registering an issue of senior notes of
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the Company (the "Exchange Securities") which are identical in all material
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respects to the Securities (except that the Exchange Securities will not contain
terms with respect to transfer restrictions) and (ii) under certain
circumstances, a shelf registration statement pursuant to Rule 415 under the
Securities Act (the "Shelf Registration Statement").
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Immediately prior to or concurrent with the consummation of the sale
of the Securities to the Initial Purchasers, the Acquisition (as defined below)
will be completed. Additionally, the Machinery Disposal (as defined below) has
been consummated as of December 31, 1997. The "Acquisition" refers to the
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Company's acquisition of all the issued capital stock of United Texon Limited
(such entity, together with its subsidiaries, is referred to herein as "United
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Texon") pursuant to the Acquisition Agreement (the "Acquisition Agreement"),
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dated December 23, 1997 between the Company and the shareholders of United Texon
(the "United Texon Shareholders") and the related financing thereof. The
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"Machinery Disposal" refers to the transfer to certain of the United Texon
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Shareholders of USM Group Limited, together with the former subsidiaries of
United Texon engaged in the business of selling and servicing machines used to
manufacture shoes, pursuant to the Stock Purchase Agreement, dated December 23,
1997 between United Texon and USM Group Holdings Limited (the "Stock Purchase
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Agreement"). The Stock Purchase Agreement and the Inter-Company Funding
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Agreement, dated December 23, 1997 between USM Group Limited and United Texon,
are referred to
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collectively as the "Machinery Disposal Agreements". The Acquisition and the
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Machinery Disposal are referred to collectively as the "Transactions". In
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connection with the Transactions, the Company will enter into a Facility
Agreement, to be dated on or about January 29, 1998 (together with the other
financing documents to be entered into pursuant thereto, the "Senior Finance
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Documents"), among the Company, Chase Manhattan plc, as Arranger, The Chase
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Manhattan Bank and certain other financial institutions named therein as
Original Lenders, The Chase Manhattan Bank, as Issuing Bank, and CMIL, as Agent
and Security Agent, providing for senior credit facilities in an aggregate
principal amount of up to (Pounds)15.0 million (the "Senior Credit Facility").
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The Offering is contingent upon the concurrent consummation of the Acquisition
and the initial borrowings under the Senior Credit Facility.
This Agreement, the Indenture, the Registration Rights Agreement, the
Note Depositary Agreement to be dated as of January 30, 1998 (the "Depositary
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Agreement"), between the Company and The Bank of New York, as book-entry
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depositary (in such capacity, the "Book-Entry Depositary"), the Securities, the
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Acquisition Agreement, the Machinery Disposal Agreements and the Senior Finance
Documents are referred to herein collectively as the "Transaction Documents".
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Capitalized terms used but not defined herein shall have the meanings
given to such terms in the Offering Memorandum. References to the subsidiaries
of the Company herein refer to each direct and indirect subsidiary of the
Company after giving effect to the Transactions.
1. Representations, Warranties and Agreements of the Company. The
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Company represents and warrants to, and agrees with, the several Initial
Purchasers on and as of the date hereof and the Closing Date (as defined in
Section 3) that:
(a) Each of the Preliminary Offering Memorandum and the Offering
Memorandum, as of its respective date, did not, and on the Closing Date the
Offering Memorandum will not, contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that the
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Company makes no representation or warranty as to information contained in
or omitted from the Preliminary Offering Memorandum or the Offering
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Memorandum in reliance upon and in conformity with written information
furnished to the Company by or on behalf of any Initial Purchaser
specifically for use therein (as set forth in Section 15 of this Agreement,
the "Initial Purchasers' Information").
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(b) Each of the Preliminary Offering Memorandum and the Offering
Memorandum, as of its respective date, contains all of the information
that, if requested by a prospective purchaser of the Securities, would be
required to be provided to such prospective purchaser pursuant to Section
(d)(4) of Rule 144A under the Securities Act ("Rule 144A").
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(c) Assuming the accuracy of the representations and warranties of
the Initial Purchasers contained in Section 2 and their compliance with the
agreements set forth therein, it is not necessary, in connection with the
issuance and sale of the Securities to the Initial Purchasers and the
offer, resale and delivery of the Securities by the Initial Purchasers in
the manner contemplated by this Agreement and the Offering Memorandum, to
register the Securities under the Securities Act or to qualify the
Indenture under the U.S. Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act").
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(d) The Company and each of its Material Subsidiaries (as defined
below) have been duly incorporated and are validly existing as corporations
in good standing under the laws of their respective jurisdictions of
incorporation, are duly qualified to do business and are in good standing
as foreign corporations in each jurisdiction in which their respective
ownership or lease of property or the conduct of their respective
businesses requires such qualification, and have all power and authority
necessary to own or hold their respective properties and to conduct the
businesses in which they are engaged, except where the failure to so
qualify or have such power or authority would not, singularly or in the
aggregate, have a material adverse effect on the condition (financial or
otherwise), results of operations, business or prospects of the Company and
its subsidiaries taken as a whole (a "Material Adverse Effect"). "Material
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Subsidiaries" refers to the companies listed in Schedule I hereto.
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(e) The Company, upon consummation of the Acquisition, will have an
authorized capitalization as
5
set forth in the Offering Memorandum under the heading "Capitalization";
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all of the outstanding shares of capital stock of the Company have been
duly and validly authorized and issued and are fully paid and non-
assessable; and the capital stock of the Company conforms in all material
respects to the description thereof contained in the Offering Memorandum.
All of the outstanding shares of capital stock of each Material Subsidiary
of the Company have been duly and validly authorized and issued, are fully
paid and non-assessable. The Company owns directly or indirectly at least
99% of the outstanding shares of capital stock of each Material Subsidiary,
except for the capital stock of Foshan Texon Cellulose Board Manufacturing
Company Limited ("Foshan"), of which the Company owns 57.6% of the
outstanding shares. Such shares are owned free and clear of any lien,
charge, encumbrance, security interest, restriction upon third party voting
or transfer or any other claim of any third party (except pursuant to (i)
the stockholders agreement of Foshan and (ii) the Senior Finance Documents
or any of the Security Documents (as defined in the Senior Finance
Documents)).
(f) Each of the Company and each of its Material Subsidiaries party
to any Transaction Document has full right, power and authority to execute
and deliver each of the Transaction Documents to which it is a party and to
perform its obligations thereunder; and all corporate action required to be
taken for the due and proper authorization, execution and delivery of each
of the Transaction Documents and the consummation of the transactions
contemplated thereby has been duly and validly taken.
(g) This Agreement has been duly authorized, executed and delivered
by the Company and this Agreement constitutes a valid and legally binding
agreement of the Company, enforceable against the Company in accordance
with its terms, except to the extent that such enforceability may be
limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors'
rights generally and by general equitable principles (whether considered in
a proceeding in equity or at law).
(h) The Registration Rights Agreement has been duly authorized by the
Company and, when duly executed and delivered in accordance with its terms
by each of
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the parties thereto, will constitute a valid and legally binding agreement
of the Company, enforceable against the Company in accordance with its
terms, except to the extent that such enforceability may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws affecting creditors' rights generally
and by general equitable principles (whether considered in a proceeding in
equity or at law).
(i) The Depositary Agreement has been duly authorized by the Company
and, when duly executed and delivered in accordance with its terms by each
of the parties thereto, will constitute a valid and legally binding
agreement of the Company, enforceable against the Company in accordance
with its terms, except to the extent that such enforceability may be
limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors'
rights generally and by general equitable principles (whether considered in
a proceeding in equity or at law).
(j) The Indenture has been duly authorized by the Company and, when
duly executed and delivered in accordance with its terms by each of the
parties thereto, will constitute a valid and legally binding agreement of
the Company, enforceable against the Company in accordance with its terms,
except to the extent that such enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws affecting creditors' rights generally and by general
equitable principles (whether considered in a proceeding in equity or at
law). On the Closing Date, the Indenture will conform in all material
respects to the requirements of the Trust Indenture Act and the rules and
regulations of the Commission applicable to an indenture which is qualified
thereunder, other than the Trustee being qualified in accordance with the
Trust Indenture Act.
(k) The Securities and the Exchange Securities have been duly
authorized by the Company and, when duly executed, authenticated, issued
and delivered as provided in the Indenture and paid for as provided herein
or, in the case of Exchange Securities, exchanged for Securities as
contemplated in the Registration Rights Agreement, will be duly and validly
issued and outstanding and will constitute valid and
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legally binding obligations of the Company, entitled to the benefits of the
Indenture and enforceable against the Company in accordance with their
terms, except to the extent that such enforceability may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws affecting creditors' rights generally
and by general equitable principles (whether considered in a proceeding in
equity or at law).
(l) The Acquisition Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and legally binding
agreement of the Company, enforceable against the Company in accordance
with its terms, except to the extent that such enforceability may be
limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors'
rights generally and by general equitable principles (whether considered in
a proceeding in equity or at law).
(m) Each of the Machinery Disposal Agreements has been duly
authorized, executed and delivered by United Texon and constitutes a valid
and legally binding agreement of United Texon, enforceable against United
Texon in accordance with its terms, except to the extent that such
enforceability may be limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
affecting creditors' rights generally and by general equitable principles
(whether considered in a proceeding in equity or at law).
(n) Each of the Senior Finance Documents has been duly authorized by
the Company and, when duly executed and delivered in accordance with their
terms by each of the parties thereto, the Senior Finance Documents will
constitute valid and legally binding obligations of the Company,
enforceable against the Company in accordance with their terms, except to
the extent that such enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws affecting creditors' rights generally and by general
equitable principles (whether considered in a proceeding in equity or at
law).
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(o) Each Transaction Document conforms in all material respects to
the description thereof contained in the Offering Memorandum.
(p) (i) The execution, delivery and performance by the Company and
each of its subsidiaries of each of the Transaction Documents (each to the
extent a party thereto), (ii) the issuance, authentication, sale and
delivery of the Securities and compliance by the Company with the terms
thereof and (iii) the consummation of the transactions contemplated by the
Transaction Documents will not 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 (other than those contemplated by the Senior Finance Documents)
upon any property or assets of the Company or any of its subsidiaries
pursuant to, any material indenture, mortgage, deed of trust, loan
agreement or other material 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, except where any such
conflict, breach, violation, default or creation (singularly or in the
aggregate) would not have a Material Adverse Effect or a material adverse
effect on the ability of the Company or any of its subsidiaries a party to
any Transaction Document to perform its obligations under the Transaction
Documents, nor will such actions result in any violation of the provisions
of the charter or by-laws or memorandum or articles of association (or
other constitutive documents) of the Company or any of its subsidiaries or
any statute or law or any judgment, order, decree, rule or regulation of
any court or arbitrator or governmental agency or body having jurisdiction
over the Company or any of its subsidiaries or any of their properties or
assets, except where any such violation (singularly or in the aggregate)
would not have a Material Adverse Effect or a material adverse effect on
the ability of the Company or any of its subsidiaries a party to any
Transaction Document to perform its obligations under the Transaction
Documents; and no consent, approval, authorization or order of, or filing
or registration with, any such court or arbitrator or governmental agency
or body under any such statute, judgment, order, decree, rule or regulation
is required for (i) the execution, delivery and performance by the Company
and
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each of its subsidiaries of each of the Transaction Documents (each to the
extent a party thereto), (ii) the issuance, authentication, sale and
delivery of the Securities and compliance by the Company with the terms
thereof and (iii) the consummation of the transactions contemplated by the
Transaction Documents, except for such consents, approvals, authorizations,
filings, registrations or qualifications (A) which shall have been obtained
or made prior to the Closing Date or which are to be made following the
Closing Date with the Luxembourg Stock Exchange (the "Luxembourg Stock
Exchange") or required to be made following the Closing Date pursuant to
the provisions of the Restrictive Trade Practices Act 1976 (B) as may be
required to be obtained or made under the Securities Act as provided in the
Registration Rights Agreement and applicable state securities laws.
(q) Except as disclosed in the Offering Memorandum, under current
practice of the Inland Revenue of the United Kingdom and under current laws
and regulations (and interpretations thereof) of the United Kingdom and any
political subdivision thereof, all interest, principal, premium, if any,
and other payments due or made on the Securities and the Exchange
Securities may be paid by the Company to the Holder thereof in German
Deutsche Marks and all such payments made to Holders thereof who are non-
residents of the United Kingdom and do not have a branch, agency or
permanent establishment nor carry on a trade in the United Kingdom to which
the holding of Securities or Exchange Securities is attributable, will not
be subject to income, withholding or other taxes under laws and regulations
of the United Kingdom or any political subdivision or taxing authority
thereof or therein and will otherwise be free and clear of any other tax,
duty, withholding or deduction in the United Kingdom or any political
subdivision or taxing authority thereof or therein and without the
necessity of obtaining any governmental authorization in the United Kingdom
or any political subdivision or taxing authority thereof or therein.
(r) To the best of the Company's knowledge after reasonable
investigation, KPMG are independent certified public accountants with
respect to the Company and its subsidiaries within the meaning of Rule 101
of the Code of Professional Conduct of the American Institute of Certified
Public Accountants ("AICPA") and its interpretations and rulings
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thereunder. The
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historical financial statements (including the related notes) contained in
the Offering Memorandum comply in all material respects with the
requirements applicable to a registration statement on Form F-1 under the
Securities Act (except that certain supporting schedules are omitted and
except for financial information required by such requirements for the
fiscal year ended December 31, 1997); such financial statements have been
prepared in accordance with U.K. generally accepted accounting principles
consistently applied throughout the periods covered thereby and fairly
present, in all material respects, the financial position of the entities
purported to be covered thereby at the respective dates indicated and the
results of their operations and their cash flows for the respective periods
indicated except as otherwise stated in the Offering Memorandum; and the
financial information contained in the Offering Memorandum under the
headings "Summary-Summary Historical and Unaudited Pro Forma Consolidated
Financial Information and Other Data", "Capitalization", "Selected
Historical and Unaudited Pro Forma Consolidated Financial Information and
Other Data", "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and "Management-Compensation of Directors and
Officers" are derived from the accounting records of the Company (except
for the adjustments and assumptions stated therein) and its subsidiaries
and fairly present, in all material respects, the information purported to
be shown thereby. The pro forma and adjusted historical financial
information contained in the Offering Memorandum has been prepared on a
basis consistent with the historical financial statements contained in the
Offering Memorandum (except for the pro forma adjust ments specified
therein, including the adjustments therein for currency conversion and the
presentation of "Other Data"), includes all material adjustments to the
historical financial information to reflect the transactions described in
the Offering Memorandum, gives effect to assumptions made on a reasonable
basis and fairly presents, in all material respects, the historical and
proposed transactions contemplated by the Offering Memorandum and the
Transaction Documents.
(s) 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
or assets of the Company or any of its subsidiaries is the subject which,
singularly or in the aggregate, if determined adversely to the Company or
any of its
11
subsidiaries, could reasonably be expected to have a Material Adverse
Effect; and to the best knowledge of the Company, no such proceedings are
threatened or contemplated by governmental authorities or threatened by
others.
(t) No action has been taken and no statute, rule, regulation or
order has been enacted, adopted or issued by any governmental agency or
body which prevents the issuance of the Securities or suspends the sale of
the Securities in any jurisdiction; no injunction, restraining order or
order of any nature by any U.K. or any U.S. Federal or state court of
competent jurisdiction has been issued with respect to the Company or any
of its subsidiaries which would prevent or suspend the issuance or sale of
the Securities or the use of the Preliminary Offering Memorandum or the
Offering Memorandum in any jurisdiction; no action, suit or proceeding is
pending against or, to the best knowledge of the Company, threatened
against or affecting the Company or any of its subsidiaries before any
court or arbitrator or any governmental agency, body or official, domestic
or foreign, which could reasonably be expected to (i) interfere with or
adversely affect the issuance of the Securities or (ii) in any manner draw
into question the validity or enforceability of any of the Transaction
Documents or any action taken or to be taken pursuant thereto; and the
Company has complied with any and all requests by the Luxembourg Exchange
for additional information to be included in the Listing Application (as
defined below) and has received no request from the Luxembourg Exchange or
any securities authority in any jurisdiction for additional information to
be included in the Preliminary Memorandum or the Offering Memorandum which
has not been complied with.
(u) Neither the Company nor any of its Material Subsidiaries is (i)
in violation of its charter or by-laws or memorandum or articles of
association (or other constitutive documents), (ii) in default in any
material respect, and no event has occurred which, with notice or lapse of
time or both, would constitute such a default, in the due performance or
observance of any term, covenant or condition contained in any material
indenture, mortgage, deed of trust, loan agreement or other material
agreement or instrument to which it is a party or by which it is bound or
to which any of its property or assets is subject or (iii) in violation in
any material respect of any law, ordinance,
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governmental rule, regulation or court decree to which it or its property
or assets may be subject.
(v) The Company and each of its subsidiaries possess all material
licenses, certificates, authorizations and permits issued by, and have made
all declarations and filings with, the appropriate regulatory agencies or
bodies which are necessary or desirable for the ownership of their
respective properties or the conduct of their respective businesses as
described in the Offering Memorandum, except where the failure to possess
or make the same would not, singularly or in the aggregate, have a Material
Adverse Effect, and neither the Company nor any of its Material
Subsidiaries has received notification of any revocation or modification of
any such license, certificate, authorization or permit or has any reason to
believe that any such license, certificate, authorization or permit will
not be renewed in the ordinary course.
(w) The Company has delivered to the Initial Purchasers true and
correct copies of the Acquisition Agreement in the form as originally
executed (together with all exhibits and schedules thereto); the
Acquisition Agreement (together with such exhibits and schedules) and the
agreements specified therein to be entered into on or prior to the Closing
Date represent the entire agreement between the Company and the United
Texon Shareholders and their affiliates with respect to the Acquisition;
and there have been no amendments, supplements or waivers thereto
(including such exhibits, schedules or other agreements) other than those
as to which the Initial Purchasers shall have been advised in writing.
(x) The Company has delivered to the Initial Purchasers true and
correct copies of the Machinery Disposal Agreements in the form as
originally executed (together with all exhibits and schedules thereto); the
Machinery Disposal Agreements (together with such exhibits and schedules)
represent the entire agreement between United Texon and the United Texon
Shareholders, their affiliates and USM Group Limited with respect to the
Machinery Disposal; and there have been no amendments, supplements or
waivers thereto (including such exhibits, schedules or other agreements)
other than those as to which the Initial Purchasers shall have been advised
in writing.
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(y) As of the Closing Date, the Company shall have delivered to the
Initial Purchasers true and correct copies of the Senior Financing
Documents in the form as originally executed (together with all exhibits
and schedules thereto); the Senior Financing Documents (together with such
exhibits and schedules) represent the entire agreement between the Company
and the other parties thereto with respect to the Senior Credit Facility;
and there have been no amendments, supplements or waivers thereto
(including such exhibits and schedules) other than those as to which the
Initial Purchasers shall have been advised in writing.
(z) The Company and each of its Material Subsidiaries have filed, or
have requested extensions for, all income and franchise tax returns
required to be filed through the date hereof and have paid all taxes due
thereon, other than (i) those being contested in good faith and for which
adequate reserves have been provided or (ii) those currently payable
without penalty or interest; and no tax deficiency has been determined
adversely to the Company or any of its subsidiaries which has had, nor does
the Company or any of its subsidiaries have any knowledge of any tax
deficiency which, if determined adversely to the Company or any of its
subsidiaries, could reasonably be expected to have a Material Adverse
Effect.
(aa) Neither the Company nor any of its Material Subsidiaries is, or
after consummation of the transactions contemplated in the Transaction
Documents will be, (i) an "investment company" or a company "controlled
by" an investment company within the meaning of the Investment Company Act
of 1940, as amended (the "Investment Company Act"), and the rules and
----------------------
regulations of the Commission thereunder or (ii) a "holding company" or a
"subsidiary company" of a holding company or an "affiliate" thereof within
the meaning of the Public Utility Holding Company Act of 1935, as amended.
(bb) The Company and each of its Material Subsidiaries maintain a
system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
asset accountability; (iii) access to assets
14
is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared
with the existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(cc) The businesses, undertakings, properties and other assets of the
Company and each of its Material Subsidiaries are and, following the
Acquisition will be, insured in respect of such risks and for such amounts
as are normally insured against by persons carrying on similar businesses
as those carried on by the Company or its Material Subsidiaries and against
all material risks against which the Company or its Material Subsidiaries
would reasonably be expected to be insured in the circumstances of the
businesses and undertakings carried on by them.
(dd) The Company and each of its subsidiaries own or possess adequate
rights to use all material patents, patent applications, trademarks,
service marks, trade names, trademark registrations, service mark
registrations, copyrights, licenses and know-how (including trade secrets
and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures) necessary for the conduct of their
respective businesses, except where the failure to own or possess such
rights would not have a Material Adverse Effect, and has no reason to
believe that, to the best knowledge of the Company, the conduct of their
respective businesses will conflict in any material respect with, and the
Company and its subsidiaries have not received any notice of any claim of
conflict with, any such rights of others, except where such conflict would
not have a Material Adverse Effect.
(ee) The Company and each of its subsidiaries have good and
marketable title in fee simple to, or have valid rights to lease or
otherwise use, all items of real and personal property which are material
to the business of the Company and its subsidiaries, in each case free and
clear of all liens, encumbrances, claims and defects and imperfections of
title except such as (i) are contemplated by the Senior Credit Documents,
(ii) do not materially interfere with the use made and proposed to be made
of such property by the Company and its subsidiaries or (iii) could not
reasonably be expected to have a Material Adverse Effect.
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(ff) No material labor disturbance by or dispute with the employees
of the Company or any of its subsidiaries exists or, to the best knowledge
of the Company, is contemplated or threatened which would have a Material
Adverse Effect.
(gg) No "prohibited transaction" (as defined in Section 406 of the
U.S. Employee Retirement Income Security Act of 1974, as amended, including
the regulations and published interpretations thereunder ("ERISA"), or
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Section 4975 of the U.S. Internal Revenue Code of 1986, as amended from
time to time (the "Code")) or "accumulated funding deficiency" (as defined
----
in Section 302 of ERISA) or any of the events set forth in Section 4043(b)
of ERISA (other than events with respect to which the 30-day notice
requirement under Section 4043 of ERISA has been waived) has occurred with
respect to any employee benefit plan of the Company or any of its
subsidiaries which could reasonably be expected to have, singularly or in
the aggregate, a Material Adverse Effect; each such employee benefit plan
is in compliance in all material respects with applicable law, including
ERISA and the Code; the Company and each of its Material Subsidiaries have
not incurred and do not expect to incur liability under Title IV of ERISA
with respect to the termination of, or withdrawal from, any pension plan
for which the Company or any of its Material Subsidiaries would have any
liability; and each such pension plan that is intended to be qualified
under Section 401(a) of the Code is so qualified in all material respects
and nothing has occurred, whether by action or by failure to act, which
could reasonably be expected to cause the loss of such qualification.
(hh) Except as disclosed in the Offering Memorandum under "Business--
Environmental Matters", There has been no storage, generation,
transportation, handling, treatment, disposal, discharge, emission or other
release of any kind of toxic or other wastes or other hazardous substances
by, due to or caused by the Company or any of its subsidiaries (or, to the
best knowledge of the Company, any other entity (including any predecessor)
for whose acts or omissions the Company or any of its subsidiaries is or
would be liable) upon any of the property now or previously owned or leased
by the Company or any of its subsidiaries, or upon any other property, in
violation of any statute or any ordinance, rule, regulation, order,
judgment, decree or permit or which would, under
16
any statute or any ordinance, rule (including rule of common law),
regulation, order, judgment, decree or permit, give rise to any liability,
except for any violation or liability which could not reasonably be
expected to have, singularly or in the aggregate with all such violations
and liabilities, a Material Adverse Effect; and there has been no disposal,
discharge, emission or other release of any kind onto such property or into
the environment surrounding such property of any toxic or other wastes or
other hazardous substances with respect to which the Company has knowledge,
except for any such disposal, discharge, emission or other release of any
kind which could not reasonably be expected to have, singularly or in the
aggregate with all such discharges and other releases, a Material Adverse
Effect.
(ii) Neither the Company nor, to the best knowledge of the Company,
any director, officer, agent, employee or other person associated with or
acting on behalf of the Company has at any time within the last five years
(i) used any corporate funds for any unlawful contribution, gift,
entertainment or other unlawful expense relating to political activity;
(ii) made any direct or indirect unlawful payment to any foreign or
domestic government official or employee from corporate funds; (iii)
violated or is in violation of any provision of the Foreign Corrupt
Practices Act of 1977; or (iv) made any bribe, rebate, payoff, influence
payment, kickback or other unlawful payment.
(jj) On and immediately after the Closing Date, the Company (after
giving effect to the issuance of the Securities and to the other
transactions related thereto as described in the Offering Memorandum) will
be Solvent. As used in this paragraph, the term "Solvent" means, with
respect to a particular date, that on such date (i) no order has been made
and no resolution has been passed for the winding up of the Company or for
a provisional liquidator to be appointed in respect of the Company and no
meeting has been convened for the purpose of winding up the Company; (ii)
no administration order has been made in respect of the Company; (iii) no
receiver (which expression shall include an administrative receiver) has
been appointed in respect of the Company or all or any of its assets; (iv)
the company is not insolvent, or unable to pay its debts within the meaning
of section 123(1)(e) of the U.K. Insolvency Act 1986; and (v) no voluntary
arrangement has been proposed under section 1
17
of the U.K. Insolvency Act 1986 in respect of the Company.
(kk) Except as disclosed in the Offering Memorandum there are no
outstanding subscriptions, rights, warrants, calls or options to acquire,
or instruments convertible into or exchangeable for, or agreements or
understandings with respect to the sale or issuance of, any shares of
capital stock of or other equity or other ownership interest in the Company
or any of its Material Subsidiaries except as set forth in Section 1(e).
(ll) None of the proceeds of the sale of the Securities will be used,
directly or indirectly, for the purpose of purchasing or carrying any
"margin security" (as that term is defined in Regulations G and U of the
Board of Governors of the U.S. Federal Reserve System (the "Federal Reserve
---------------
Board")), for the purpose of reducing or retiring any indebtedness which
-----
was originally incurred to purchase or carry any margin security or for any
other purpose which might cause any of the Securities to be considered a
"purpose credit" within the meanings of Regulation G, T, U or X of the
Federal Reserve Board.
(mm) Neither the Company nor any of its subsidiaries is a party to
any contract, agreement or understanding with any person that would give
rise to a valid claim against the Company or the Initial Purchasers for a
brokerage commission, finder's fee or like payment in connection with the
offering and sale of the Securities.
(nn) The Securities satisfy the eligibility requirements of Rule
144A(d)(3).
(oo) None of the Company, any of its affiliates or any person acting
on its or their behalf has engaged or will engage in any directed selling
efforts (as such term is defined in Regulation S under the Securities Act
("Regulation S")) with respect to the Securities, and all such persons have
------------
complied and will comply with the offering restrictions requirements of
Regulation S to the extent applicable; provided, however, that the Company
-------- -------
makes no representations or warranties as to the activities of the Initial
Purchasers. The Company has not entered and will not enter into any
contractual arrangement with respect to the distribution of the Securities
except for this Agreement.
18
(pp) Neither the Company nor any of its affiliates has, directly or
through any agent, sold, offered for sale, solicited offers to buy or
otherwise negotiated in respect of, any security (as such term is defined
in the Securities Act), which is or will be integrated with the sale of the
Securities in a manner that would require registration of the Securities
under the Securities Act; provided, however, that the Company makes no
-------- -------
representations or warranties as to the activities of the Initial
Purchasers.
(qq) None of the Company, or any of its affiliates, or any person
acting on its or their behalf has engaged, in connection with the offering
of the Securities, in any form of general solicitation or general
advertising in the United States within the meaning of Rule 502(c) under
the Securities Act; provided, however, that the Company makes no
-------- -------
representations or warranties as to the activities of the Initial
Purchasers.
(rr) There are no securities of the Company registered under the U.S.
Securities Exchange Act of 1934, as amended (the "Exchange Act") or listed
on a national securities exchange or quoted in a U.S. automated inter-
dealer quotation system.
(ss) The Company has not taken and will not take, directly or
indirectly, any action prohibited by Regulation M under the Exchange Act in
connection with the offering of the Securities.
(tt) There is no "substantial U.S. market interest" as defined in
Rule 902(n) of Regulation S in the Company's debt securities.
(uu) Since the date as of which information is given in the Offering
Memorandum, except as otherwise stated therein, (i) there has been no
material adverse change or, to the best knowledge of the Company, any
development involving a prospective material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs,
management or business prospects of the Company and its subsidiaries taken
as a whole, whether or not arising in the ordinary course of business, (ii)
neither the Company nor any of its Material Subsidiaries has incurred any
material liability or obligation, direct or contingent, other than in the
ordinary course of business, (iii) neither the Company nor any of its
Material Subsidiaries has
19
entered into any material transaction other than in the ordinary course of
business and (iv) there has not been any change in the capital stock or
long-term debt of the Company or the long-term debt of any of its Material
Subsidiaries, or any dividend or distribution of any kind declared, paid or
made by the Company on any class of its capital stock.
(vv) Application has been made to list the Securities on the
Luxembourg Exchange and, in connection therewith, the Company has prepared
and submitted to the Luxembourg Exchange a listing application with respect
to the Securities (the "Listing Application"). The Listing Application (i)
-------------------
complies in all material respects with the requirements of the Luxembourg
Exchange and (ii) has been submitted to the Luxembourg Exchange. There is
no requirement to deliver the finalized Listing Application to prospective
purchasers or purchasers of Securities from the Initial Purchasers in
connection with the offer and sale by the Initial Purchasers of the
Securities.
(ww) No forward-looking statement (within the meaning of Section 27A
of the Securities Act or Section 21E of the Exchange Act) contained in the
Preliminary Offering Memorandum or the Offering Memorandum has been made or
reaffirmed without a reasonable basis and been disclosed other than in good
faith.
(xx) The Company has the power to submit, and pursuant to this
Agreement and the Indenture, has legally, validly, effectively and
irrevocably submitted to the jurisdiction of any U.S. Federal or state
court in the Borough of Manhattan in The City of New York, New York, and
has the power to designate, appoint and empower and, pursuant to this
Agreement and the Indenture has, or in the case of the Indenture will have,
legally, validly, effectively and irrevocably designated, appointed and
empowered, an agent for service of process in any suit or proceeding based
on or arising under this Agreement, the Indenture, the Registration Rights
Agreement and the Note Depositary Agreement in any U.S. Federal or state
court in the Borough of Manhattan in The City of New York, as provided in
Section 17 hereof, Section 10.10 of the Indenture, Section 10(h) of the
Registration Rights Agreement and Section 4.08 of the Note Depositary
Agreement.
20
(yy) The Company is not aware of any material liabilities of the
Machinery Business remaining with the Company following the Machinery
Disposal.
2. Purchase and Resale of the Securities. (a) On the basis of the
-------------------------------------
representations, warranties and agreements contained herein, and subject to the
terms and conditions set forth herein, the Company agrees to issue and sell to
the Initial Purchasers, severally and not jointly, and each of the Initial
Purchasers, severally and not jointly, agrees to purchase from the Company, the
principal amount of Securities set forth opposite the name of such Initial
Purchaser on Schedule II hereto at a purchase price equal to 97% of the
principal amount thereof. The Company shall not be obligated to deliver any of
the Securities except upon payment for all of the Securities to be purchased as
provided herein.
(b) The Initial Purchasers have advised the Company that they
propose to offer the Securities for resale upon the terms and subject to the
conditions set forth herein and in the Offering Memorandum. Each Initial
Purchaser, severally and not jointly, represents and warrants to, and agrees
with, the Company that (i) it is purchasing the Securities pursuant to a private
sale exempt from registration under the Securities Act and understands that the
Securities have not been registered under the Securities Act and may not be
offered or sold within the United States or to, or for the account or benefit
of, U.S. persons except pursuant to an exemption from, or in transactions not
subject to, the registration requirements of the Securities Act, (ii) it has not
solicited offers for, or offered or sold, and will not solicit offers for, or
offer or sell, the Securities by means of any form of general solicitation or
general advertising in the United States within the meaning of Rule 502(c) of
Regulation D under the Securities Act ("Regulation D") and (iii) it has
------------
solicited and will solicit offers for the Securities only from, and has offered
or sold and will offer, sell or deliver the Securities, as part of its initial
offering and otherwise until 40 days after the later of commencement of the
offering of the Securities and the Closing Date, only (A) to persons whom it
reasonably believes to be qualified institutional buyers ("Qualified
---------
Institutional Buyers") as defined in Rule 144A, or if any such person is buying
--------------------
for one or more institutional accounts for which such person is acting as
fiduciary or agent, only when such person has represented to it that each such
account is a Qualified Institutional Buyer to whom notice has been given that
such
21
sale or delivery is being made in reliance on Rule 144A or (B) in reliance on
Regulation S.
(c) In connection with the offer and sale of Securities in reliance
on Regulation S, each Initial Purchaser, severally and not jointly, represents,
warrants and agrees that:
(i) None of such Initial Purchaser or any of its affiliates or any
other person acting on its or their behalf has engaged or will engage in
any directed selling efforts with respect to the Securities, and all such
persons have complied and will comply with the offering restrictions
requirement of Regulation S.
(ii) At or prior to the confirmation of sale of any Securities sold in
reliance on Regulation S, it will have sent to each distributor, dealer or
other person receiving a selling concession, fee or other remuneration that
purchases Securities from it during the restricted period a confirmation or
notice to substantially the following effect:
"The Securities covered hereby have not been registered under the U.S.
Securities Act of 1933, as amended (the "Securities Act"), and may not
be offered or sold within the United States or to, or for the account
or benefit of, U.S. persons (i) as part of their distribution at any
time or (ii) otherwise until 40 days after the later of the
commencement of the offering of the Securities and the date of
original issuance of the Securities, except in accordance with
Regulation S or Rule 144A under the Securities Act. Terms used above
have the meanings given to them by Regulation S."
(iii) It has not and will not enter into any contractual arrangement
with any distributor with respect to the distribution of the Securities,
except with its affiliates or with the prior written consent of the
Company.
Terms used in this Section 2(c) have the meanings given to them by
Regulation S.
(d) Each Initial Purchaser represents and warrants that it is a
Qualified Institutional Buyer, with such knowledge and experience in financial
and business matters as is necessary to evaluate the merits and risks of
22
an investment in the Securities, and is acquiring the Securities not with a view
to the distribution or resale thereof, except distributions or resales in
compliance with the registration requirements or exemption provisions of the
Securities Act, including Rule 144A, and that neither it, nor anyone acting on
its behalf, will offer the Securities so as to bring the issuance and sale of
the Securities within the provisions of Section 5 of the Securities Act.
(e) Each Initial Purchaser, severally and not jointly, represents,
warrants and agrees that (i) it has not offered or sold and, prior to the date
six months after the date of issue 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 agent) for the purposes of their business or
otherwise in circumstances which have not resulted in 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, (ii) it has complied with and will comply
with all applicable provisions of the Financial Services Act 1986 of the United
Kingdom with respect to anything done by it in relation to the Securities in,
from or otherwise involving the United Kingdom and (iii) it has only issued or
passed on and will only issue or pass on in the United Kingdom any document
received by it in connection with the issue of the Securities to a person who is
of a kind described in Article 11(3) of the Financial Services Act 1986
(Investment Advertisements) (Exemptions) Order 1996 (as amended), or to a person
to whom such document may otherwise lawfully be issued or passed on.
(f) In addition to the foregoing, each Initial Purchaser acknowledges
and agrees that the Company and, for purposes of the opinions to be delivered to
the Initial Purchasers pursuant to Sections 5(d), (e) and (f) counsel for the
Company and the Initial Purchasers, respectively, may rely upon the accuracy of
the representations and warranties of the Initial Purchasers and their
compliance with their agreements contained in this Section 2, and each Initial
Purchaser hereby consents to such reliance.
(g) The Company acknowledges and agrees that the Initial Purchasers
may sell Securities to any affiliate of an Initial Purchaser and that any such
affiliate may sell Securities purchased by it to an Initial Purchaser; provided,
--------
in each case, that such sales are made in accordance with the provisions of this
Section 2.
23
3. Delivery of and Payment for the Securities. (a) Delivery of and
------------------------------------------
payment for the Securities shall be made at the offices of ▇▇▇▇▇▇▇ ▇▇▇▇▇ W.S.,
London, or at such other place as shall be agreed upon by the Initial Purchasers
and the Company, at 2.30 p.m. London time, on January 30, 1998, or at such other
time or date, not later than three full business days thereafter, as shall be
agreed upon by the Initial Purchasers and the Company (such date and time of
payment and delivery being referred to herein as the "Closing Date").
------------
(b) On the Closing Date, payment of the purchase price for the
Securities shall be made to the Company by wire or book-entry transfer of same-
day funds to such account or accounts as the Company shall specify prior to the
Closing Date or by such other means as the parties hereto shall agree prior to
the Closing Date against delivery to the Initial Purchasers of the Securities.
Time shall be of the essence, and delivery at the time and place specified
pursuant to this Agreement is a further condition of the obligations of the
Initial Purchasers hereunder. Upon delivery, the Securities shall be in the form
of one or more permanent global Securities in bearer form (the "Global
------
Securities") representing all the Securities and to be deposited with the Book-
----------
Entry Depositary pursuant to the Depositary Agreement. The Book-Entry
Depositary will issue two certificateless depositary interests to The Depository
Trust Company ("DTC"). Beneficial interests in the Offered Securities will be
shown on, and transfers thereof will be effected only through, records
maintained in book-entry form by DTC and its participants, including, as
applicable, ▇▇▇▇▇▇ Guaranty Trust Company of New York, Brussels Office, as
operator of the Euroclear System ("Euroclear") and Cedel Bank, societe anonyme
("Cedel"). The Company agrees to make the global certificates evidencing the
Securities available for inspection by CMIL on behalf of the Initial Purchasers
in London at least 24 hours prior to the Closing Date.
4. Further Agreements of the Company. The Company agrees with each
---------------------------------
of the Initial Purchasers:
(a) to advise the Initial Purchasers promptly and, if requested,
confirm such advice in writing, of the happening of any event which makes
any statement of a material fact made in the Offering Memorandum untrue or
which requires the making of any additions to or changes in the Offering
Memorandum (as amended or supplemented from time to time) in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading; to advise
24
the Initial Purchasers promptly of any order preventing or suspending the
use of the Preliminary Offering Memorandum or the Offering Memorandum, of
any suspension of the qualification of the Securities for offering or sale
in any jurisdiction and of the initiation or threatening of any proceeding
for any such purpose; and to use its reasonable best efforts to prevent the
issuance of any such order preventing or suspending the use of the
Preliminary Offering Memorandum or the Offering Memorandum or suspending
any such qualification and, if any such suspension is issued, to obtain the
lifting thereof at the earliest possible time;
(b) to furnish promptly to each of the Initial Purchasers and counsel
for the Initial Purchasers, without charge, as many copies of the
Preliminary Offering Memorandum and the Offering Memorandum (and any
amendments or supplements thereto) as may be reasonably requested;
(c) prior to making any amendment or supplement to the Offering
Memorandum, to furnish a copy thereof to each of the Initial Purchasers and
counsel for the Initial Purchasers and not to effect any such amendment or
supplement to which the Initial Purchasers shall reasonably object by
notice to the Company after a reasonable period to review, which shall not
in any case be longer than ten business days after receipt of such copy;
(d) if, at any time prior to completion of the resale of the
Securities by the Initial Purchasers, any event shall occur or condition
exist as a result of which it is necessary, in the opinion of counsel for
the Initial Purchasers or counsel for the Company, to amend or supplement
the Offering Memorandum in order that the 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 purchaser, not
misleading, or if it is necessary to amend or supplement the Offering
Memorandum to comply with applicable law, to promptly prepare such
amendment or supplement as may be necessary to correct such untrue
statement or omission or so that the Offering Memorandum, as so amended or
supplemented, will comply with applicable law;
25
(e) for so long as the Securities are outstanding and are "restricted
securities" within the meaning of Rule 144(a)(3) under the Securities Act,
to furnish to holders of the Securities and beneficial owners and
prospective purchasers of the Securities designated by such holders, upon
request of such holders or such beneficial owners or prospective
purchasers, the information required to be delivered pursuant to Rule
144A(d)(4), unless the Company is then subject to and in compliance with
Section 13 or 15(d) of the Exchange Act or exempt from reporting pursuant
to Rule 12g3-2(b) under the Exchange Act (the foregoing agreement being for
the benefit of the holders from time to time of the Securities and
beneficial owners and prospective purchasers of the Securities designated
by such holders);
(f) for a period of five years following the Closing Date, to furnish
to the Initial Purchasers copies of any reports filed by the Company with
the Commission on Forms 20-F, 10-K, 10-Q, 6-K and 8-K, or such other
similar forms as may be designated by the Commission (and any information
furnished to the Commission pursuant to Rule 12g3-2(b) under the Exchange
Act), and such other documents, reports and information as shall be
furnished by the Company to the Trustee or to the holders of the Securities
pursuant to the Indenture or the Exchange Act or any rule or regulation of
the Commission thereunder;
(g) to use its reasonable best efforts to qualify the Securities for
sale under the securities or Blue Sky laws of such jurisdictions as the
Initial Purchasers may reasonably designate and to continue such
qualifications in effect for so long as required for the resale of the
Securities; and to arrange for the determination of the eligibility for
investment of the Securities under the laws of such jurisdictions as the
Initial Purchasers may reasonably request; provided that the Company and
--------
its subsidiaries shall not be obligated to register or qualify as foreign
corporations or as securities dealers in any jurisdiction in which they are
not so registered or qualified or to file a general consent to service of
process in any jurisdiction or to subject themselves to taxation in any
jurisdiction if they are not otherwise so subject;
(h) to arrange, with the cooperation of the Initial Purchasers, for
the Securities to be (i)
26
designated Private Offerings, Resales and Trading through Automated
Linkages ("PORTAL") Market securities in accordance with the rules and
------
regulations adopted by the National Association of Securities Dealers, Inc.
("NASD") relating to trading in the PORTAL Market (ii) listed on the
----
Luxembourg Exchange and (iii) for the Securities to be eligible for
clearance and settlement through DTC and Euroclear and Cedel; and to
arrange for the Exchange Securities to be listed on the Luxembourg
Exchange;
(i) not to, and to cause its affiliates not to, sell, offer for sale
or solicit offers to buy or otherwise negotiate in respect of any security
(as such term is defined in the Securities Act) which could be integrated
with the sale of the Securities in a manner which would require
registration of the Securities under the Securities Act;
(j) except following the effectiveness of the Exchange Offer
Registration Statement or the Shelf Registration Statement, as the case may
be, not to, and to cause its affiliates not to, and not to authorize or
knowingly permit any person acting on their behalf to, (i) solicit any
offer to buy or offer to sell the Securities by means of any form of
general solicitation or general advertising in the United States within the
meaning of Regulation D or in any manner involving a public offering within
the meaning of Section 4(2) of the Securities Act or (ii) engage in any
"directed selling efforts" (as defined in Regulation S) with respect to the
Securities; and not to offer, sell, contract to sell or otherwise dispose
of, directly or indirectly, any securities under circumstances where such
offer, sale, contract or disposition would cause the exemptions afforded by
Section 4(2) of the Securities Act and Rule 144A or the safe harbor of
Regulation S under the Securities Act to cease to be applicable to the
offering and sale of the Securities as contemplated by this Agreement and
the Offering Memorandum;
(k) except as required by the Registration Rights Agreement, for a
period of 180 days from the date of the Offering Memorandum, not to, and to
cause its affiliates not to, offer for sale, sell, contract to sell or
otherwise dispose of, directly or indirectly, or file a registration
statement for, or announce any offer, sale, contract for sale of or other
disposition of any debt securities issued or guaranteed by the
27
Company or any of its subsidiaries (other than the Securities) without the
prior written consent of the Initial Purchasers;
(l) without the prior written consent of the Initial Purchasers, not
to, and not permit any of its affiliates (as defined in Rule 144 under the
Securities Act) to, resell any of the Securities that have been reacquired
by them, except for Securities purchased by the Company or any of its
affiliates and resold in a transaction registered under the Securities Act;
(m) not to, for a period of two years following the Closing Date, be
or become, or be or become owned by, an open-end investment company, unit
investment trust or face-amount certificate company that is or is required
to be registered under Section 8 of the Investment Company Act, and to not
be or become, or be or become owned by, a closed-end investment company
required to be registered, but not registered thereunder;
(n) in connection with the offering of the Securities, until CSI on
behalf of the Initial Purchasers shall have notified the Company of the
completion of the resale of the Securities, not to, and to cause its
affiliated purchasers (as defined in Regulation M under the Exchange Act)
not to, either alone or with one or more other person, bid for or purchase,
for any account in which it or any of its affiliated purchasers has a
beneficial interest, any Securities, or attempt to induce any person to
purchase any Securities, except as contemplated by the Exchange Offer; and
not to, and to cause its affiliated purchasers not to, make bids or
purchase for the purpose of creating actual, or apparent, active trading in
or of raising the price of the Securities;
(o) in connection with the offering of the Securities, to make its
officers, key employees, independent accountants and legal counsel
reasonably available upon request by the Initial Purchasers;
(p) to furnish to each of the Initial Purchasers on the date hereof a
copy of the independent accountants' reports included in the Offering
Memorandum signed by the accountants rendering such reports;
28
(q) to do and perform all things required to be done and performed by
it under this Agreement that are within its control prior to or after the
Closing Date, and to use its reasonable best efforts to satisfy all
conditions precedent on its part to the delivery of the Securities;
(r) not to take any action prior to the execution and delivery of the
Indenture which, if taken after such execution and delivery, would have
violated any of the covenants contained in the Indenture;
(s) not to take any action prior to the Closing Date which would
require the Offering Memorandum to be amended or supplemented pursuant to
Section 4(d);
(t) prior to the Closing Date, not to issue any press release or other
communication directly or indirectly or hold any press conference with
respect to the Company, its condition, financial or otherwise, or earnings,
business affairs or business prospects (except for routine oral marketing
communications in the ordinary course of business and consistent with the
past practices of the Company and of which the Initial Purchasers are
notified), without the prior written consent of the Initial Purchasers,
which consent shall not be unreasonably withheld, unless in the judgment of
the Company and its counsel, and after notification to the Initial
Purchasers, such press release or communication is required by law;
(u) to apply the net proceeds from the sale of the Securities as set
forth in the Offering Memorandum under the heading "Use of Proceeds"; and
(v) not to amend, supplement or waive any part of the Acquisition
Agreement, the Machinery Disposal Agreements or the Senior Finance
Documents without the prior consent in writing of the Initial Purchasers,
which consent shall not be unreasonably withheld.
5. Conditions of Initial Purchasers' Obligations. The respective
---------------------------------------------
obligations of the several Initial Purchasers hereunder are subject to the
accuracy, on and as of the date hereof and the Closing Date, of the
representations and warranties of the Company contained herein, to the accuracy
of the statements of the Company and its officers made in any certificates
delivered pursuant hereto, to the performance by the Company of its obligations
hereunder, and to each of the following additional terms and conditions:
29
(a) The Offering Memorandum (and any amendments or supplements
thereto) shall have been printed and copies distributed to the Initial
Purchasers as promptly as practicable on or following the date of this
Agreement or at such other date and time as to which the Initial Purchasers
may agree; and no stop order suspending the sale of the Securities in any
jurisdiction shall have been issued and no proceeding for that purpose
shall have been commenced or shall be pending or, to the best of the
Company's knowledge, threatened.
(b) None of the Initial Purchasers shall have discovered and
disclosed to the Company on or prior to the Closing Date that the Offering
Memorandum or any amendment or supplement thereto contains an untrue
statement of a fact which, in the reasonable opinion of counsel for the
Initial Purchasers, is material or omits to state any fact which, in the
opinion of such counsel, is material and is required to be stated therein
or is necessary to make the statements therein not misleading.
(c) All corporate proceedings and other legal matters incident to the
authorization, form and validity of each of the Transaction Documents and
the Offering Memorandum, and all other legal matters relating to the
Transaction Documents and the transactions contemplated thereby, shall be
reasonably satisfactory in all material respects to the Initial Purchasers,
and the Company shall have furnished to the Initial Purchasers all
documents and information that they or their counsel may reasonably request
to enable them to pass upon such matters.
(d) ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇ shall have furnished to the Initial
Purchasers their written opinion, as U.S. counsel to the Company, addressed
to the Initial Purchasers and dated the Closing Date, in form and
30
substance reasonably satisfactory to the Initial Purchasers, substantially
to the effect set forth in Annex B hereto, and the Company shall have
furnished to such counsel such documents and information as they reasonably
request for the purpose of enabling them to pass upon such matters.
(e) ▇▇▇▇▇▇▇ ▇▇▇▇▇ W.S. shall have furnished to the Initial Purchasers
their written opinion, as U.K. counsel to the Company, addressed to the
Initial Purchasers and dated the Closing Date, in form and substance
reasonably satisfactory to the Initial Purchasers, substantially to the
effect set forth in Annex C hereto, and the Company shall have furnished to
such counsel such documents and information as they reasonably request for
the purpose of enabling them to pass upon such matters.
(f) The Initial Purchasers shall have received from Cravath, Swaine &
▇▇▇▇▇, counsel for the Initial Purchasers, such opinion, dated the Closing
Date, with respect to such matters as the Initial Purchasers may reasonably
require, and the Company shall have furnished to such counsel such
documents and information as they reasonably request for the purpose of
enabling them to pass upon such matters.
(g) The Company shall have furnished to the Initial Purchasers a
letter (the "Initial Letter") of KPMG, addressed to the Initial Purchasers
--------------
and dated the date hereof, in form and substance satisfactory to the
Initial Purchasers, substantially to the effect set forth in Annex D
hereto.
(h) The Company shall have furnished to the Initial Purchasers a
letter (the "Bring-Down Letter") of KPMG, addressed to the Initial
-----------------
Purchasers and dated the Closing Date (i) confirming that they are
independent public accountants with respect to the Company and its
subsidiaries within the meaning of Rule 101 of the Code of Professional
Conduct of the AICPA and its interpretations and rulings thereunder, (ii)
stating, as of the date of the Bring-Down Letter (or, with respect to
matters involving changes or developments since the respective dates as of
which specified financial information is given in the Offering Memorandum,
as of a date not more than three business days prior to the date of the
Bring-Down Letter), that the conclusions and findings of such accountants
with respect to the financial information and other matters covered by its
Initial Letter are accurate and (iii) confirming in all material respects
the conclusions and findings set forth in its Initial Letter. In addition,
the Company shall have received a letter from KPMG consenting to the use,
in connection with the offering of the Securities, of the audited financial
statements of the Company prepared by such accountants and included in the
Offering Memorandum.
(i) The Company shall have furnished to the Initial Purchasers a
certificate, dated the Closing
31
Date, of its chief executive officer and its chief financial officer
stating that (A) such officers have carefully examined the Offering
Memorandum, (B) in their opinion, the Offering Memorandum, as of its date,
did not include any untrue statement of a material fact and did not omit to
state a material fact required to be stated therein or necessary in order
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, and since the date of the Offering
Memorandum, no event has occurred which should have been set forth in a
supplement or amendment to the Offering Memorandum so that the Offering
Memorandum (as so amended or supplemented) would not include any untrue
statement of a material fact and would not omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading and (C) to the best of their knowledge after reasonable
investigation, as of the Closing Date, the representations and warranties
of the Company in this Agreement are true and correct in all material
respects, the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied hereunder on or prior
to the Closing Date, and subsequent to the date of the most recent
financial statements contained in the Offering Memorandum, there has been
(i) no material adverse change in the financial position or results of
operation of the Company or any of its Material Subsidiaries, or (ii) any
change, or any development including a prospective change, in or affecting
the condition (financial or otherwise), results of operations, business or
prospects of the Company and its subsidiaries taken as a whole, except as
set forth in the Offering Memorandum.
(j) The Initial Purchasers shall have received a counterpart of the
Registration Rights Agreement which shall have been executed and delivered
by a duly authorized officer of the Company.
(k) The Indenture shall have been duly executed and delivered by the
Company and the Trustee; and the Securities shall have been duly executed
and delivered by the Company and duly authenticated by the Trustee.
(l) The Depositary Agreement shall have been duly executed and
delivered by the Company and the Book-Entry Depositary.
32
(m) The Securities shall have been approved by the NASD for trading
in the PORTAL Market.
(n) If any event shall have occurred that requires the Company under
Section 4(d) to prepare an amendment or supplement to the Offering
Memorandum, such amendment or supplement shall have been prepared, the
Initial Purchasers shall have been given a reasonable opportunity to
comment thereon, and copies thereof shall have been delivered to the
Initial Purchasers reasonably in advance of the Closing Date.
(o) There shall not have occurred any invalidation of Rule 144A or
Regulation S by any court or any withdrawal or proposed withdrawal of any
rule or regulation under the Securities Act or the Exchange Act by the
Commission or any amendment or proposed amendment thereof by the Commission
which in the judgment of the Initial Purchasers would materially impair the
ability of the Initial Purchasers to purchase, hold or effect resales of
the Securities as contemplated hereby.
(p) Subsequent to the execution and delivery of this Agreement or, if
earlier, the dates as of which information is given in the Offering
Memorandum (exclusive of any amendment or supplement thereto), there shall
not have been any change in the capital stock or long-term debt or any
change, or any development involving a prospective change, in or affecting
the condition (financial or otherwise), results of operations, business or
prospects of the Company and its subsidiaries taken as a whole, the effect
of which, in any such case described above, is, in the reasonable judgment
of the Initial Purchasers, so material and adverse as to make it
impracticable or inadvisable to proceed with the sale or delivery of the
Securities on the terms and in the manner contemplated by this Agreement
and the Offering Memorandum (exclusive of any amendment or supplement
thereto).
(q) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any
governmental agency or body which would, as of the Closing Date, prevent
the issuance or sale of the Securities; and no injunction, restraining
order or order of any other nature by any U.K. or any U.S. Federal or state
court of competent jurisdiction shall have been issued as of the Closing
33
Date which would prevent the issuance or sale of the Securities.
(r) Subsequent to the execution and delivery of this Agreement (i) no
downgrading shall have occurred in the rating accorded the Securities or
any of the Company's other debt securities or preferred stock by any
"nationally recognized statistical rating organization", as such term is
defined by the Commission for purposes of Rule 436(g)(2) of the rules and
regulations of the Commission under the Securities Act and (ii) no such
organization shall have publicly announced that it has under surveillance
or review (other than an announcement with positive implications of a
possible upgrading), its rating of the Securities or any of the Company's
other debt securities or preferred stock.
(s) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the Luxembourg Exchange, the New York Stock Exchange, the
American Stock Exchange or the over-the-counter market shall have been
suspended or limited, or minimum prices shall have been established on any
such exchange or market by the Commission, by any such exchange or by any
other regulatory body or governmental authority having jurisdiction, or
trading in any securities of the Company on any exchange or in the over-
the-counter market shall have been suspended or (ii) any general moratorium
on commercial banking activities shall have been declared by Luxembourg,
United Kingdom or U.S. Federal or New York state authorities or (iii) an
outbreak or escalation of hostilities or a declaration by the United States
or any member state of the European Union of a national emergency or war or
(iv) a material adverse change in general economic, political or financial
conditions (or the effect of international conditions on financial markets
shall be such) the effect of which, in the case of this clause (iv), is, in
the reasonable judgment of the Initial Purchasers, so material and adverse
as to make it impracticable or inadvisable to proceed with the sale or the
delivery of the Securities on the terms and in the manner contemplated by
this Agreement and in the Offering Memorandum (exclusive of any amendment
or supplement thereto).
(t) Concurrently with or prior to the issue and sale of the
Securities by the Company, the Acquisition
34
shall have been consummated on terms that conform in all material respects
to the description thereof in the Offering Memorandum and the Initial
Purchasers shall receive evidence reasonably satisfactory to them of the
consummation thereof. The Initial Purchasers shall receive true and correct
copies of the Acquisition Agreement (together with all exhibits and
schedules thereto), including all amendments or supplements thereto, and
all certificates or other closing documents delivered in connection with
the consummation of the Acquisition as soon as practicable after the
Closing Date. There shall have been no amendment, supplement or waiver of
any part of the Acquisition Agreement (including the exhibits and schedules
thereto) not disclosed in writing to the Initial Purchasers prior to the
date hereof, or any such amendment, supplement or waiver after the date
hereof not consented to in writing by the Initial Purchasers. All
conditions precedent to the Acquisition other than the payment of the
consideration contained in such Agreement shall have been satisfied or
waived, with the prior written consent of the Initial Purchasers,
concurrently or prior to the consummation of the Acquisition.
(u) The Initial Purchasers shall have received such further opinions,
certificates, letters and documents as the Initial Purchasers may
reasonably request.
The Company will furnish the Initial Purchasers with conformed copies
of such opinions, certificates, letters and documents mentioned above as the
Initial Purchasers reasonably request. The Initial Purchasers may in their sole
discretion waive compliance with any conditions to their obligations hereunder,
whether in respect of the Closing Date or otherwise.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Initial Purchasers.
6. Termination. The obligations of the Initial Purchasers hereunder
-----------
may be terminated by the Initial Purchasers, in their absolute discretion, by
notice given to and received by the Company prior to delivery of and payment for
the Securities if, prior to that time, any of the events
35
described in Section 5(o), (p), (q), (r) and (s) shall have occurred and be
continuing.
7. Reimbursement of Initial Purchasers' Expenses. If (a) this
---------------------------------------------
Agreement shall have been terminated pursuant to Section 6, (b) the Company
shall fail to tender the Securities for delivery to the Initial Purchasers for
any reason permitted under this Agreement or (c) the Initial Purchasers shall
decline to purchase the Securities for any reason permitted under this
Agreement, the Company shall reimburse the Initial Purchasers for such out-of-
pocket expenses (including reasonable fees and disbursements of counsel) as
shall have been reasonably incurred by the Initial Purchasers in connection with
this Agreement and the proposed purchase and resale of the Securities.
8. Indemnification. (a) The Company shall indemnify and hold
---------------
harmless each Initial Purchaser, its affiliates, their respective officers,
directors, employees, representatives and agents, and each person, if any, who
controls any Initial Purchaser within the meaning of the Securities Act or the
Exchange Act (collectively referred to for purposes of this Section 8(a),
Section 9 and Section 17(c) as an Initial Purchaser), from and against any and
all losses, claims, damages or liabilities and reasonable expenses, joint or
several, or any action in respect thereof (including, without limitation, any
loss, claim, damage, liability or action relating to purchases and sales of the
Securities), to which that Initial Purchaser may become subject, whether
commenced or threatened, under the Securities Act, the Exchange Act, any other
statutory law or regulation, at common law or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon, (i) any
untrue statement or alleged untrue statement of a material fact contained in the
Preliminary Offering Memorandum, the Offering Memorandum or in any amendment or
supplement thereto or in any information provided by the Company pursuant to
Section 4(e) or (ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and shall reimburse each Initial Purchaser promptly upon
demand for any legal or other expenses reasonably incurred by that Initial
Purchaser in connection with investigating or defending or preparing to defend
against or appearing as a third party witness in connection with any such loss,
claim, damage, liability or action as such expenses are incurred; provided,
--------
however, the Company shall not be liable in any such case to the extent that any
-------
such loss, claim,
36
damage, liability or action arises out of, or is based upon, an untrue statement
or alleged untrue statement in or omission or alleged omission from any of such
documents in reliance upon and in conformity with any Initial Purchasers'
Information; and provided, further, that with respect to any such untrue
-------- -------
statement in or omission from the Preliminary Offering Memorandum, the indemnity
agreement contained in this Section 8(a) shall not inure to the benefit of any
such Initial Purchaser to the extent that the sale to the person asserting any
such loss, claim, damage, liability or action was an initial resale by such
Initial Purchaser and any such loss, claim, damage, liability or action of or
with respect to such Initial Purchaser results from the fact that both (i) to
the extent required by applicable law, a copy of the Offering Memorandum was not
sent or given to such person at or prior to the written confirmation of the sale
of such Securities to such person and (ii) the untrue statement in or omission
from the Preliminary Offering Memorandum was corrected in the Offering
Memorandum unless, in either case, such failure to deliver the Offering
Memorandum was a result of non-compliance by the Company with Section 4(b).
(b) Each Initial Purchaser, severally and not jointly, shall
indemnify and hold harmless the Company, its affiliates, their respective
officers, directors, employees, representatives and agents, and each person, if
any, who controls the Company within the meaning of the Securities Act or the
Exchange Act (collectively referred to for purposes of this Section 8(b) and
Section 9 as the Company), from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which the
Company may become subject, whether commenced or threatened, under the
Securities Act, the Exchange Act, any other U.S. Federal or state statutory law
or regulation, at common law or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained in the Preliminary
Offering Memorandum or the Offering Memorandum or in any amendment or supplement
thereto or (ii) the omission or alleged omission to state therein a material
fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, but in each case only to the extent that the untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with the Initial Purchasers' Information, and shall
reimburse the Company for any legal or other expenses reasonably incurred by the
Company in connection with investigating or defending or preparing to defend
against or
37
appearing as a third party witness in connection with any such loss, claim,
damage, liability or action as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party pursuant to Section 8(a) or 8(b), notify the indemnifying
party in writing of the claim or the commencement of that action; provided,
--------
however, that the failure to notify the indemnifying party shall not relieve it
-------
from any liability which it may have under this Section 8 except to the extent
that it has been materially prejudiced (through the forfeiture of substantive
rights or defenses) by such failure; and, provided, further, that the failure to
-------- -------
notify the indemnifying party shall not relieve it from any liability which it
may have to an indemnified party otherwise than under this Section 8. If any
such claim or action shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party shall be entitled
to participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that an
-------- -------
indemnified party shall have the right to employ its own counsel in any such
action, but the fees, expenses and other charges of such counsel for the
indemnified party will be at the expense of such indemnified party unless (1)
the employment of counsel by the indemnified party has been authorized in
writing by the indemnifying party, (2) the indemnified party has reasonably
concluded (based upon advice of counsel to the indemnified party) that there may
be legal defenses available to it or other indemnified parties that are
different from or in addition to those available to the indemnifying party, (3)
a conflict or potential conflict exists (based upon advice of counsel to the
indemnified party) between the indemnified party and the indemnifying party (in
which case the indemnifying party will not have the right to direct the defense
of such action on behalf of the indemnified party) or (4) the indemnifying party
has not in fact employed counsel reasonably satisfactory to the
38
indemnified party to assume the defense of such action within a reasonable time
after receiving notice of the commencement of the action, in each of which cases
the reasonable fees, disbursements and other charges of counsel will be at the
expense of the indemnifying party or parties. It is understood that the
indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate firm of attorneys (in
addition to any local counsel) at any one time for all such indemnified party or
parties. Each indemnified party, as a condition of the indemnity agreements
contained in Sections 8(a) and 8(b), shall use all reasonable efforts to
cooperate with the indemnifying party in the defense of any such action or
claim. No indemnifying party shall be liable for any settlement of any such
action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with its written consent or if there be a
final judgment for the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment. No indemnifying
party shall, without the prior written consent of the indemnified party (which
consent shall not be unreasonably withheld), effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party unless such settlement (i) includes an unconditional release
of such indemnified party from all liability on claims that are the subject
matter of such proceeding and (ii) does not include a statement as to an
admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
The obligations of the Company and the Initial Purchasers in this
Section 8 and in Section 9 are in addition to any other liability that the
Company or the Initial Purchasers, as the case may be, may otherwise have,
including in respect of any breaches of representations, warranties and
agreements made herein by any such party.
9. Contribution. If the indemnification provided for in Section 8 is
------------
unavailable or insufficient to hold harmless an indemnified party under Section
8(a) or 8(b), then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or liability, or action in respect
thereof, (i) in such proportion as shall be appropriate to reflect
39
the relative benefits received by the Company on the one hand and the Initial
Purchasers on the other from the offering of the Securities or (ii) if the
allocation provided by clause (i) above 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 the Initial Purchasers on the other with respect to the
statements or omissions that resulted in such loss, claim, damage or liability,
or action in respect thereof, 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 with respect to such offering shall be
deemed to be in the same proportion as the total net proceeds from the offering
of the Securities purchased under this Agreement (before deducting expenses)
received by or on behalf of the Company, on the one hand, and the total
discounts and commissions received by the Initial Purchasers with respect to the
Securities purchased under this Agreement, on the other, bear to the total gross
proceeds from the sale of the Securities under this Agreement, in each case as
set forth in the table on the cover page of the Offering Memorandum. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to the Company or information
supplied by the Company on the one hand or to any Initial Purchasers'
Information 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 contributions pursuant to this Section 9
were to be determined by pro rata allocation (even if the Initial Purchasers
were treated as one entity for such purposes) or by any other method of
allocation that does not take into account the equitable considerations referred
to herein. The amount paid or payable by an indemnified party as a result of the
loss, claim, damage or liability, or action in respect thereof, referred to
above in this Section 9 shall be deemed to include, for purposes of this Section
9, any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending or preparing to defend any such
action or claim. Notwithstanding the provisions of this Section 9, no Initial
Purchaser shall not be required to contribute any amount in excess of the amount
by which the total discounts and commissions received by such Initial Purchaser
with respect to the Securities purchased by it under this Agreement exceeds the
amount of
40
any damages which such Initial Purchaser has otherwise paid or become liable to
pay by reason of any 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 Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The Initial
Purchasers' obligations to contribute as provided in this Section 9 are several
in proportion to their respective purchase obligations and not joint.
10. Persons Entitled to Benefit of Agreement. This Agreement shall
----------------------------------------
inure to the benefit of and be binding upon the Initial Purchasers, the Company
and their respective successors. This Agreement and the terms and provisions
hereof are for the sole benefit of only those persons, except as provided in
Sections 8 and 9 with respect to affiliates, officers, directors, employees,
representatives, agents and controlling persons of the Company and the Initial
Purchasers and in Section 4(e) with respect to holders and beneficial owners and
prospective purchasers of the Securities. Nothing in this Agreement is intended
or shall be construed to give any person, other than the persons referred to in
this Section 10, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein.
11. Expenses. (a) The Company agrees with the Initial Purchasers to
--------
pay (together with VAT where applicable) (i) the costs incident to the
authorization, issuance, sale, preparation and delivery of the Securities and
any taxes payable in that connection; (ii) the costs incident to the
preparation, printing and distribution of the Preliminary Offering Memorandum,
the Offering Memorandum, the Listing Application and any amendments or
supplements thereto; (iii) the costs of reproducing and distributing each of the
Transaction Documents; (iv) the costs incident to the preparation, printing and
delivery of the certificates evidencing the Securities, including stamp duties
and transfer taxes, if any, payable upon issuance of the Securities; (v) the
fees and expenses of the Company's counsel and independent accountants; (vi) the
fees and expenses of qualifying the Securities under the securities laws of the
several jurisdictions as provided in Section 4(g) and of preparing, printing and
distributing Blue Sky Memoranda (including related reasonable fees and expenses
of counsel for the Initial Purchasers); (vii) any fees charged by rating
agencies for rating the Securities; (viii) the fees and expenses of the Trustee,
the Book-Entry Depositary, any paying agent and any listing agent
41
(including any affiliate of any Initial Purchaser acting in such capacity) in
respect of listing the Securities on the Luxembourg Exchange or any other
securities exchange (including related fees and expenses of any counsel to such
parties); (ix) all expenses and application fees incurred in connection with (A)
the listing and qualifying of the Securities on the PORTAL Market and on the
Luxembourg Exchange or any other securities exchange and (B) the approval of the
Securities for book-entry transfer by DTC; (x) the expenses incurred by the
Company and the Initial Purchasers in connection with attending or hosting "road
show" meetings with prospective purchasers of the Securities from the Initial
Purchasers; and (xi) all other costs and expenses incident to the performance of
the obligations of the Company under the Transaction Documents which are not
otherwise specifically provided for in this Section 11; provided, however, that
-------- -------
except as provided in this Section 11 and Section 7, the Initial Purchasers
shall pay their own costs and expenses, including the costs and expenses of
their counsel.
(b) In addition, the Company agrees that it will indemnify and hold
harmless the Initial Purchasers against any documentary, stamp or similar
issuance tax, including any interest and penalties, on the creation, issuance
and sale of the Securities and on the execution and delivery of this Agreement.
(c) All amounts payable by the Company hereunder shall be exclusive
of Value Added Tax or any similar taxes ("V.A.T"). All amounts charged by the
-----
Initial Purchasers or for which the Initial Purchasers are to be reimbursed will
be invoiced together with V.A.T, where appropriate (and the Initial Purchasers
shall remit to the Company such V.A.T chargeable to the Initial Purchasers and
reimbursed by the Company which is recovered by the Initial Purchasers from
Customs and Excise). In addition, all such amounts shall be paid free and clear
of, and without any deduction or withholding for or on account of, any current
or future taxes, levies, imports, duties, charges or other deductions or
withholdings levied in any jurisdiction from or through which payment is made or
where the payor is located unless such deduction or withholding is required by
applicable law, in which event the Company shall pay additional amounts so that
the persons entitled to such payments receive the amount that such persons would
otherwise have received but for such deduction or withholding.
42
12. Survival. The respective indemnities, rights of contribution,
--------
representations, warranties and agreements of the Company and the Initial
Purchasers contained in this Agreement or made by or on behalf of the Company or
the Initial Purchasers pursuant to this Agreement or any certificate delivered
pursuant hereto shall survive the delivery of and payment for the Securities and
shall remain in full force and effect, regardless of any termination or
cancellation of this Agreement or any investigation made by or on behalf of any
of them or any of their respective affiliates, officers, directors, employees,
representatives, agents or controlling persons. Specifically, the
representations contained in Sections 1 and 2 and the agreements contained in
Sections 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17 and 19 shall survive the
termination of this Agreement.
13. Notices, etc.. All statements, requests, notices and agreements
-------------
hereunder shall be in writing, and:
(a) if to the Initial Purchasers, shall be delivered or sent by mail
or telecopy transmission to (i) Chase Manhattan International Limited, ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇; Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
(telecopier no: (▇▇) ▇▇▇-▇▇▇-▇▇▇▇), (ii) Chase Manhattan Bank AG,
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇; Attention: ▇▇▇▇▇▇▇▇
▇▇▇▇▇ (telecopier no.: (▇▇) ▇▇-▇▇▇▇-▇▇▇▇) and (iii) Chase Securities Inc.,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇. Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
(telecopier no.: (▇▇▇) ▇▇▇-▇▇▇▇); or
(b) if to the Company, shall be delivered or sent by mail or telecopy
transmission to the address of the Company set forth in the Offering
Memorandum, Attention: Finance Director (telecopier no.: (44) 116 261
0423);
provided that any notice to the Initial Purchasers pursuant to Section 8(c)
--------
shall also be delivered or sent by mail to the Initial Purchasers at the address
set forth on the signature page hereof. Any such statements, requests, notices
or agreements shall take effect at the time of receipt thereof.
The Company shall be entitled to act and rely upon any request,
consent, notice or agreement given or made on behalf of the Initial Purchasers
by CSI.
43
14. Definition of Terms. For purposes of this Agreement, (a) the
-------------------
term "business day" means a day other than a Saturday, Sunday or other day on
------------
which banking institutions in Luxembourg, the State of New York, Frankfurt or
London are authorized or required by law to close, (b) the term "subsidiary" has
----------
the meaning set forth in Rule 405 under the Securities Act and (c) except where
otherwise expressly provided, the term "affiliate" has the meaning set forth in
---------
Rule 405 under the Securities Act.
15. Initial Purchasers' Information. The parties hereto acknowledge
-------------------------------
and agree that the Initial Purchasers' Information consists solely of the
following information in the Preliminary Offering Memorandum and the Offering
Memorandum: (a) the last paragraph on the front cover page concerning the terms
of the offering by the Initial Purchasers; (b) the legend on the inside front
cover page concerning over-allotment and trading activities by the Initial
Purchasers; and (c) the statements concerning the Initial Purchasers contained
in (i) the first two sentences of the third paragraph, (ii) the second and third
sentences of the tenth paragraph, (iii) the thirteenth paragraph and (iv) the
fourteenth paragraph under the heading "Plan of Distribution".
16. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
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IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS TO THE EXTENT THAT THE APPLICATION OF THE LAW OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
17. Consent to Jurisdiction; Appointment of Agent for Service of
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Process; Judgement Currency. (a) The Company agrees that any suit, action or
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proceeding against the Company arising out of or relating to this Agreement may
be instituted in any state or U.S. Federal court in the Borough of Manhattan,
The City of New York, New York, and any appellate court from any thereof, and it
irrevocably submits to the non-exclusive jurisdiction of such courts in any
suit, action or proceeding. The Company irrevocably waives, to the fullest
extent permitted by law, any objection to any suit, action, or proceeding that
may be brought in connection with this Agreement, including such actions, suits
or proceedings relating to securities laws of the United States of America or
any state thereof, in such courts whether on the grounds of venue, residence or
domicile or on the ground that any such suit, action or proceeding has been
brought in an inconvenient forum. The Company agrees that final judgment in any
such suit, action or proceeding brought in such court shall be conclusive and
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binding upon the Company and may be enforced in any court to the jurisdiction of
which the Company is subject by a suit upon such judgment; provided that service
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of process is effected upon the Company in the manner provided by this Section
17.
(b) The Company irrevocably appoints CT Corporation System, with
offices on the date hereof at ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, as its
authorized agent (the "Authorized Agent"), upon whom process may be served in
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any suit, action or proceeding arising out of or relating to this Agreement or
the transactions contemplated herein which may be instituted in any state or
U.S. Federal court in the Borough of Manhattan, The City of New York, New York,
and expressly accepts the non-exclusive jurisdiction of any such court in
respect of any such suit, action or proceeding. The Company hereby represents
and warrants that the Authorized Agent has accepted such appointment and has
agreed to act as said agent for service of process, and the Company agrees to
take any and all action, including the filing of any and all documents that may
be necessary to continue such respective appointment in full force and effect
for a period of ten years from the date of this Agreement. Service of process
upon the Authorized Agent shall be deemed, in every respect, effective service
of process upon the Company. Notwithstanding the foregoing, any action
involving the Company arising out of or relating to this Agreement may be
instituted in any court of competent jurisdiction in any other jurisdiction.
(c) Any action, suit or proceeding brought by the Company against any
Initial Purchaser entitled to indemnification or contribution under Section 8 or
9, arising out of or based upon this Agreement and the transactions contemplated
herein shall be brought solely in a U.S. Federal or state court in the Borough
of Manhattan, The City of New York, New York, and the Company shall not initiate
nor seek to initiate, in the United Kingdom or in any other jurisdiction other
than in such New York courts, any action, suit or proceeding against any Initial
Purchaser entitled to indemnification or contribution under Section 8 or 9,
arising out of or based upon this Agreement and the transactions contemplated
hereby. The foregoing shall apply, without limitation, to any action seeking to
obtain any injunction or declaratory judgment against the enforcement of, or a
declaratory judgment concerning, any claim by any Initial Purchaser in respect
of this Agreement and any transaction contemplated hereby, and any action
challenging the enforceability of or seeking to invalidate in any respect the
submission by the Company hereunder to
45
the jurisdiction of such New York courts or the designation, pursuant to this
Section 17, of the laws of the State of New York as the law applicable to this
Agreement.
(d) If for the purposes of obtaining judgment in any court it is
necessary to convert a sum due hereunder into any currency other than United
States dollars (or Deutsche Marks in the case of payments pursuant to Section
3), the parties hereto agree, to the fullest extent that they may effectively do
so, that the rate of exchange used shall be the rate at which in accordance with
normal banking procedures the Initial Purchasers could purchase United States
dollars (or Deutsche Marks in the case of payments pursuant to Section 3) with
the other currency in New York City on the business day preceding that on which
final judgment is given. The obligation of the Company in respect of any sum
due to an Initial Purchaser shall, notwithstanding any judgment in a currency
other than United States dollars (or Deutsche Marks in the case of payments
pursuant to Section 3), not be discharged until the first business day,
following receipt by such Initial Purchaser of any sum adjudged to be so due in
such other currency, on which (and only to the extent that) such Initial
Purchaser may in accordance with normal banking procedures purchase United
States dollars (or Deutsche Marks in the case of payments pursuant to Section 3)
with such other currency; if the United States dollars (or German Deutsche Marks
in the case of payments pursuant to Section 3) so purchased are less than the
sum originally due to an Initial Purchaser hereunder, the Company agrees, as a
separate obligation and notwithstanding any such judgment, to indemnify such
Initial Purchaser against such loss. If the United States dollars (or Deutsche
Marks in the case of payments pursuant to Section 3) so purchased are greater
than the sum originally due to an Initial Purchaser hereunder, such Initial
Purchaser agrees to pay to the Company an amount equal to the excess of the
dollars (or Deutsche Marks in the case of payments pursuant to Section 3) so
purchased over the sum originally due to such Initial Purchaser hereunder.
(e) The provisions of this Section 17 shall survive any termination
or cancellation of this Agreement.
18. Counterparts. This Agreement may be executed in one or more
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counterparts (which may include counterparts delivered by telecopier) and, if
executed in more than one counterpart, the executed counterparts shall each be
deemed to be an original, but all such counterparts shall together constitute
one and the same instrument.
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19. Amendments. No amendment or waiver of any provision of this
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Agreement, nor any consent or approval to any departure therefrom, shall in any
event be effective unless the same shall be in writing and signed by the parties
hereto.
20. Headings. The headings herein are inserted for convenience of
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reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
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If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us a counterpart hereof, whereupon this
instrument will become a binding agreement the Company and the Initial
Purchasers in accordance with its terms.
Very truly yours,
TEXON INTERNATIONAL PLC
By
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Name:
Title:
Accepted:
On behalf of Chase Manhattan Bank AG,
Chase Securities Inc. and
Chase Manhattan International Limited
CHASE MANHATTAN INTERNATIONAL LIMITED
By ____________________
Authorized Signatory
Address for notices pursuant to Section 8(c):
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Legal Department