Execution Copy
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ALLIANT ENERGY RESOURCES, INC.
(a Wisconsin corporation)
5,166,052 PHONES
EXCHANGEABLE SENIOR NOTES DUE 2030
UNCONDITIONALLY GUARANTEED AS TO PAYMENT
OF PRINCIPAL, PREMIUM, IF ANY, AND INTEREST BY
ALLIANT ENERGY CORPORATION
(A Wisconsin Corporation)
PURCHASE AGREEMENT
Dated: January 26, 2000
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Table of Contents
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SECTION 1. Representations and Warranties by the Company and the Parent.......3
(a) Representations and Warranties.................................3
(i) Offering Memorandum.......................................3
(ii) Incorporated Documents...................................3
(iii) Independent Accountants.................................4
(iv) Financial Statements.....................................4
(v) No Material Adverse Change in Business....................4
(vi) Good Standing of the Company and the Parent...............5
(vii) Good Standing of Designated Subsidiaries................5
(viii) Capitalization.........................................6
(ix) Authorization of Agreement...............................6
(x) Authorization of the Indenture............................6
(xi) Authorization of the Supplemental Indenture..............6
(xii) Authorization of the Registration Rights Agreement.......7
(xiii) Authorization of the Securities........................7
(xiv) Description of the Securities and the Indenture.........7
(xv) Absence of Defaults and Conflicts........................8
(xvi) Absence of Labor Dispute................................9
(xvii) Absence of Proceedings.................................9
(xviii) Absence of Further Requirements.......................9
(xix) Possession of Licenses and Permits......................9
(xx) Title to Property.......................................10
(xxi) Environmental Laws.....................................10
(xxii) Investment Company Act................................11
(xxiii) Similar Offerings....................................11
(xxiv) Rule 144A Eligibility.................................11
(xxv) No General Solicitation................................12
(xxvi) No Registration Required..............................12
(xxvii) Reporting Company....................................12
(b) Officer's Certificates........................................12
SECTION 2. Sale and Delivery to Initial Purchaser; Closing...................12
(a) Initial Securities...........................................12
(b) Option Securities............................................12
(c) Payment......................................................13
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(c) Denominations; Registration..................................13
SECTION 3. Covenants of the Company and the Parent...........................13
(a) Offering Memorandum..........................................13
(b) Notice and Effect of Material Events.........................13
(c) Amendment to Offering Memorandum and Supplements.............14
(d) Qualification of Securities for Offer and Sale...............14
(e) Rating of Securities.........................................14
(f) DTC..........................................................15
(g) Use of Proceeds..............................................15
(h) Restriction on Sale of Securities............................15
(i) Filing of Registration Statement.............................15
SECTION 4. Payment of Expenses...............................................16
(a) Expenses.....................................................16
(b) Termination of Agreement.....................................17
SECTION 5. Conditions of Initial Purchaser's Obligations.....................17
(a) Opinion of Counsel for Company and the Parent................17
(b) Opinion of Counsel for Initial Purchaser.....................17
(c) Officers'Certificate.........................................18
(d) Accountants'Comfort Letter...................................18
(e) Bring-down Comfort Letter....................................18
(f) Maintenance of Rating........................................19
(g) Conditions to Purchase of Option Securities..................19
(i) Officers'Certificate....................................19
(ii) Opinion of Counsel for the Company and the Parent......19
(iii) Opinion of Counsel for Initial Purchaser..............19
(iv) Bring-down Comfort Letter..............................20
(v) Maintenance of Rating...................................20
(g) Additional Documents.........................................20
(h) Termination of Agreement.....................................20
SECTION 6. Subsequent Offers and Resales of the Securities...................20
(a) Offer and Sale Procedures....................................20
(i) Offers and Sales only to Qualified Institutional Buyers or
Institutional Accredited Investors....................20
(ii) No General Solicitation.................................21
(iii) Purchases by Non-Bank Fiduciaries......................21
(iv) Subsequent Purchaser Notification.......................21
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(v) Minimum Purchase Amount..................................21
(vi) Restrictions on Transfer................................21
(vii) Delivery of Offering Memorandum........................21
(b) Covenants of the Company and the Parent......................22
(i) Integration..............................................22
(ii) Rule 144A Information...................................22
(iii) Restriction on Repurchases.............................22
(c) Qualified Institutional Buyer................................22
SECTION 7. Indemnification...................................................22
(a) Indemnification of Initial Purchaser.........................22
(b) Indemnification of Company and Parent........................23
(c) Actions against Parties; Notification........................24
(d) Settlement without Consent if Failure to Reimburse...........25
SECTION 8. Contribution......................................................25
SECTION 9. Representations, Warranties and Agreements to Survive Delivery....26
SECTION 10. Termination of Agreement..........................................26
(a) Termination; General.........................................26
(b) Liabilities..................................................27
SECTION 11. Default by the Initial Purchaser..................................27
SECTION 12. Notices...........................................................27
SECTION 13. Parties...........................................................28
SECTION 14. Governing Law And Time............................................28
SECTION 15. Effect of Headings................................................28
SECTION 16. Counterparts......................................................28
SCHEDULES
Schedule A - Pricing Information.....................................Sch A-1
Schedule B - List of Subsidiaries....................................Sch B-1
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EXHIBITS
Exhibit A - Form of Opinion of Company's Counsel.........................A-1
Exhibit B - Form of Opinion of Parent's Counsel..........................B-1
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ALLIANT ENERGY RESOURCES, INC.
(a Wisconsin corporation)
5,166,052 PHONES
EXCHANGEABLE SENIOR NOTES DUE 2030
UNCONDITIONALLY GUARANTEED AS TO PAYMENT
OF PRINCIPAL, PREMIUM, IF ANY, AND INTEREST BY
ALLIANT ENERGY CORPORATION
(A WISCONSIN CORPORATION)
PURCHASE AGREEMENT
January 26, 2000
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Alliant Energy Resources, Inc., a Wisconsin corporation (the
"Company"), and Alliant Energy Corporation, a Wisconsin corporation (the
"Parent"), confirm their agreement with ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch,
Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇") (the "Initial Purchaser"),
with respect to the issue and sale by the Company and the purchase by the
Initial Purchaser of 5,166,052 Exchangeable Senior Notes due 2030 (the
"PHONES"). The aforesaid 5,166,052 PHONES (the "Initial Securities") to be
purchased by the Initial Purchaser and all or any part of the PHONES subject to
the option described in section 2(b) hereof (the "Option Securities") are
hereinafter called the "Securities." The Securities will be unconditionally
guaranteed as to payment of principal, premium, if any, and interest by the
Parent and will be issued pursuant to an indenture dated as of November 4, 1999
(the "Indenture") between the Company, the Parent and Firstar Bank, N.A., as
trustee (the "Trustee"). The term "Indenture," as used herein, includes the
Second Supplemental Indenture to be executed in connection with the offering of
the PHONES (the "Supplemental Indenture") establishing the form and terms of the
Securities pursuant to Section 2.02 of the Indenture. Securities issued in
book-entry form will be issued to Cede & Co. as nominee of The Depository
Trust Company ("DTC") pursuant to a letter agreement, to be dated as of the
Closing Time (as defined in Section 2(b)) (the "DTC Agreement"), among the
Company, the Trustee and DTC.
The Company understands that the Initial Purchaser proposes to make an
offering of the Securities on the terms and in the manner set forth herein and
agrees that the Initial Purchaser may resell, subject to the conditions set
forth herein, all or a portion of the Securities to purchasers ("Subsequent
Purchasers") at any time after this Agreement has been executed and delivered.
The Securities are to be offered and sold through the Initial Purchaser without
being registered under the Securities Act of 1933, as amended (the "1933 Act"),
in reliance upon exemptions therefrom. Pursuant to the terms of the Securities
and the Indenture, investors that acquire Securities may only resell or
otherwise transfer such Securities if such Securities are hereafter registered
under the 1933 Act or if an exemption from the registration requirements of the
1933 Act is available (including the exemption afforded by Rule 144A ("Rule
144A") of the rules and regulations promulgated under the 1933 Act by the
Securities and Exchange Commission (the "Commission") and the exemption under
Regulation D ("Regulation D") for sales to a limited number of institutional
"accredited investors" as that term is defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act (each, an "Institutional Accredited Investor")).
Holders (including subsequent transferees) of the Securities will have
the registration rights set forth in the Registration Rights Agreement (the
"Registration Rights Agreement"), to be entered at the Closing Time, among the
Company, the Parent and the Initial Purchaser, for so long as such Securities
constitute "Registrable Securities" (as defined in the Registration Rights
Agreement). Pursuant to the Registration Rights Agreement, the Company and the
Parent will use their reasonable best efforts to file with the Commission under
the circumstances set forth therein, (i) a registration statement under the 1933
Act (the "Exchange Offer Registration Statement") registering an issue of the
Company's PHONES identical in all material respects to the Securities (the
"Exchange Securities") to be offered in exchange for the Securities (the
"Exchange Offer") and (ii), under certain circumstances, a registration
statement pursuant to Rule 415 under the 1933 Act (the "Shelf Registration
Statement") to register the Securities.
The Company has prepared and delivered to the Initial Purchaser copies
of a preliminary offering memorandum dated January 26, 2000 (the "Preliminary
Offering Memorandum") and has prepared and will deliver to the Initial
Purchaser, on the date hereof or the next succeeding day, copies of a final
offering memorandum dated January 26, 2000 (the "Final Offering Memorandum"),
each for use by the Initial Purchaser in connection with its solicitation of
purchases of, or offering of, the Securities. "Offering Memorandum" means, with
respect to any date or time referred to in this Agreement, the most recent
offering memorandum (whether the Preliminary Offering Memorandum or the Final
Offering Memorandum, or any amendment or supplement to either such document),
including exhibits thereto and any documents incorporated
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therein by reference, which has been prepared and delivered by the Company to
the Initial Purchaser in connection with its solicitation of purchases of, or
offering of, the Securities.
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Offering Memorandum (or other references of like import) shall be deemed to mean
and include all such financial statements and schedules and other information
which are incorporated by reference in the Offering Memorandum; and all
references in this Agreement to amendments or supplements to the Offering
Memorandum shall be deemed to mean and include the filing of any document under
the Securities Exchange Act of 1934 (the "1934 Act") which is incorporated by
reference in the Offering Memorandum.
SECTION 1.Representations and Warranties by the Company and the Parent.
(a) Representations and Warranties. Except as otherwise noted herein,
the Company and the Parent severally and jointly represent and warrant to the
Initial Purchaser as of the date hereof and as of the Closing Time referred to
in Section 2(b) hereof, and severally and jointly agree with the Initial
Purchaser, as follows:
(i) Offering Memorandum. The Offering Memorandum does not, and
at the Closing Time will not, include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; provided that this representation, warranty
and agreement shall not apply to statements in or omissions from the
Offering Memorandum made in reliance upon and in conformity with
information furnished to the Company in writing by the Initial
Purchaser expressly for use in the Offering Memorandum.
(ii) Incorporated Documents. (A) The Offering Memorandum as
delivered from time to time shall incorporate by reference the most
recent annual report of the Parent on Form 10-K for the year ended
December 31, 1998, as amended by Form 10-K/A filed with the Commission
on November 1, 1999, the quarterly reports of the Parent on Form 10-Q
for the quarters ended March 31, 1999 and June 30, 1999, each as
amended by Form 10-Q/As filed with the Commission on November 1, 1999,
and for the quarter ended September 30, 1999 and the current reports of
the Parent on Form 8-K, two filed with the Commission on January 20,
1999, one filed on January 25, 2000 as amended by the current report on
Form 8-K/A filed on January 25, 2000, and one filed on January 26,
2000, and any such reports filed with the Commission after the date of
the Offering Memorandum and before the end of the offering of the
Securities. (B) With respect to this subsection clause (B) of this
clause (ii) only, the Parent represents and
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warrants that the documents incorporated or deemed to be incorporated
by reference in the Offering Memorandum at the time they were or
hereafter are filed with the Commission complied or will comply, as the
case may be, in all material respects with the requirements of the 1934
Act and the rules and regulations of the Commission thereunder, and,
when read together with the other information in the Offering
Memorandum, at the time the Offering Memorandum was issued and at the
Closing Time, did not and will not include an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
(iii) Independent Accountants. The accountants who certified the
financial statements and supporting schedules included in the Offering
Memorandum are independent public accountants with respect to the
Company, the Parent and their respective subsidiaries within the
meaning of Regulation S-X under the 1933 Act.
(iv) Financial Statements. The financial statements, together
with the related schedules and notes, included in the Offering
Memorandum present fairly in all materials respects the financial
position of the Company and its consolidated subsidiaries and the
Parent and its consolidated subsidiaries at the dates indicated and the
statement of operations, shareowners' equity and cash flows of the
Company and its consolidated subsidiaries and the Parent and its
consolidated subsidiaries for the periods specified; said financial
statements have been prepared in conformity with generally accepted
accounting principles ("GAAP") applied on a consistent basis throughout
the periods involved. The supporting schedules, if any, included in the
Offering Memorandum present fairly in all materials respects in
accordance with GAAP the information required to be stated therein. The
selected financial data and the summary financial information included
in the Offering Memorandum present fairly in all materials respects the
information shown therein and have been compiled on a basis consistent
with that of the audited financial statements included in the Offering
Memorandum.
(v) No Material Adverse Change in Business. Since the
respective dates as of which information is given in the Offering
Memorandum, except as otherwise stated therein, (A) there has been no
material adverse change in the condition, financial or otherwise, or in
the earnings or business affairs of the Company and the Parent and
their respective subsidiaries, in each case, considered as one
enterprise, whether or not arising in the ordinary course of business
nor has there been any developments involving a prospective material
adverse change of the Company and the Parent and their respective
subsidiaries, in each case, considered as one enterprise, whether or
not arising in the ordinary course of business (a "Material Adverse
Effect"), (B) there have been no transactions entered into by the
Company and the Parent or any of their respective
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subsidiaries, other than those in the ordinary course of business,
which are material with respect to the Company and the Parent and their
respective subsidiaries, and (C) except for regular dividends on the
common stock, par value $.01 per share, of the Parent (the "Common
Stock") in amounts per share that are consistent with past practice,
there has been no dividend or distribution of any kind declared, paid
or made by the Parent on any class of its capital stock.
(vi) Good Standing of the Company and the Parent. Each of the
Company and the Parent has been duly organized and is validly existing
as a corporation under the laws of the State of Wisconsin and has
corporate power and authority to own, lease and operate their
respective properties and to conduct their respective businesses as
described in the Offering Memorandum and to enter into and perform
their respective obligations under this Agreement; and each of the
Company and the Parent is duly qualified as a foreign corporation to
transact business and is in good standing in each other jurisdiction in
which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except
where the failure so to qualify or to be in good standing would not
result in a Material Adverse Effect.
(vii) Good Standing of Designated Subsidiaries. Each material
subsidiary of the Company is listed on Schedule B hereto (each
subsidiary on the list shall be referred to herein as a "Designated
Subsidiary" and, collectively, as the "Designated Subsidiaries"). Each
Designated Subsidiary has been duly organized and is validly existing
as a corporation under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Offering Memorandum and is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in which
such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure so to qualify or to be in good standing would not result in a
Material Adverse Effect; except as otherwise disclosed in the Offering
Memorandum, all of the issued and outstanding capital stock of each
Designated Subsidiary has been duly authorized and validly issued, is
fully paid and non-assessable (except, in the case of Designated
Subsidiaries that are Wisconsin corporations, for certain statutory
liabilities that may be imposed by Section 180.0622(b) of the Wisconsin
Business Corporation Law (the "WBCL") for unpaid employee wages) and is
owned by the Company, directly or through subsidiaries, free and clear
of any security interest, mortgage, pledge, lien, encumbrance, claim or
equity; and none of the outstanding shares of capital stock of the
Designated Subsidiaries was issued in violation of any preemptive or
similar rights of any securityholder of such Designated Subsidiary.
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(viii) Capitalization. The authorized, issued and outstanding
capital stock of the Parent is as set forth in the Offering Memorandum
in the columns entitled "Actual" under the caption "Capitalization"
(except for subsequent issuances, if any, pursuant to this Agreement,
pursuant to reservations, agreements, employee benefit plans referred
to in the Offering Memorandum or pursuant to the exercise of
convertible securities or options referred to in the Offering
Memorandum). All of the issued and outstanding shares of capital stock
of the Company have been duly authorized and validly issued and are
fully paid and non-assessable (except for certain statutory liabilities
that may be imposed by Section 180.0622(b) of the WBCL for unpaid
employee wages) and are owned by the Parent; and none of the
outstanding shares of capital stock of the Company was issued in
violation of the preemptive or other similar rights of any
securityholder of the Company. All of the issued and outstanding shares
if capital stock of the Parent have been duly authorized and validly
issued and are fully paid and non-assessable (except for certain
statutory liabilities that may be imposed by Section 180.0622(b) of the
WBCL for unpaid employee wages); and all of the issued and outstanding
capital stock of its significant subsidiaries (as such term is defined
in Rule 1-02 of Regulation S-X), including the Company, have been duly
authorized and validly issued and are fully paid and non-assessable
(except, in the case of such subsidiaries that are Wisconsin
corporations, for certain statutory liabilities that may be imposed by
Section 180.0622(b) of the WBCL for unpaid employee wages) and (except
for directors' qualifying shares and except as otherwise set forth in
the Offering Memorandum) are owned directly or indirectly by the
Parent, free and clear of all liens, encumbrances, equities or claims.
(ix) Authorization of Agreement. The Company and the Parent have
all requisite corporate power and authority to execute and deliver this
Agreement and to perform their obligations hereunder. This Agreement
has been duly authorized, executed and delivered by the Company and the
Parent.
(x) Authorization of the Indenture. The Indenture has been duly
authorized, executed and delivered by the Company, the Parent and the
Trustee and constitutes a valid and binding agreement of the Company
and the Parent, enforceable against the Company and the Parent in
accordance with its terms, except as (A) the enforcement thereof may be
limited by bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), reorganization, moratorium or
similar laws affecting enforcement of creditors' rights generally and
(B) as enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in
equity or at law).
(xi) Authorization of the Supplemental Indenture The
Supplemental Indenture has been duly authorized by the Company and the
Parent and, when executed and
6
delivered by the Company, the Parent and the Trustee, will constitute a
valid and binding agreement of the Company and the Parent, enforceable
against the Company and the Parent in accordance with its terms, except
(A) as the enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar laws affecting
enforcement of creditors' rights generally and (B) as enforcement
thereof is subject to general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at law).
(xii) Authorization of the Registration Rights Agreement. The
Company and the Parent have all requisite corporate power and authority
to execute and deliver the Registration Rights Agreement. The
Registration Rights Agreement has been duly authorized by the Company
and the Parent and, when executed and delivered by the Company, the
Parent and the Initial Purchaser, will constitute a valid and binding
agreement of the Company and the Parent, enforceable against the
Company and the Parent in accordance with its terms, except (A) as the
enforcement thereof may be limited by bankruptcy, insolvency,
(including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar laws affecting
enforcement of creditors' rights generally and (B) as enforcement
thereof is subject to general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at law).
(xiii) Authorization of the Securities. The Securities have been
duly authorized and the Guarantees have been duly authorized and, at
the Closing Time or the Date of Delivery (as defined herein), as the
case may be, will have been duly executed by the Company and the
Securities will have been guaranteed by the Parent and, when
authenticated, issued and delivered in the manner provided for in the
Indenture and delivered against payment of the purchase price therefor
as provided in this Agreement, will constitute valid and binding
obligations of the Company and the Parent, enforceable against the
Company and the Parent in accordance with their terms, except (A) as
the enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar laws affecting
enforcement of creditors' rights generally and (B) as enforcement
thereof is subject to general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at law),
and will be in the form contemplated by, and entitled to the benefits
of, the Indenture.
(xiv) Description of the Securities and the Indenture. The
Securities and the Indenture will conform in all material respects to
the respective statements relating thereto contained in the Offering
Memorandum and will be in substantially the respective forms last
delivered to the Initial Purchaser prior to the date of this Agreement.
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(xv) Absence of Defaults and Conflicts. None of the Company, the
Parent or any of their respective subsidiaries is in violation of their
respective charters or by-laws or in default in the performance or
observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, lease or other agreement or instrument to which
the Company, the Parent or any of their respective subsidiaries is a
party or by which any of them may be bound, or to which any of the
property or assets of the Company, the Parent or any of their
respective subsidiaries is subject (collectively, "Agreements and
Instruments") except for such defaults that would not result in a
Material Adverse Effect; and the execution, delivery and performance of
this Agreement, the Indenture, the Registration Rights Agreement, the
Securities and the Guarantees and any other agreement or instrument
entered into or issued or to be entered into or issued by the Company
and the Parent in connection with the transactions contemplated hereby
or thereby or in the Offering Memorandum and the consummation of the
transactions contemplated herein and in the Offering Memorandum
(including the issuance and sale of the Securities and the use of the
proceeds from the sale of the Securities as described in the Offering
Memorandum under the caption "Use of Proceeds") and compliance by the
Company and the Parent with their respective obligations hereunder have
been duly authorized by all necessary corporate action and do not and
will not, whether with or without the giving of notice or passage of
time or both, conflict with or constitute a breach of, or default or a
Repayment Event (as defined below) under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company, the Parent or any of their respective
subsidiaries pursuant to, the Agreements and Instruments except for
such conflicts, breaches or defaults or liens, charges or encumbrances
that, singly or in the aggregate, would not result in a Material
Adverse Effect, nor will such action result in any violation of the
provisions of (x) the charter or by-laws of the Company, the Parent or
any of their respective subsidiaries (except for such conflicts,
breaches, defaults, events or liens, charges or encumbrances that would
not result in a Material Adverse Effect) or (y) any applicable law,
statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Company, the Parent or any of their
respective subsidiaries or any of their assets, properties or
operations, except for any such violations with respect to this clause
(y) as would not, individually or in the aggregate, result in a
Material Adverse Effect. As used herein, a "Repayment Event" means any
event or condition which gives the holder of any note, debenture or
other evidence of indebtedness (or any person acting on such holder's
behalf) the right to require the repurchase, redemption or repayment of
all or a portion of such indebtedness by the Company, the Parent or any
of their respective subsidiaries.
8
(xvi) Absence of Labor Dispute. No labor dispute with the
employees of the Company or any of its subsidiaries exists or, to the
knowledge of the Company or the Parent, is imminent, and neither the
Company nor the Parent is aware of any existing or imminent labor
disturbance by the employees of the Company, its subsidiaries or their
respective principal suppliers, manufacturers, customers or
contractors, which, in either case, may reasonably be expected to
result in a Material Adverse Effect.
(xvii) Absence of Proceedings. Except as disclosed in the Offering
Memorandum, there is no action, suit, proceeding, inquiry or
investigation before or brought by any court or governmental agency or
body, domestic or foreign, now pending, or, to the knowledge of the
Company or the Parent, threatened, against or affecting the Company,
the Parent or any of their respective subsidiaries which might
reasonably be expected to result in a Material Adverse Effect, or which
might reasonably be expected to materially and adversely affect (A) the
properties or assets of the Company, the Parent or any of their
respective subsidiaries or (B) the consummation of the transactions
contemplated by this Agreement or the performance by the Company and
the Parent of their respective obligations hereunder. The aggregate of
all pending legal or governmental proceedings to which the Company, the
Parent or any of their respective subsidiaries is a party or of which
any of their respective property or assets is the subject which are not
described in the Offering Memorandum, including ordinary routine
litigation incidental to the business, could not reasonably be expected
to result in a Material Adverse Effect.
(xviii) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency is necessary or required for the performance by the Company and
the Parent of their respective obligations hereunder, in connection
with (A) the offering, issuance or sale of the Securities hereunder or
the consummation of the transactions contemplated by this Agreement or
(B) for the due execution, delivery or performance of the Indenture by
the Company and the Parent, except such as have been already obtained
and except such as may be required by the securities laws of the
various states in which the Securities will be offered or sold and the
Public Utility Holding Company Act of 1935, as amended (the "1935 Act")
(solely with respect to filings required to be made with the Commission
subsequent to the Closing Time), with the offer and sale of the
Securities or by the 1933 Act or the Trust Indenture Act of 1939, as
amended (the "1939 Act"), in connection with the exchange offer as
contemplated by the Registration Rights Agreement.
(xix) Possession of Licenses and Permits. The Company, the
Parent and their respective subsidiaries possess such permits,
licenses, approvals, consents and other
9
authorizations (collectively, "Governmental Licenses") issued by the
appropriate federal, state, local or foreign regulatory agencies or
bodies necessary to conduct the business now operated by them except
where the failure to possess any such Governmental Licenses would not
have a Material Adverse Effect; the Company, the Parent and their
respective subsidiaries are in compliance with the terms and conditions
of all such Governmental Licenses, except where the failure so to
comply would not, singly or in the aggregate, have a Material Adverse
Effect; all of the Governmental Licenses are valid and in full force
and effect, except where the invalidity of such Governmental Licenses
or the failure of such Governmental Licenses to be in full force and
effect would not have a Material Adverse Effect; and none of the
Company, the Parent nor any of their respective subsidiaries has
received any notice of proceedings relating to the revocation or
modification of any such Governmental Licenses which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a Material Adverse Effect.
(xx) Title to Property. The Company, the Parent and their
respective subsidiaries have good and marketable title to all real
property owned by the Company, the Parent and their respective
subsidiaries and good title to all other properties owned by them, in
each case, free and clear of all mortgages, pledges, liens, security
interests, claims, restrictions or encumbrances of any kind except such
as (A) are described in the Offering Memorandum or (B) do not, singly
or in the aggregate, materially affect the value of such property and
do not interfere with the use made and proposed to be made of such
property by the Company, the Parent or any of their respective
subsidiaries; and all of the leases and subleases material to the
business of the Company, the Parent and their respective subsidiaries,
considered as one enterprise, and under which the Company, the Parent
or any of their respective subsidiaries holds properties described in
the Offering Memorandum, are in full force and effect, and none of the
Company, the Parent nor any of their respective subsidiaries has any
notice of any material claim of any sort that has been asserted by
anyone adverse to the rights of the Company, the Parent or any of their
respective subsidiaries under any of the leases or subleases mentioned
above, or affecting or questioning the rights of such the Company, the
Parent or any subsidiary thereof to the continued possession of the
leased or subleased premises under any such lease or sublease, except
where such would not have a Material Adverse Effect.
(xxi) Environmental Laws. Except as described in the Offering
Memorandum and the documents incorporated by reference therein and
except such matters as would not, singly or in the aggregate, result in
a Material Adverse Effect, (A) none of the Company, the Parent or any
of their respective subsidiaries is in violation of any federal, state,
local or foreign statute, law, rule, regulation, ordinance, code,
policy or rule of common law or any judicial or administrative
interpretation thereof, including any
10
judicial or administrative order, consent, decree or judgment, relating
to pollution or protection of human health, the environment (including,
without limitation, ambient air, surface water, groundwater, land
surface or subsurface strata) including, without limitation, laws and
regulations relating to the release or threatened release of chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous
substances, petroleum or petroleum products (collectively, "Hazardous
Materials") or to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous
Materials (collectively, "Environmental Laws"), (B) the Company, the
Parent and their respective subsidiaries have all permits,
authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their requirements,
(C) there are no pending or, to the knowledge of the Company,
threatened administrative, regulatory or judicial actions, suits,
demands, demand letters, claims, liens, notices of noncompliance or
violation, investigation or proceedings relating to any Environmental
Law against the Company, the Parent or any of their respective
subsidiaries and (D) there are no events or circumstances that might
reasonably be expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against or affecting the Company, the
Parent or any of their respective subsidiaries relating to Hazardous
Materials or Environmental Laws.
(xxii) Investment Company Act. Neither the Company nor the Parent
is, and upon the issuance and sale of the Securities as herein
contemplated and the application of the net proceeds therefrom as
described in the Offering Memorandum will be, an "investment company"
or an entity "controlled" by an "investment company" as such terms are
defined in the Investment Company Act of 1940, as amended (the "1940
Act").
(xxiii) Similar Offerings. None of the Company, the Parent or any
of their respective affiliates, as such term is defined in Rule 501(b)
under the 1933 Act (each, an "Affiliate"), has, directly or indirectly,
solicited any offer to buy, sold or offered to sell or otherwise
negotiated in respect of, or will solicit any offer to buy, sell or
offer to sell or otherwise negotiate in respect of, in the United
States or to any United States citizen or resident, any security which
is or would be integrated with the sale of the Securities in a manner
that would require the Securities to be registered under the 1933 Act.
(xxiv) Rule 144A Eligibility. The Securities are eligible for
resale pursuant to Rule 144A and will not be, at the Closing Time, of
the same class as securities listed on a national securities exchange
registered under Section 6 of the 1934 Act, or quoted in a U.S.
automated interdealer quotation system.
11
(xxv) No General Solicitation. None of the Company, the Parent,
their Affiliates or any person acting on its or any of their behalf
(other than the Initial Purchaser, as to whom the Company and the
Parent make no representation) has engaged or will engage, in
connection with the offering of the Securities, in any form of general
solicitation or general advertising within the meaning of Rule 502(c)
under the 1933 Act.
(xxvi) No Registration Required. Subject to compliance by the
Initial Purchaser with the representations and warranties set forth in
Section 2 and the procedures set forth in Section 6 hereof, it is not
necessary in connection with the offer, sale and delivery of the
Securities to the Initial Purchaser and to each Subsequent Purchaser in
the manner contemplated by this Agreement and the Offering Memorandum
to register the Securities under the 1933 Act or to qualify the
Indenture under the 1939 Act.
(xxvii) Reporting Company. With respect to this clause (xxvii)
only, the Parent represents and warrants that it is subject to the
reporting requirements of Section 13 or Section 15(d) of the 1934 Act.
(b) Officer's Certificates. Any certificate signed by any officer of
the Company and of the Parent or any of their respective subsidiaries delivered
to the Initial Purchaser or to counsel for the Initial Purchaser shall be deemed
a representation and warranty by the Company and the Parent to the Initial
Purchaser as to the matters covered thereby.
SECTION 2. Sale and Delivery to Initial Purchaser; Closing.
(a) Initial Securities. On the basis of the representations, warranties
and agreements herein contained and subject to the terms and conditions herein
set forth, the Company agrees to sell to the Initial Purchaser and the Initial
Purchaser agrees to purchase from the Company 5,166,052 Initial Securities, at
the price per PHONES set forth in Schedule A.
(b) Option Securities. In addition, on the basis of the
representations, warranties and agreements herein contained and subject to the
terms and conditions herein set forth, the Company hereby grants an option to
the Initial Purchaser to purchase from it any or all of the Option Securities at
the same price as is to be paid by the Initial Purchaser for the Initial
Securities plus, in the case of the Option Securities, accrued interest, if any,
from the Closing Time to the Date of Delivery. The option hereby granted will
expire 30 days after the date hereof and may be exercised in whole or in part at
any one time only for the purpose of covering over-allotments which may be made
in connection with the offering and distribution of the Initial Securities upon
notice by the Initial Purchaser to the Company setting forth the number of
Option Securities as to which the Initial Purchaser is exercising the option and
the time and date of payment and delivery for such Option Securities. Such time
and date of delivery for the Option Securities (the "Date of Delivery") shall be
determined by the Initial Purchaser, but shall
12
not be later than seven full business days nor earlier than two full business
days after the exercise of said option, nor in any event prior to the Closing
Time, unless otherwise agreed upon by the Initial Purchaser and the Company. If
the option is exercised as to all or any portion of the Option Securities, the
Initial Purchaser will purchase the total number of Option Securities then being
purchased.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Securities shall be made at the offices of the Company at
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, or at such other place as
shall be agreed upon by the Initial Purchaser and the Company, at 10:00 A.M.
(Eastern time) on the third business day after the date hereof (unless postponed
in accordance with the provisions of Section 11), or such other time not later
than ten business days after such date as shall be agreed upon by the Initial
Purchaser and the Company (such time and date of payment and delivery being
herein called the "Closing Time").
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery to
the Initial Purchaser of certificates for the Securities to be purchased by
them.
(d) Denominations; Registration. Certificates for the Initial
Securities and the Option Securities shall be in such denominations and
registered in such names as the Initial Purchaser may request in writing at
least one full business day before the Closing Time or the Date of Delivery, as
the case may be. The Initial Securities and the Option Securities will be made
available for examination and packaging by the Initial Purchaser in Madison,
Wisconsin not later than 10:00 A.M. on the last business day prior to the
Closing Time or the Date of Delivery, as the case may be.
SECTION 3. Covenants of the Company and the Parent. The Company and the
Parent, jointly and severally, covenant with the Initial Purchaser as follows:
(a) Offering Memorandum. The Company and the Parent, as promptly as
possible, will furnish to the Initial Purchaser, without charge, such number of
copies of the Preliminary Offering Memorandum, the Final Offering Memorandum and
any amendments and supplements thereto and documents incorporated by reference
therein as the Initial Purchaser may reasonably request.
(b) Notice and Effect of Material Events. The Company and the Parent
will immediately notify the Initial Purchaser, and confirm such notice in
writing, of (x) any filing made by the Company or the Parent of information
relating to the offering of the Securities with any securities exchange or any
other regulatory body in the United States or any other jurisdiction, and (y)
prior to the completion of the placement of the Securities by the Initial
13
Purchaser as evidenced by a notice in writing from the Initial Purchaser to the
Company, any material changes in or affecting the condition, financial or
otherwise, or the earnings or business affairs of the Company and the Parent and
their respective subsidiaries, taken as a whole, nor has there been any
developments involving a prospective material adverse change of the Company and
the Parent and their respective subsidiaries, taken as a whole, which (i) make
any statement in the Offering Memorandum materially false or misleading or (ii)
are not disclosed in the Offering Memorandum. In such event or if during such
time any event shall occur as a result of which it is necessary, in the
reasonable opinion of any of the Company, the Parent, their counsel, the Initial
Purchaser or counsel for the Initial Purchaser, to amend or supplement the Final
Offering Memorandum in order that the Final Offering Memorandum not include any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein not misleading in the light of the
circumstances then existing, the Company will forthwith amend or supplement the
Final Offering Memorandum by preparing and furnishing to the Initial Purchaser
an amendment or amendments of, or a supplement or supplements to, the Final
Offering Memorandum (in form and substance satisfactory in the reasonable
opinion of counsel for the Initial Purchaser) so that, as so amended or
supplemented, the Final Offering Memorandum will not include an untrue statement
of a material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances existing at the time
it is delivered to a Subsequent Purchaser, not misleading.
(c) Amendment to Offering Memorandum and Supplements. The Company and
the Parent will advise the Initial Purchaser promptly of any proposal to amend
or supplement the Offering Memorandum and will not effect such amendment or
supplement without the consent of the Initial Purchaser, which consent shall not
be unreasonably withheld. Neither the consent of the Initial Purchaser, nor the
Initial Purchaser's delivery of any such amendment or supplement, shall
constitute a waiver of any of the conditions set forth in Section 5 hereof. The
Company will furnish to the Initial Purchaser, without charge, such number of
copies of such amendment or supplement as the Initial Purchaser may reasonably
request.
(d) Qualification of Securities for Offer and Sale. The Company will
use its best efforts, in cooperation with the Initial Purchaser, to qualify the
Securities for offering and sale under the applicable securities laws of such
states and other jurisdictions as the Initial Purchaser may designate and will
maintain such qualifications in effect as long as required for the sale of the
Securities; provided, however, that the Company shall not be obligated to file
any general consent to service of process or to qualify as a foreign corporation
or as a dealer in securities in any jurisdiction in which it is not so qualified
or to subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject.
(e) Rating of Securities. The Company shall take all reasonable action
necessary to enable Standard & Poor's Ratings Services, a division of McGraw
Hill, Inc. ("S&P"), and
14
▇▇▇▇▇'▇ Investors Service Inc. ("Moody's") to provide their respective credit
ratings of the Securities.
(f) DTC. The Company will cooperate with the Initial Purchaser and use
its best efforts to permit the Securities to be eligible for clearance and
settlement through the facilities of DTC.
(g) Use of Proceeds. The Company will use the net proceeds received by
it from the sale of the Securities in the manner specified in the Offering
Memorandum under "Use of Proceeds."
(h) Restriction on Sale of Securities. During a period of ninety (90)
days from the date of the Closing Time, none of the Company, the Parent or their
respective subsidiaries will, without the prior written consent of ▇▇▇▇▇▇▇
▇▇▇▇▇, directly or indirectly, issue, sell, offer or agree to sell, grant any
option for the sale of, or otherwise dispose of, any of the Securities, any
securities substantially similar to the Securities, any securities of the
Company or the Parent convertible into or exchangeable or exercisable for the
Securities, or any securities substantially similar to the Securities, except in
connection with a registered exchange offer for the Securities and except for
the offer or sale of up to an aggregate of 300,000 shares of McLeodUSA
Incorporated's Class A Common Stock, par value $0.01 per share (the "▇▇▇▇▇▇
Shares") pursuant to Section 3.1(b) of the Second Amended and Restated November
1998 Stockholders' Agreement dated as of December 17, 1999 by and among
McLeodUSA Incorporated ("▇▇▇▇▇▇"), the Parent, certain subsidiaries of the
Parent and certain stockholders of ▇▇▇▇▇▇ named therein; provided, however, that
the foregoing shall not prohibit the Company from taking any of the foregoing
actions in connection with any exchanges or redemptions of the Securities.
(i) Filing of Registration Statement. The Company and the Parent (A)
shall use their reasonable best efforts to file the Exchange Offer Registration
Statement on an appropriate form under the 1933 Act (assuming that the Exchange
Offer can be effectively registered thereunder) with the Commission within 135
days of the Closing Time, (B) shall use their reasonable best efforts to cause
the Exchange Offer Registration Statement to be declared effective under the
1933 Act within 180 days of the Closing Time, (C) shall use their reasonable
best efforts to keep the Exchange Offer Registration Statement effective until
the closing of the Exchange Offer and (D) shall use their reasonable best
efforts to cause the Exchange Offer to be consummated not later than 45 days
following the effective date of the Exchange Offer Registration Statement. In
the event that (a) the Company and the Parent are not permitted to effect the
Exchange Offer as contemplated because the law or applicable interpretations of
the law by the staff of the Commission, United States Treasury or the Internal
Revenue Service do not permit the Company and the Parent or make it
impracticable or inadvisable for the Company and the Parent to effect the
Exchange Offer as contemplated, (b) for any other reason, the Exchange Offer
Registration
15
Statement is not declared effective within 180 days following the Closing Time
or the Exchange Offer is not consummated within 45 days after the effectiveness
of the Exchange Offer Registration Statement, (c) upon the request of the
Initial Purchaser within 90 days following the consummation of the Exchange
Offer (d) if, as a result of any changes in law, Commission rules or regulations
or applicable interpretations thereof by the staff of the commission or
otherwise a holder of Securities (other than the Initial Purchaser holding
Securities acquired directly from the Company) is not permitted to participate
in the Exchange Offer or does not receive fully tradeable Exchange Securities
pursuant to the Exchange Offer or (e) if, unless the Company determines
otherwise, at the time of the issuance of the Exchange Securities or the Private
Exchange Securities (as defined herein), the interest rate of such securities
will be 300 basis points above the yield to maturity of a United States Treasury
obligation having a remaining term equal to the average life of such security,
the Company and the Parent shall thereafter use their reasonable best efforts to
cause to be declared effective as promptly as practicable but not later than 210
days after the issuance of the Securities a Shelf Registration Statement as
provided in the Registration Rights Agreement. For purposes of this Agreement,
"Private Exchange Securities" shall mean those securities issued by the Company
and the Parent upon the request of the Initial Purchaser for the Securities held
by the Initial Purchaser which were acquired from the Company and have the
status of an unsold allotment in the initial distribution. The Private Exchange
Securities shall be issued and delivered to the Initial Purchaser simultaneously
with the delivery of the Exchange Securities in the Exchange Offer.
SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay all expenses incident to the
performance of its obligations under this Agreement, including (i) the
preparation, printing, delivery to the Initial Purchaser and any filing of the
Offering Memorandum (including financial statements and any schedules or
exhibits and any document incorporated therein by reference) and of each
amendment or supplement thereto, (ii) the preparation, printing and delivery to
the Initial Purchaser of this Agreement, the Indenture and such other documents
as may be required in connection with the offering, purchase, sale, issuance or
delivery of the Securities, (iii) the preparation, issuance and delivery of the
Securities to the Initial Purchaser, including any transfer taxes, any stamp or
other duties payable upon the sale, issuance and delivery of the Securities to
the Initial Purchaser and any charges of DTC in connection therewith, (iv) the
fees and disbursements of the Company's counsel, accountants and other advisors,
(v) the qualification of the Securities under securities laws in accordance with
the provisions of Section 3(d) hereof, including filing fees and the reasonable
fees and disbursements of counsel for the Initial Purchaser in connection
therewith and in connection with the preparation of the Blue Sky Survey, any
supplement thereto; provided, that, counsel fees in connection therewith do not
exceed $5,000, (vi) the fees and expenses of the Trustee, including the fees and
disbursements of
16
counsel for the Trustee in connection with the Indenture and the Securities and
(vii) any fees payable in connection with the rating of the Securities
(b) Termination of Agreement. If this Agreement is terminated by the
Initial Purchaser in accordance with the provisions of Section 5 or Section
10(a)(i) hereof, the Company shall reimburse the Initial Purchaser for all of
their out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Initial Purchaser, provided, that, such fees and expenses do not
exceed $200,000.
SECTION 5. Conditions of Initial Purchaser's Obligations. The
obligations of the Initial Purchaser hereunder are subject to the accuracy in
all material respects of the representations and warranties of the Company and
the Parent contained in Section 1 hereof or in certificates of any officer of
the Company, the Parent or any of their respective subsidiaries delivered
pursuant to the provisions hereof, to the performance in all material respects
by the Company and the Parent of their respective covenants and other
obligations hereunder, and to the following further conditions:
(a) Opinions of Counsel for Company and the Parent. At the Closing
Time, the Initial Purchaser shall have received the favorable opinions, dated as
of the Closing Time, of ▇▇▇▇▇ & ▇▇▇▇ LLP (as to tax matters), ▇▇▇▇▇▇ ▇▇▇▇ &
Priest (as to 1935 Act matters) and ▇▇▇▇▇ & ▇▇▇▇▇▇▇ (as to all other matters),
in each case counsel for the Company, in form and substance satisfactory to
counsel for the Initial Purchaser to the effect set forth in Exhibit A hereto.
In addition, the Initial Purchaser shall have received the favorable opinions,
dated as of the Closing Time, of ▇▇▇▇▇ & Wood LLP (as to tax matters), ▇▇▇▇▇▇
▇▇▇▇ & Priest (as to 1935 Act matters) and ▇▇▇▇▇ & Lardner (as to all other
matters), in each case counsel for the Parent, in form and substance
satisfactory to counsel for the Initial Purchaser to effect set forth in Exhibit
B hereto. Such counsel may also state that they have relied on certificates of
public officials and, insofar as such opinions involve factual matters, they
have relied, to the extent they deem proper, upon certificates of officers of
the Company, the Parent and their respective subsidiaries.
(b) Opinion of Counsel for Initial Purchaser. At the Closing Time, the
Initial Purchaser shall have received the favorable opinion, dated as of the
Closing Time, of ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP, counsel for the Initial Purchaser, with
respect to certain matters. In giving such opinion such counsel may rely, as to
all matters governed by the laws of jurisdictions other than the law of the
State of New York, the federal law of the United States and the General
Corporation Law of the State of Delaware, upon the opinions of counsel
satisfactory to the Initial Purchaser. Such counsel may also state that, insofar
as such opinion involves factual matters, they have relied, to the extent they
deem proper, upon certificates of officers of the Company, the Parent and their
respective subsidiaries and certificates of public officials.
17
(c) Officers' Certificate. At the Closing Time, there shall not have
been, since the date hereof or since the respective dates as of which
information is given in the Offering Memorandum, any material adverse change in
the condition, financial or otherwise, or in the earnings or business affairs of
the Company and the Parent and their respective subsidiaries, in each case,
considered as one enterprise, whether or not arising in the ordinary course of
business, nor has there been any developments involving a prospective material
adverse change of the Company and the Parent and their respective subsidiaries,
in each case, considered as one enterprise, whether or not arising in the
ordinary course of business, and the Initial Purchaser shall have received a
certificate of the President, Chief Executive Officer or a Vice President of the
Company and of the chief financial or chief accounting officer of the Company,
dated as of the Closing Time, to the effect that (i) there has been no such
material adverse change, (ii) the representations and warranties in Section 1
hereof are true and correct in all materials respects with the same force and
effect as though expressly made at and as of the Closing Time and (iii) the
Company has complied in all material respects with all agreements and satisfied
all conditions on its part to be performed or satisfied at or prior to the
Closing Time. The Initial Purchaser shall also have received a certificate of
the President, Chief Executive Officer or Vice President of the Parent and of
the chief financial or chief accounting officer of the Parent, dated as of the
Closing Time, to the effect that (i) the representations and warranties in
Section 1 hereof are true and correct in all material respects with the same
force and effect as through made at and as of the Closing Time and (ii) the
Parent has complied in all material respects with all agreements and satisfied
all conditions on its part to be performed or satisfied at or prior to the
Closing Time.
(d) Accountants' Comfort Letter. At the time of the execution of this
Agreement, the Initial Purchaser shall have received from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP a
letter dated such date, in form and substance satisfactory to the Initial
Purchaser containing statements and information of the type ordinarily included
in accountants' "comfort letters" to initial purchasers with respect to the
financial statements and certain financial information contained in the Offering
Memorandum.
(e) Bring-down Comfort Letter. At the Closing Time, the Initial
Purchaser shall have received from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP a letter, dated as of the
Closing Time, (i) to the effect that they reaffirm the statements made in the
letter furnished pursuant to subsection (d) of this Section and (ii) responsive
to the additional statements and information requested by the Initial Purchaser,
of the type ordinarily included in accountants' "comfort letters" to initial
purchasers with respect to the financial statements and certain financial
information contained in the Offering Memorandum, in form and substance
satisfactory to the Initial Purchaser; except that the specified date referred
to shall be a date not more than three business days prior to the Closing Time.
18
(f) Maintenance of Rating. At the Closing Time and at the Date of
Delivery, the Securities shall be rated at least A3 by ▇▇▇▇▇'▇ and A by S&P, and
the Company shall have delivered to the Initial Purchaser a letter dated the
Closing Time, from each such rating agency, or other evidence satisfactory to
the Initial Purchaser, confirming that the Securities have such ratings; and
since the date of this Agreement, there shall not have occurred a downgrading in
the rating assigned to the Securities or any of the Company's other debt
securities by any "nationally recognized statistical rating agency," as that
term is defined by the Commission for purposes of Rule 436(g)(2) under the 1933
Act, and no such securities rating agency shall have publicly announced that it
has under surveillance or review, with possible negative implications, its
rating of the Securities or any of the Company's other debt securities .
(g) Conditions to Purchase of Option Securities. In the event that the
Initial Purchaser exercise its option provided in Section 2(b) hereof to
purchase all or any portion of the Option Securities, the representations and
warranties of the Company and the Parent contained herein and the statements in
any certificates furnished by the Company, the Parent or any of their respective
subsidiaries hereunder shall be true and correct as of the Date of Delivery and,
at the Date of Delivery, the Initial Purchaser shall have received:
(i) Officers' Certificate. A certificate, dated the Date of
Delivery, of the President, Chief Executive Officer or a Vice President
of the Company and of the chief financial or chief accounting officer
of the Company confirming that the certificate delivered at Closing
Time pursuant to Section 5(c) hereof remains true and correct as of the
Date of Delivery, and a certificate, dated the Date of Delivery, of the
President, Chief Executive Officer or a Vice President of the Parent
and of the chief financial or chief accounting officer of the Parent
confirming that the certificate delivered pursuant to Section 5(c)
hereof remains true and correct as of the Date of Delivery;
(ii) Opinions of Counsel for the Company and the Parent. The
favorable opinions of ▇▇▇▇▇ & ▇▇▇▇ LLP (as to tax matters), ▇▇▇▇▇▇ ▇▇▇▇
& Priest (as to 1935 Act matters) and ▇▇▇▇▇ & ▇▇▇▇▇▇▇ (as to all other
matters), in each case counsel for the Company and the Parent, in form
and substance satisfactory to counsel for the Initial Purchaser, dated
the Date of Delivery, relating to the Option Securities to be purchased
on the Date of Delivery and otherwise to the same effect as the opinion
required by Section 5(a) hereof;
(iii) Opinion of Counsel for Initial Purchaser. The favorable
opinion of ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP, counsel for the Initial Purchaser,
dated the Date of Delivery, relating to the Option Securities to be
purchased on the Date of Delivery and otherwise to the same effect as
the opinion required by Section 5(b) hereof;
19
(iv) Bring-down Comfort Letter. A letter from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
LLP, in form and substance satisfactory to the Initial Purchaser and
dated the Date of Delivery, substantially the same in form and
substance as the letters furnished to the Initial Purchaser pursuant to
Section 5(e) hereof, except that the "specified date" in the letter
furnished pursuant to this paragraph shall be a date not more than five
days prior to the Date of Delivery; and
(v) Maintenance of Rating. A letter from the rating agencies or
other evidence in form satisfactory to the Initial Purchaser dated the
Date of Delivery confirming that the Securities have the ratings as set
forth in Section 5(f) hereof and otherwise to the same effect as the
letter required by Section 5(f) hereof.
(h) Additional Documents. At the Closing Time and at the Date of
Delivery, counsel for the Initial Purchaser shall have been furnished with the
above-referenced opinions and such documents as they may require for the purpose
of enabling them to pass upon the issuance and sale of the Securities as herein
contemplated, or in order to evidence the accuracy of any of the representations
or warranties, or the fulfillment of any of the conditions, herein contained;
and all proceedings taken by the Company in connection with the issuance and
sale of the Securities as herein contemplated shall be reasonably satisfactory
in form and substance to the Initial Purchaser and counsel for the Initial
Purchaser.
(i) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled, this
Agreement (or, with respect to the Initial Purchaser's exercise of the
over-allotment option for the purchase of Option Securities on the Date of
Delivery after the Closing Time, the obligations of the Initial Purchaser to
purchase the Option Securities on the Date of Delivery) may be terminated by the
Initial Purchaser by notice to the Company at any time at or prior to the
Closing Time (or the Date of Delivery, as applicable), and such termination
shall be without liability of any party to any other party except as provided in
Section 4 and except that Sections 1, 7, 8 and 9 shall survive any such
termination and remain in full force and effect.
SECTION 6. Subsequent Offers and Resales of the Securities.
(a) Offer and Sale Procedures. The Initial Purchaser and the Company
hereby establish and agree to observe the following procedures in connection
with the offer and sale of the Securities:
(i) Offers and Sales only to Qualified Institutional Buyers or
Institutional Accredited Investors. Offers and sales of the Securities
shall only be made (A) to persons whom the offeror or seller reasonably
believes to be qualified institutional buyers, as defined in Rule 144A
under the 1933 Act ("Qualified Institutional Buyers") or (B) to a
20
limited number of persons who are other institutional accredited
investors, as such term is defined in Rule 501(a)(1), (2), (3) or (7)
under the 1933 Act that the offeror or seller reasonably believes to be
and, with respect to sales and deliveries, that are such institutional
accredited investors ("Institutional Accredited Investors").
(ii) No General Solicitation. No general solicitation or general
advertising (within the meaning of Rule 502(c) under the ▇▇▇▇ ▇▇▇) will
be used in the United States in connection with the offering or sale of
the Securities.
(iii) Purchases by Non-Bank Fiduciaries. In the case of a
non-bank Subsequent Purchaser of a Security acting as a fiduciary for
one or more third parties, each third party shall, in the judgment of
the Initial Purchaser, be an Institutional Accredited Investor or a
Qualified Institutional Buyer.
(iv) Subsequent Purchaser Notification. The Initial Purchaser
will take reasonable steps to inform, and cause each of its U.S.
Affiliates to take reasonable steps to inform, persons acquiring
Securities from the Initial Purchaser or affiliate, as the case may be,
in the United States that the Securities (A) have not been and will not
be registered under the 1933 Act, (B) are being sold to them without
registration under the 1933 Act in reliance on Rule 144A or in
accordance with another exemption from registration under the 1933 Act,
as the case may be, and (C) may not be offered, sold or otherwise
transferred except (1) to the Company or (2) inside the United States
in accordance with (x) Rule 144A to a person whom the seller reasonably
believes is a Qualified Institutional Buyer that is purchasing such
Securities for its own account or for the account of a Qualified
Institutional Buyer to whom notice is given that the offer, sale or
transfer is being made in reliance on Rule 144A or (y) pursuant to
another available exemption from registration under the 1933 Act.
(v) Minimum Purchase Amount. No sale of the Securities to any
one Subsequent Purchaser will be for less than an original principal
amount of $100,000. If the Subsequent Purchaser is a non-bank fiduciary
acting on behalf of others, each person for whom it is acting must
purchase at least an original principal amount of $100,000.
(vi) Restrictions on Transfer. The transfer restrictions and the
other provisions set forth in the Offering Memorandum under the heading
"Transfer Restrictions," including the legend required thereby, shall
apply to the Securities except as otherwise agreed by the Company and
the Initial Purchaser.
(vii) Delivery of Offering Memorandum. The Initial Purchaser will
deliver to each purchaser of the Securities from the Initial Purchaser,
in connection with its original
21
distribution of the Securities, a copy of the Offering Memorandum, as
amended and supplemented at the date of such delivery.
(b) Covenants of the Company and the Parent. The Company and the
Parent, jointly and severally, covenant with the Initial Purchaser as follows:
(i) Integration. The Company and the Parent agree that they
will not and will cause their respective Affiliates not to, directly or
indirectly, solicit any offer to buy, sell or make any offer or sale
of, or otherwise negotiate in respect of, securities of the Company of
any class if, as a result of the doctrine of "integration" referred to
in Rule 502 under the 1933 Act, such offer or sale would render invalid
(for the purpose of (i) the sale of the Securities by the Company to
the Initial Purchaser, (ii) the resale of the Securities by the Initial
Purchaser to Subsequent Purchasers or (iii) the resale of the
Securities by such Subsequent Purchasers to others) the exemption from
the registration requirements of the 1933 Act provided by Section 4(2)
thereof or by Rule 144A thereunder or otherwise.
(ii) Rule 144A Information. The Company and the Parent agree
that, in order to render the Securities eligible for resale pursuant to
Rule 144A under the 1933 Act, while any of the Securities remain
outstanding, they will make available, upon request, to any holder of
Securities or prospective purchasers of Securities the information
specified in Rule 144A(d)(4), unless such information is furnished to
the Commission pursuant to Section 13 or 15(d) of the 1934 Act.
(iii) Restriction on Repurchases. Until the expiration of two
years after the original issuance of the Securities, the Company and
the Parent will not, and will cause their respective Affiliates not to,
resell any Securities which are "restricted securities" (as such term
is defined under Rule 144(a)(3) under the 1933 Act), whether as
beneficial owner or otherwise (except as agent acting as a securities
broker on behalf of and for the account of customers in the ordinary
course of business in unsolicited broker's transactions).
(c) Qualified Institutional Buyer. The Initial Purchaser represents and
warrants to, and agrees with, the Company and the Parent that it is a Qualified
Institutional Buyer within the meaning of Rule 144A under the 1933 Act and an
"accredited investor" within the meaning of Rule 501(a) under the 1933 Act (an
"Accredited Investor").
SECTION 7. Indemnification.
(a) Indemnification of Initial Purchaser. The Company and the Parent,
jointly and severally, agree to indemnify and hold harmless the Initial
Purchaser and each person, if any,
22
who controls the Initial Purchaser within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in any
Preliminary Offering Memorandum or the Final Offering Memorandum (or
any amendment or supplement thereto), or the omission or alleged
omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided
that (subject to Section 7(d) below) any such settlement is effected
with the written consent of the Company and the Parent; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by ▇▇▇▇▇▇▇
▇▇▇▇▇), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company or the
Parent, as the case may be, by any Initial Purchaser expressly for use in the
Offering Memorandum (or any amendment thereto).
(b) Indemnification of Company and Parent. The Initial Purchaser agrees
to indemnify and hold harmless the Company and the Parent and each person, if
any, who controls the Company or the Parent within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection (a)
of this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Offering
Memorandum in reliance upon and in conformity with written information furnished
to the Company or the Parent, as the case may be, by the Initial Purchaser
expressly for use in the Offering Memorandum.
23
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 7(a) above,
counsel to the indemnified parties shall be selected by ▇▇▇▇▇▇▇ ▇▇▇▇▇, and, in
the case of parties indemnified pursuant to Section 7(b) above, counsel to the
indemnified parties shall be selected by the Parent. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. In addition, the indemnifying
party shall be entitled to, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense of any claim or
action brought against an indemnified party with counsel reasonably satisfactory
to the indemnified party. After notice from the indemnifying party to the
indemnified party of its election to assume the defense of such claim or action,
the indemnifying party shall not be liable to the indemnified party under this
Section 7 for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than reasonable
costs of investigation; provided, however, that the Initial Purchaser shall have
the right to employ one counsel to represent it and its officers, employees and
controlling persons who may be subject to liability arising out of any claim in
respect of which indemnity may be sought by the Initial Purchaser against the
Company and the Parent under this Section 7 if, in the reasonable judgment of
the Initial Purchaser, either (i) there is an actual or potential conflict
between the position of the Company and the Parent on the one hand and the
Initial Purchaser on the other hand or (ii) there may be defenses available to
it or them that are different from or additional to those available to the
Company and Parent (in any of which events the Company shall not have the right
to direct the defense of such action on behalf of the Initial Purchaser with
respect to such different defenses), in any of which events such reasonable fees
and expenses shall be borne by the Company and Parent. No indemnifying party
shall, without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section or Section 8
hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as
24
to or an admission of fault, culpability or a failure to act by or on behalf of
any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 7(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
SECTION 8. Contribution. If the indemnification provided for in Section
7 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Parent on the one hand and the Initial Purchaser on the other hand from the
offering of the Securities pursuant to this Agreement or (ii) if the allocation
provided by clause (i) is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company and the Parent on the one
hand and of the Initial Purchaser on the other hand in connection with the
statements or omissions which resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Parent on the one
hand and the Initial Purchaser on the other hand in connection with the offering
of the Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by
the Company and the total underwriting discount received by the Initial
Purchaser, bear to the aggregate initial offering price of the Securities.
The relative fault of the Company and the Parent on the one hand and
the Initial Purchaser on the other hand shall be determined by reference to,
among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company and the Parent or by the Initial
Purchaser and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
25
The Company, the Parent and the Initial Purchaser agree that it would
not be just and equitable if contribution pursuant to this Section were
determined by pro rata allocation (even if the Initial Purchaser were treated as
one entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section.
The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section, the Initial Purchaser
shall not be required to contribute any amount in excess of the amount by which
the total price at which the Securities purchased and sold by it hereunder
exceeds the amount of any damages which the Initial Purchaser has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section, each person, if any, who controls the
Initial Purchaser within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act shall have the same rights to contribution as the Initial
Purchaser, and each person, if any, who controls the Company or the Parent
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
shall have the same rights to contribution as the Company and the Parent.
SECTION 9. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company, the Parent or any of
their respective subsidiaries submitted pursuant hereto shall remain operative
and in full force and effect, regardless of any investigation made by or on
behalf of the Initial Purchaser or controlling person, or by or on behalf of the
Company or the Parent, and shall survive delivery of the Securities to the
Initial Purchaser.
SECTION 10. Termination of Agreement.
(a) Termination; General. The Initial Purchaser may terminate this
Agreement, by notice to the Company and the Parent, at any time at or prior to
the Closing Time (i) if there has been, since the time of execution of this
Agreement or since the respective dates as of which information is given in the
Offering Memorandum, any material adverse change in the condition, financial or
otherwise, or in the earnings or business affairs of the Company and the Parent
and
26
their respective subsidiaries, in each case, considered as one enterprise,
whether or not arising in the ordinary course of business, nor has there been
any developments involving a prospective material adverse change of the Company
and the Parent and their respective subsidiaries, in each case, considered as
one enterprise, whether or not arising in the ordinary course of business, (ii)
if there has occurred any material adverse change in the financial markets in
the United States or the international financial markets, any outbreak of
hostilities or escalation thereof or other calamity or crisis or any change or
development involving a prospective change in national or international
political, financial or economic conditions, in each case the effect of which is
such as to make it, in the reasonable judgment of the Initial Purchaser,
impracticable to market the Securities or to enforce contracts for the sale of
the Securities, (iii) if trading in any securities of the Company or the Parent,
or in ▇▇▇▇▇▇ Shares, has been suspended or materially limited by the Commission,
the New York Stock Exchange or The Nasdaq Stock Market, as the case may be, or
if trading generally on the American Stock Exchange or the New York Stock
Exchange or in the NASDAQ System has been suspended or materially limited, or
minimum or maximum prices for trading have been fixed, or maximum ranges for
prices have been required, by any of said exchanges or by such system or by
order of the Commission, the National Association of Securities Dealers, Inc. or
any other governmental authority or (iv) if a banking moratorium has been
declared by either Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 7, 8 and 9 shall survive such termination and remain in full force and
effect.
SECTION 11. Default by the Initial Purchaser. If the Initial Purchaser
shall fail at the Closing Time or the Date of Delivery, as the case may be, to
purchase the Securities which it is obligated to purchase under this Agreement
(the "Defaulted Securities"), this Agreement shall terminate.
The termination of this Agreement due to such default by the Initial
Purchaser shall not relieve the Initial Purchaser from liability in respect of
its default.
SECTION 12. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the Initial
Purchaser shall be directed to the Initial Purchaser at ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, attention of ▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
Managing Director, notices to the Company shall be directed to it ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attention of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and
notices to the Parent shall be directed to it at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attention of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇.
27
SECTION 13. Parties. This Agreement shall inure to the benefit of and
be binding upon the Initial Purchaser, the Company, the Parent and their
respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the Initial Purchaser, the Company, the Parent and their respective
successors and the controlling persons and officers and directors referred to in
Sections 7 and 8 and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. This Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the Initial
Purchaser, the Company, the Parent and their respective successors, and said
controlling persons and officers and directors and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation. No
purchaser of Securities from the Initial Purchaser shall be deemed to be a
successor by reason merely of such purchase.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EXCEPT AS
OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 15. Effect of Headings. The Article and Section headings herein
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
SECTION 16. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts hereof shall constitute a single instrument.
28
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company and the Parent a counterpart
hereof, whereupon this instrument, along with all counterparts, will become a
binding agreement between the Initial Purchaser, the Company and the Parent in
accordance with its terms.
Very truly yours,
ALLIANT ENERGY RESOURCES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President-Treasurer and
Corporate Secretary
ALLIANT ENERGY CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President-Treasurer and
Corporate Secretary
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
-----------------------------
Authorized Signatory
29
SCHEDULE A
ALLIANT ENERGY RESOURCES, INC.
5,166,052 PHONES
EXCHANGEABLE SENIOR NOTES DUE 2030
UNCONDITIONALLY GUARANTEED AS TO PAYMENT
OF PRINCIPAL, PREMIUM, IF ANY, AND INTEREST BY
ALLIANT ENERGY CORPORATION
1. The Price to Investors of the Securities shall be $67.75 per PHONES.
2. The Initial Purchaser's Discount for the Securities shall be $2.0325 per
PHONES.
3. The Securities shall be issued in an Original Principal Amount of $67.75
per PHONES.
4. The number of Reference Shares attributable to each PHONES shall be
0.8772 shares of McLeodUSA Incorporated Class A Common Stock, par value $0.01
per share, subject to dilution adjustments as described in the form of
Securities.
5. Quarterly interest shall be paid in the amount equal to the sum of
$1.2280 per PHONES, reflecting a basic interest rate of 7.25% per year on the
Original Principal Amount, through February 15, 2003, and thereafter in an
amount equal to $0.4234 per PHONES, reflecting a basic interest rate of 2.50%
per year on the Original Principal Amount, in each case plus an amount equal to
the amount of any regular cash dividends paid on the Reference Shares
attributable to each PHONES.
6. The Securities may be redeemed at any time, in whole but not in part, at
a redemption price equal to the sum of (a) the greater of (i) the Contingent
Principal Amount of the PHONES or (ii) the sum of the then Current Market Value
of the Reference Shares on the Redemption Date plus any deferred quarterly
payment of interest (including any Accrued Interest thereon), plus, in the case
of either (i) or (ii), the Final Period Distribution, and (b) a Redemption
Premium in an amount equal to $14.736 per PHONES if the Redemption Date is prior
to the Interest Payment Date on May 15, 2000, which Redemption Premium shall be
successively reduced by $1.2280 if the Securities are redeemed prior to each
following quarterly Interest Payment Date through the twelfth quarterly Interest
Payment Date on February 15, 2003, provided that no Redemption Premium shall be
payable in the event the Securities are redeemed between February 6 and February
15, 2003.
Sch A - 1
7. This offering of the Securities is subject to an over-allotment option
to the Initial Purchaser to purchase up to 774,908 additional PHONES at the
Price to Investors, less then Initial Purchaser's Discount, as described above.
8. Any capitalized terms above not specifically defined herein are as used
in the form of Securities attached to the Indenture.
Sch A - 2
SCHEDULE B
List of Subsidiaries
Alliant Energy Investments, Inc.
Alliant Energy International, Inc.
Alliant Energy Industrial Services, Inc.
▇▇▇▇▇▇▇ Petroleum Corporation
Sch B - 1