EXHIBIT 1.1
$ 200,000,000
SYSCO INTERNATIONAL, CO.
6.10% SENIOR NOTES DUE 2012
GUARANTEED BY
SYSCO CORPORATION
Purchase Agreement
May 20, 2002
J.P. Morgan Securities Inc.
As Representative of the
several Initial Purchasers listed
in Schedule 1 hereto
c/o J.P. Morgan Securities Inc.
270 Park Avenue
New York, New York 10017
Ladies and Gentlemen:
SYSCO International, Co., an unlimited liability company organized under
the laws of Nova Scotia, Canada (the "Company"), proposes to issue and sell to
the several Initial Purchasers listed in Schedule 1 hereto (the "Initial
Purchasers"), for whom you are acting as representative (the "Representative"),
$200,000,000 principal amount of its 6.10% Senior Notes due 2012 (the
"Securities"). The Securities will be issued pursuant to an Indenture to be
dated as of May 23, 2002 among the Company, SYSCO Corporation, a Delaware
corporation of which the Company is a wholly owned subsidiary (the "Guarantor"),
and Wachovia Bank, National Association, as trustee (the "Trustee"), and will be
guaranteed on a senior unsecured basis as to the payment of principal, premium,
if any, and interest by the Guarantor (the "Guarantees").
The Securities will be sold to the Initial Purchasers without being
registered under the Securities Act of 1933, as amended (the "Securities Act"),
in reliance upon an exemption therefrom. The Company and the Guarantor have
prepared a preliminary offering memorandum dated May 20, 2002 (the "Preliminary
Offering Memorandum") and will prepare an offering memorandum dated the date
hereof (the "Offering Memorandum") setting forth information concerning the
Company, the Guarantor and the Securities. Copies of the Preliminary Offering
Memorandum have been, and copies of the Offering Memorandum will be, delivered
by the Company and the Guarantor to the Initial Purchasers pursuant to the terms
of this Agreement. The Company and the Guarantor hereby confirm that they have
authorized the use of the Preliminary Offering Memorandum and the Offering
Memorandum in connection with the offering and resale of the Securities by the
Initial Purchasers in the manner contemplated by this Agreement. References
herein to the Preliminary Offering Memorandum and the Offering Memorandum shall
be deemed to refer to and include any document incorporated by reference
therein.
Holders of the Securities (including the Initial Purchasers and their
direct and indirect transferees) will be entitled to the benefits of a
Registration Rights Agreement, to be dated the Closing Date (as defined below)
and substantially in the form attached hereto as Exhibit A (the "Registration
Rights Agreement"), pursuant to which the Company and the Guarantor will agree
to file one or more registration statements with the Securities and Exchange
Commission (the "Commission") providing for the registration under the
Securities Act of the Securities or the Exchange Securities referred to (and as
defined) in the Registration Rights Agreement.
The Company and the Guarantor hereby confirm their agreement with the
several Initial Purchasers concerning the purchase and resale of the Securities,
as follows:
1. Purchase and Resale of the Securities. (a) The Company agrees to issue
and sell the Securities to the several Initial Purchasers (and the Guarantor
agrees to issue the Guarantees) as provided in this Agreement, and each Initial
Purchaser, on the basis of the representations, warranties and agreements set
forth herein and subject to the conditions set forth herein, agrees, severally
and not jointly, to purchase from the Company the principal amount of Securities
set forth opposite such Initial Purchaser's name in Schedule 1 hereto at a price
equal to 99.03% of the principal amount thereof plus accrued interest, if any,
from May 23, 2002 to the Closing Date. The Company will not be obligated to
deliver any of the Securities except upon payment for all the Securities to be
purchased as provided herein.
(b) The Company understands that the Initial Purchasers intend to offer the
Securities for resale on the terms set forth in the Offering Memorandum. Each
Initial Purchaser, severally and not jointly, represents, warrants and agrees
that:
(i) it is a qualified institutional buyer within the meaning of Rule
144A under the Securities Act (a "QIB") and an accredited investor within
the meaning of Rule 501(a) under the Securities Act;
(ii) it has not solicited offers for, or offered or sold, and will not
solicit offers for, or offer or sell, the Securities by means of any form
of general solicitation or general advertising within the meaning of Rule
502(c) of Regulation D under the Securities Act ("Regulation D") or in any
manner involving a public offering within the meaning of Section 4(2) of
the Securities Act; and
(iii) it has not solicited offers for, or offered or sold, and will
not solicit offers for, or offer or sell, the Securities as part of their
initial offering except:
2
(A) within the United States to persons whom it reasonably believes to
be QIBs in transactions pursuant to Rule 144A under the Securities Act
("Rule 144A") and in connection with each such sale, it has taken or will
take reasonable steps to ensure that the purchaser of the Securities is
aware that such sale is being made in reliance on Rule 144A; or
(B) in accordance with the restrictions set forth in Annex A hereto.
(c) Each Initial Purchaser acknowledges and agrees that the Company and the
Guarantor and, for purposes of the opinions to be delivered to the Initial
Purchasers pursuant to Sections 5(g), 5(h) and 5(i), counsel for the Company,
counsel for the Guarantor and counsel for the Initial Purchasers, respectively,
may rely upon the accuracy of the representations and warranties of the Initial
Purchasers, and compliance by the Initial Purchasers with their agreements,
contained in paragraph (b) above (including Annex A hereto), and each Initial
Purchaser hereby consents to such reliance.
(d) The Company acknowledges and agrees that the Initial Purchasers may
offer and sell Securities to or through any affiliate of an Initial Purchaser
and that any such affiliate may offer and sell Securities purchased by it to or
through any Initial Purchaser.
2. Payment and Delivery. (a) Payment for and delivery of the Securities
will be made in New York, New York at 10:00 A.M., New York City time, on May 23,
2002, or at such other time on the same or such other date, not later than the
fifth business day thereafter, as the Representative and the Company may agree
upon in writing. The time and date of such payment and delivery is referred to
herein as the "Closing Date".
(b) Payment for the Securities shall be made by wire transfer in
immediately available funds to the account(s) specified by the Company to the
Representative against delivery to the nominee of The Depository Trust Company,
for the account of the Initial Purchasers, of one or more global notes
representing the Securities (collectively, the "Global Note"), with any transfer
taxes payable in connection with the sale of the Securities duly paid by the
Company. The Global Note will be made available for inspection by the
Representative not later than 1:00 P.M., New York City time, on the business day
prior to the Closing Date.
3. Representations and Warranties of the Company and the Guarantor. The
Company and the Guarantor jointly and severally represent and warrant to each
Initial Purchaser that:
(a) Offering Memorandum. The Preliminary Offering Memorandum, as of its
date, did not, and the Offering Memorandum, in the form first used by the
Initial Purchasers to confirm sales of the Securities and on the Closing Date,
will not, contain any 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
3
the circumstances under which they were made, not misleading; provided that the
Company and the Guarantor make no representation or warranty with respect to any
statements or omissions made in reliance upon and in conformity with information
relating to any Initial Purchaser furnished to the Company and the Guarantor in
writing by such Initial Purchaser through the Representative expressly for use
in the Preliminary Offering Memorandum and the Offering Memorandum. No
forward-looking statement (within the meaning of Section 27A of the Securities
Act or Section 21E of the Securities and Exchange Act of 1934, as amended (the
"Exchange Act")) contained in the Preliminary Offering Memorandum and the
Offering Memorandum has been made or reaffirmed without a reasonable basis or
has been disclosed other than in good faith.
(b) Incorporated Documents. The documents incorporated by reference in the
Preliminary Offering Memorandum and the Offering Memorandum, when filed with the
Commission, conformed or will conform, as the case may be, in all material
respects to the applicable requirements of the Exchange Act and the rules and
regulations of the Commission thereunder, and did not and will not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(c) No Material Adverse Change. Except in each case as disclosed in the
Preliminary Offering Memorandum and the Offering Memorandum, since the date of
the most recent financial statements of the Guarantor included or incorporated
by reference in the Preliminary Offering Memorandum and the Offering Memorandum:
(i) there has not occurred any material adverse change, or any development
involving a prospective material adverse change, in the business, properties,
management, condition (financial or otherwise), results of operations or
business prospects of the Guarantor and its subsidiaries, taken as a whole, (ii)
neither the Guarantor nor any of its subsidiaries (including the Company) has
entered into any transaction or agreement that is material to the Guarantor and
its subsidiaries taken as a whole or incurred any liability or obligation,
direct or contingent, that is material to the Guarantor and its subsidiaries,
taken as a whole; and (iii) neither the Guarantor nor any of its subsidiaries
(including the Company) has sustained any material loss or interference with its
business from fire, explosion, flood or other calamity, whether or not covered
by insurance, or from any labor disturbance or dispute or any action, order or
decree of any court or arbitrator or governmental or regulatory authority.
(d) Organization and Good Standing. The Guarantor, the Company and each of
the Guarantor's other subsidiaries have been duly organized and are validly
existing and in good standing under the laws of their respective jurisdictions
of organization, are duly qualified to do business and are in good standing in
each jurisdiction in which their respective ownership or lease of property or
the conduct of their respective businesses requires such qualification, and have
all power and authority necessary to own or hold their respective properties and
to conduct the businesses in which they are engaged, except where the failure to
be so qualified or have such power or authority would not, individually or in
the aggregate, have a material adverse effect on the business, properties,
management, condition (financial or otherwise), results of operations or
4
business prospects of the Guarantor and its subsidiaries taken as a whole or on
the performance by the Company or the Guarantor of their respective obligations
under any of this Agreement, the Securities and the Guarantees (a "Material
Adverse Effect"). The Guarantor does not own or control, directly or indirectly,
any corporation, association or other entity other than the subsidiaries listed
in Schedule 2 to this Agreement.
(e) Capitalization. Each of the Company and the Guarantor has an authorized
capitalization as set forth in the Preliminary Offering Memorandum and the
Offering Memorandum under the heading "Capitalization." All the outstanding
shares of capital stock of the Guarantor have been duly and validly authorized
and issued and are fully paid and non-assessable. All the outstanding shares of
capital stock or other equity interests of the Company and each other subsidiary
of the Guarantor have been duly and validly authorized and issued, are fully
paid and non-assessable and are owned directly or indirectly by the Guarantor
(except, in the case of any foreign subsidiary, for directors' qualifying shares
), free and clear of any lien, charge, encumbrance, security interest,
restriction on voting or transfer or any other claim of any third party.
(f) Financial Statements; Independent Accountants. The consolidated
financial statements included or incorporated by reference in the Preliminary
Offering Memorandum and the Offering Memorandum present fairly, in all material
respects, the consolidated financial position of the Guarantor and its
subsidiaries as of the dates indicated and the consolidated results of their
operations and the changes in their cash flows for the periods specified; such
financial statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout the periods
covered thereby, except as indicated in the notes thereto; and the other
financial information included or incorporated by reference in the Preliminary
Offering Memorandum and the Offering Memorandum has been derived from the
accounting records of the Guarantor and its subsidiaries and presents fairly, in
all material respects, the information shown thereby. Arthur Andersen LLP, who
have certified certain financial statements of the Guarantor and its
subsidiaries, and Ernst & Young LLP, who the Guarantor has recently retained as
independent public accountants, are each independent public accountants with
respect to the Guarantor and its subsidiaries within the meaning of Rule 101 of
the Code of Professional Conduct of the American Institute of Certified Public
Accountants and its interpretations and rulings thereunder.
(g) No Violation or Default. Neither the Guarantor nor any of its
subsidiaries (including the Company) is (i) in violation of its charter, by-laws
or similar organizational documents; (ii) in default, and no event has occurred
that, with notice or lapse of time or both, would constitute such a default, in
the due performance or observance of any term, covenant or condition contained
in any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Guarantor or any of its subsidiaries (including the
Company) is a party or by which any of them is bound or to which any of their
respective properties or assets are subject; or (iii) in violation of any law or
statute or any judgment, order, rule or regulation of any court or arbitrator or
5
governmental or regulatory authority, except, in the case of clauses (ii) and
(iii) above, for any such defaults or violations that would not, individually or
in the aggregate, have a Material Adverse Effect.
(h) Licenses and Permits. The Guarantor and its subsidiaries (including the
Company) possess all licenses, franchises, certificates, permits and other
authorizations issued by, and have made all declarations and filings with, the
appropriate federal, state, local or foreign governmental or regulatory
authorities ("Permits") that are necessary for the ownership or lease of their
respective properties or the conduct of their respective businesses as described
in the Preliminary Offering Memorandum and the Offering Memorandum, except where
the failure to possess or make the same would not, individually or in the
aggregate, have a Material Adverse Effect. Except as described in the
Preliminary Offering Memorandum and the Offering Memorandum, the Guarantor and
its subsidiaries (including the Company) have fulfilled and performed all their
obligations with respect to such Permits, and no event has occurred that allows,
or after notice or lapse of time, or both, would allow, revocation or
termination thereof or result in any other impairment of the rights of the
holder of any such Permit, except for any such failures to fulfill and perform
or such revocations, terminations or impairments that would not, individually or
in the aggregate, have a Material Adverse Effect. Except as described in the
Preliminary Offering Memorandum and the Offering Memorandum, neither the
Guarantor nor any of its subsidiaries (including the Company) has received
notice of any revocation or modification of any such Permit or has any reason to
believe that any such Permit will not be renewed in the ordinary course, except
for any such revocations, modifications or nonrenewals as would not,
individually or in the aggregate, have Material Adverse Effect.
(i) Legal Proceedings. Except as described in the Preliminary Offering
Memorandum and the Offering Memorandum, there are no legal, governmental or
regulatory investigations, actions, suits or proceedings pending to which the
Guarantor or any subsidiary of the Guarantor (including the Company) is or may
be a party or to which any property of the Guarantor or any subsidiary of the
Guarantor (including the Company) is or may be the subject that, individually or
in the aggregate, if determined adversely to the Guarantor or any of its
subsidiaries (including the Company), would have a Material Adverse Effect; and
to the best knowledge of the Company and the Guarantor, no such investigations,
actions, suits or proceedings are threatened or contemplated by any governmental
or regulatory authority or threatened by others.
(j) No Labor Disputes. No labor disturbance by or dispute with employees of
the Guarantor or any of its subsidiaries (including the Company) exists or, to
the best knowledge of the Company and the Guarantor, is contemplated or
threatened, except for any such disturbances or disputes as would not,
individually or in the aggregate, have Material Adverse Effect.
(k) Taxes. Each of the Guarantor and its subsidiaries (including the
Company) has filed all federal, state, local and foreign tax returns required to
be filed through the date hereof or has obtained extensions thereof, and has
paid all taxes shown on such returns and all assessments received by it to the
6
extent that the same have become due or is contesting such taxes in good faith
by appropriate proceedings.
(l) Compliance with ERISA. The Guarantor and its subsidiaries (including
the Company) are in compliance in all material respects with all presently
applicable provisions of the Employee Retirement Income Security Act of 1974, as
amended, including the regulations and published interpretations thereunder
("ERISA"). To the extent applicable, no "reportable event" (as defined in ERISA)
has occurred with respect to any "pension plan" (as defined in ERISA) for which
the Guarantor or any of its subsidiaries (including the Company) would have any
liability. Neither the Guarantor nor any of its subsidiaries (including the
Company) has incurred or expects to incur any material liability under (i) Title
IV of ERISA with respect to termination of, or withdrawal from, any "pension
plan" or (ii) Sections 412 or 4971 of the Internal Revenue Code of 1986, as
amended, including the regulations and published interpretations thereunder
(collectively, the "Code"); and each "pension plan" for which the Guarantor or
any of its subsidiaries (including the Company) would have any liability that is
intended to be qualified under Section 401(a) of the Code is so qualified in all
material respects and nothing has occurred, whether by action or by failure to
act, which would cause the loss of such qualification.
(m) Environmental Matters. There has been no storage, disposal, generation,
manufacture, refinement, transportation, handling or treatment of solid wastes,
hazardous wastes or hazardous substances by the Guarantor or any of its
subsidiaries (including the Company) (or, to the knowledge of any of them, any
of their predecessors in interest) at, upon or from any of the property now or
previously owned or leased by any of them in violation of any applicable law,
ordinance, rule, regulation, order, judgment, decree or permit or which would
require remedial actions under any applicable law, ordinance, rule, regulation,
order, judgment, decree or permit, except for any such violations or remedial
actions as would not, individually or in the aggregate, have a Material Adverse
Effect. There has been no spill, discharge, leak, emission, injection, escape,
dumping or release of any kind onto any such property or into the environment
surrounding any such property of any solid wastes, hazardous wastes or hazardous
substances due to or caused by the Guarantor or any of its subsidiaries
(including the Company) or with respect to which any of them has knowledge,
except for any such spills, discharges, leakages, emissions, injections,
escapes, dumpings or releases as would not, individually or in the aggregate,
have a Material Adverse Effect. As used in this Section 3(m), the terms "solid
wastes," "hazardous wastes" and "hazardous substances" shall have the meanings
specified in any applicable local, state, federal and foreign laws or
regulations with respect to human health and safety, pollution or environmental
protection.
(n) Intellectual Property. The Guarantor and its subsidiaries (including
the Company) own or possess adequate rights to use all patents, patent
applications, trademarks, service marks, trade names, trademark registrations,
service mark registrations, copyrights, licenses and know-how (including trade
secrets and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures) that are material to the Guarantor and its
subsidiaries taken as a whole necessary for the conduct of their respective
businesses; and the conduct of their respective businesses will not conflict in
7
any material respect with any such rights of others, and the Guarantor and its
subsidiaries (including the Company) have not received any notice of any claim
of infringement of or conflict with any such rights of others, except for any
such claims as would not, individually or in the aggregate, have a Material
Adverse Effect.
(o) Insurance. The Guarantor and its subsidiaries (including the Company)
have insurance covering their respective properties, operations, personnel and
businesses, including business interruption, which insurance is in amounts and
insures against such losses and risks as are adequate to protect the Guarantor
and its subsidiaries (including the Company) and their respective businesses;
and neither the Guarantor nor any of its subsidiaries (including the Company)
has (i) received notice from any insurer or agent of such insurer that capital
improvements or other expenditures are required or necessary to be made in order
to continue such insurance or (ii) any reason to believe that it will not be
able to renew its existing insurance coverage as and when such coverage expires
or to obtain similar coverage at reasonable cost from similar insurers as may be
necessary to continue its business.
(p) Due Authorization. The Company and the Guarantor have full right, power
and authority to execute and deliver this Agreement, the Securities, the
Indenture (including the Guarantees set forth therein), the Exchange Securities
and the Registration Rights Agreement (collectively, the "Transaction
Documents") and to perform their respective obligations hereunder and
thereunder; and all action required to be taken for the due and proper
authorization, execution and delivery of each of the Transaction Documents and
the consummation of the transactions contemplated thereby has been duly and
validly taken.
(q) The Indenture. The Indenture has been duly authorized by the Company
and the Guarantor and, when duly executed and delivered in accordance with its
terms by each of the parties thereto, will constitute a valid and legally
binding agreement of the Company and the Guarantor, enforceable against the
Company and the Guarantor in accordance with its terms, except as that
enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or transfer or other laws
affecting the enforcement of creditors' rights generally and (ii) general
principles of equity (collectively, the "Enforceability Exceptions"); and, on
the Closing Date, the Indenture will comply in all material respects with the
requirements of the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), and the rules and regulations of the Commission applicable to
an indenture that is qualified thereunder. The Indenture conforms in all
material respects to the description thereof contained in the Preliminary
Offering Memorandum and the Offering Memorandum.
(r) The Securities and the Guarantees. The Securities have been duly
authorized by the Company and, when duly executed, authenticated, issued and
delivered as provided in the Indenture and paid for as provided herein, will be
duly and validly issued and outstanding and will constitute valid and legally
binding obligations of the Company, enforceable against the Company in
accordance with their terms and entitled to the benefits of the Indenture,
8
subject to the Enforceability Exceptions; and the Guarantees have been duly
authorized by the Guarantor and, when the Securities have been duly executed,
authenticated, issued and delivered as provided in the Indenture and paid for as
provided herein, will be valid and legally binding obligations of the Guarantor,
enforceable against the Guarantor in accordance with their terms and entitled to
the benefits of the Indenture, subject to the Enforceability Exceptions. The
Securities and the Guarantees conform in all material respects to the
descriptions thereof contained in the Preliminary Offering Memorandum and the
Offering Memorandum.
(s) The Exchange Securities. On the Closing Date, the Exchange Securities
(including the related guarantees) will have been duly authorized by the Company
and the Guarantor and, when duly executed, authenticated, issued and delivered
as contemplated by the Registration Rights Agreement, will be duly and validly
issued and outstanding and will constitute valid and legally binding obligations
of the Company, as issuer, and the Guarantor, as guarantor, enforceable against
the Company and the Guarantor in accordance with their terms and entitled to the
benefits of the Indenture, subject to the Enforceability Exceptions.
(t) Purchase and Registration Rights Agreements. This Agreement has been
duly authorized, executed and delivered by the Company and the Guarantor; and
the Registration Rights Agreement has been duly authorized by the Company and
the Guarantor and, when duly executed and delivered in accordance with its terms
by each of the parties thereto, will constitute a valid and legally binding
agreement of the Company and the Guarantor, enforceable against the Company and
the Guarantor in accordance with its terms, subject to the Enforceability
Exceptions, and except that rights to indemnity and contribution thereunder may
be limited by applicable law and public policy. Each of this Agreement and the
Registration Rights Agreement conforms in all material respects to the
description thereof contained in the Preliminary Offering Memorandum and the
Offering Memorandum.
(u) No Conflicts with Existing Instruments; No Consents Required. The
execution, delivery and performance by each of the Company and the Guarantor of
each Transaction Document to which it is a party, the issuance and sale of the
Securities (including the Guarantees) and compliance by the Company and the
Guarantor with the terms thereof and the consummation of the transactions
contemplated by the Transaction Documents will not (i) conflict with or result
in a breach or violation of any of the terms or provisions of, or constitute a
default under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Guarantor or any of its
subsidiaries (including the Company) pursuant to, any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument to which any of them
is a party or by which any of them is bound or to which any of their respective
properties or assets is subject, (ii) result in any violation of the provisions
of the charter, by-laws or similar organizational documents of the Guarantor or
any of its subsidiaries (including the Company) or (iii) result in the violation
of any law or statute or any judgment, order or regulation of any court or
arbitrator or governmental or regulatory authority, except, in the case of
9
clauses (i) and (iii) above, for any such conflict, breach or violation that
would not, individually or in the aggregate, have a Material Adverse Effect. No
consent, approval, authorization, order, registration or qualification of or
with any court or arbitrator or governmental or regulatory authority is required
for the execution, delivery and performance by each of the Company and the
Guarantor of each Transaction Document to which it is a party, the issuance and
sale of the Securities (including the Guarantees) and compliance by the Company
and the Guarantor with the terms thereof and the consummation of the
transactions contemplated by the Transaction Documents, except for such
consents, approvals, authorizations, orders and registrations or qualifications
as may be required (i) under applicable state securities laws in connection with
the purchase and resale of the Securities by the Initial Purchasers and (ii)
with respect to the Exchange Securities (including the related guarantees) under
the Securities Act and applicable state securities laws as contemplated by the
Registration Rights Agreement.
(v) Rule 144A Eligibility. On the Closing Date, the Securities will not be
of the same class as securities listed on a national securities exchange
registered under Section 6 of the Exchange Act or quoted in an automated
inter-dealer quotation system; and each of the Preliminary Offering Memorandum
and the Offering Memorandum, as of its respective date, contains or will contain
all the information that, if requested by a prospective purchaser of the
Securities, would be required to be provided to such prospective purchaser
pursuant to Rule 144A(d)(4) under the Securities Act.
(w) Securities Law Exemptions. Assuming the accuracy of the representations
and warranties of the Initial Purchasers contained in Section 1(b) (including
Annex A hereto) and their compliance with their agreements set forth therein and
except as contemplated by the Registration Rights Agreement, it is not
necessary, in connection with the issuance and sale of the Securities to the
Initial Purchasers and the offer, resale and delivery of the Securities by the
Initial Purchasers in the manner contemplated by this Agreement and the Offering
Memorandum, to register the Securities under the Securities Act or to qualify
the Indenture under the Trust Indenture Act. None of the Company, the Guarantor
or any of their affiliates (as defined in Rule 501(b) of Regulation D) has,
directly or through any agent, sold, offered for sale, solicited offers to buy
or otherwise negotiated in respect of, any security (as defined in the
Securities Act), that is or will be integrated with the sale of the Securities
in a manner that would require registration of the offering of the Securities
hereunder pursuant to the Securities Act. None of the Company, the Guarantor or
any of their affiliates or any other person acting on its or their behalf (other
than the Initial Purchasers, as to which no representation is made) has (i)
solicited offers for, or offered or sold, the Securities by means of any form of
general solicitation or general advertising within the meaning of Rule 502(c) of
Regulation D or in any manner involving a public offering within the meaning of
Section 4(2) of the Securities Act or (ii) engaged in any directed selling
efforts within the meaning of Regulation S under the Securities Act ("Regulation
S") within the United States, and all such persons have complied with the
offering restrictions requirement of Regulation S.
10
(x) No Stabilization. Neither the Company nor the Guarantor has taken,
directly or indirectly, any action designed to or that could reasonably be
expected to cause or result in any stabilization or manipulation of the price of
the Securities.
(y) Investment Company Act. Neither the Guarantor nor any of its
subsidiaries (including the Company) is, and after giving effect to the offering
and sale of the Securities and the application of the proceeds thereof as
described in the Preliminary Offering Memorandum and the Offering Memorandum
none of them will be, an "investment company" or an entity "controlled" by an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended, and the rules and regulations of the Commission thereunder
(collectively, the "Investment Company Act").
(z) No Other Registration Rights; No Broker's Fees. There are no contracts,
agreements or understandings between the Company or the Guarantor and any other
person granting such person the right to require the Company or the Guarantor to
include any securities in the securities to be registered pursuant to any
registration statement to be filed under the Registration Rights Agreement.
Neither the Guarantor nor any of its subsidiaries (including the Company) is a
party to any contract, agreement or understanding with any person (other than
this Agreement) that would give rise to a valid claim against any of them or any
Initial Purchaser for a brokerage commission, finder's fee or like payment in
connection with the offering and sale of the Securities.
4. Further Agreements of the Company and the Guarantor. The Company and the
Guarantor jointly and severally covenant and agree with each Initial Purchaser
that:
(a) Delivery of Copies. The Company and the Guarantor will deliver to the
Initial Purchasers as many copies of the Preliminary Offering Memorandum and the
Offering Memorandum (including all amendments and supplements thereto) as the
Representative may reasonably request.
(b) Amendments or Supplements. At any time prior to the completion of the
initial offering of the Securities, before making or distributing any amendment
or supplement to the Preliminary Offering Memorandum or the Offering Memorandum
or filing with the Commission any document that will be incorporated by
reference therein, the Company and the Guarantor will furnish to the
Representative and counsel for the Initial Purchasers a copy of the proposed
amendment or supplement or document to be incorporated by reference therein for
review, and will not distribute any such proposed amendment or supplement or
file any such document with the Commission to which the Representative
reasonably objects.
(c) Notice to the Representative. The Company and the Guarantor will advise
the Representative promptly, and confirm such advice in writing, (i) of the
issuance by any governmental or regulatory authority of any order preventing or
suspending the use of the Preliminary Offering Memorandum or the Offering
Memorandum or the initiation or threatening of any proceeding for that purpose;
(ii) of the occurrence of any event at any time prior to the completion of the
initial offering of the Securities as a result of which the Offering Memorandum
as then amended or supplemented would include any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
11
therein, in the light of the circumstances existing when the Offering Memorandum
is delivered to a purchaser, not misleading; and (iii) of the receipt by the
Company or the Guarantor of any notice with respect to any suspension of the
qualification of the Securities for offer and sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose; and the Company
and the Guarantor will use their reasonable best efforts to prevent the issuance
of any such order preventing or suspending the use of the Preliminary Offering
Memorandum or the Offering Memorandum or suspending any such qualification of
the Securities and, if issued, will use their reasonable best efforts to obtain
as soon as possible the withdrawal thereof.
(d) Ongoing Compliance of the Offering Memorandum. If at any time prior to
the completion of the initial offering of the Securities (i) any event shall
occur or condition shall exist as a result of which it is necessary to amend or
supplement the Offering Memorandum in order to make the statements therein, in
the light of the circumstances existing when the Offering Memorandum is
delivered to a purchaser, not misleading or (ii) it is necessary to amend or
supplement the Offering Memorandum to comply with any applicable law or any
applicable rule, regulation or order of any governmental or regulating
authority, the Company and the Guarantor will immediately notify the Initial
Purchasers thereof and forthwith prepare and, subject to paragraph (b) above,
furnish to the Initial Purchasers such amendments or supplements to the Offering
Memorandum (or any document to be filed with the Commission and incorporated by
reference therein) as may be necessary so that the statements in the Offering
Memorandum as so amended or supplemented (or including such document to be
incorporated by reference therein) will not, in the light of the circumstances
existing when the Offering Memorandum is delivered to a purchaser, be misleading
or so that the Offering Memorandum will comply with law.
(e) Blue Sky Compliance. The Company and the Guarantor will cooperate with
the Initial Purchasers to qualify the Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions as the Representative shall
reasonably request and will continue such qualifications in effect so long as
may be reasonably required for the offering and resale of the Securities;
provided that neither the Company nor the Guarantor shall be required to (i)
qualify as a foreign corporation or other entity or as a dealer in securities in
any such jurisdiction where it would not otherwise be required to so qualify,
(ii) file any general consent to service of process in any such jurisdiction or
(iii) subject itself to taxation in any such jurisdiction if it is not already
so subject.
(f) Clear Market. During the period from the date hereof through and
including the Closing Date, the Company and the Guarantor will not, without the
prior written consent of the Representative, offer, sell, contract to sell or
otherwise dispose of any debt securities issued or guaranteed by the Company or
the Guarantor and having a term of more than one year.
12
(g) Use of Proceeds. The Company will apply the net proceeds from the sale
of the Securities as described in the Preliminary Offering Memorandum and the
Offering Memorandum.
(h) Supplying Information. While the Securities remain outstanding and are
"restricted securities" within the meaning of Rule 144(a)(3) under the
Securities Act, the Company and the Guarantor will, during any period in which
the Company or the Guarantor is not subject to and in compliance with Section 13
or 15(d) of the Exchange Act, furnish to holders of the Securities and
prospective purchasers of the Securities designated by such holders, upon the
request of such holders or such prospective purchasers, the information required
to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.
(i) DTC. The Company and the Guarantor will assist the Initial Purchasers
in arranging for the Securities to be eligible for clearance and settlement
through The Depository Trust Company ("DTC"), the Euroclear System ("Euroclear")
and Clearstream Banking, societe anonyme ("Clearstream").
(j) No Resales by the Company and the Guarantor. Until the issuance of the
Exchange Securities, the Company and the Guarantor will not, and will not permit
any of their affiliates (as defined in Rule 144 under the Securities Act) to,
resell any of the Securities that have been acquired by any of them, except for
Securities purchased by the Company, the Guarantor or any of their affiliates
and resold in a transaction registered under the Securities Act.
(k) No Integration. None of the Company, the Guarantor or any of their
affiliates (as defined in Rule 501(b) of Regulation D) will, directly or through
any agent, sell, offer for sale, solicit offers to buy or otherwise negotiate in
respect of, any security (as defined in the Securities Act), that is or will be
integrated with the sale of the Securities in a manner that would require
registration of the Securities under the Securities Act.
(l) No General Solicitation or Directed Selling Efforts. None of the
Company, the Guarantor or any of their affiliates or any other person acting on
its or their behalf (other than the Initial Purchasers, as to which no covenant
is given) will (i) solicit offers for, or offer or sell, the Securities by means
of any form of general solicitation or general advertising within the meaning of
Rule 502(c) of Regulation D or in any manner involving a public offering within
the meaning of Section 4(2) of the Securities Act or (ii) engage in any directed
selling efforts within the meaning of Regulation S within the United States, and
all such persons will comply with the offering restrictions requirement of
Regulation S.
(m) No Stabilization. Neither the Company nor the Guarantor will take,
directly or indirectly, any action designed to or that could reasonably be
expected to cause or result in any stabilization or manipulation of the price of
the Securities.
13
5. Conditions of Initial Purchasers' Obligations. The obligation of each
Initial Purchaser to purchase Securities on the Closing Date as provided herein
is subject to the performance by the Company and the Guarantor of their
respective obligations hereunder and to the following additional conditions:
(a) Representations and Warranties. The representations and warranties of
the Company and the Guarantor contained herein shall be true and correct on the
date hereof and on and as of the Closing Date; the statements of the Company,
the Guarantor and their respective officers made in any certificates delivered
pursuant to this Agreement shall be true and correct on and as of the Closing
Date; and the Company and the Guarantor shall have complied with all agreements
and all conditions to be performed or satisfied on their part hereunder at or
prior to the Closing Date.
(b) No Downgrading. Subsequent to the execution and delivery of this
Agreement, (i) no downgrading shall have occurred in the rating accorded the
Securities or any other debt securities or preferred stock issued or guaranteed
by the Company or the Guarantor by any "nationally recognized statistical rating
organization," as such term is defined by the Commission for purposes of Rule
436(g)(2) under the Securities Act; and (ii) no such organization shall have
publicly announced that it has under surveillance or review (other than an
announcement with positive implications of a possible upgrading) its rating of
the Securities or of any other debt securities or preferred stock issued or
guaranteed by the Company or the Guarantor.
(c) No Material Adverse Change. Subsequent to the execution and delivery of
this Agreement, no event or condition of a type described in Section 3(c) hereof
shall have occurred or shall exist, which event or condition is not described in
the Offering Memorandum (excluding any amendment or supplement thereto or any
document filed with the Commission after the date hereof and incorporated by
reference therein) and the effect of which in the judgment of the Representative
makes it impracticable or inadvisable to proceed with the offering, sale or
delivery of the Securities on the terms and in the manner contemplated by this
Agreement and the Offering Memorandum (excluding any amendment or supplement
thereto or any document filed with the Commission after the date hereof and
incorporated by reference therein).
(d) Guarantor Officer's Certificate. The Representative shall have received
on and as of the Closing Date a certificate of an executive officer of the
Guarantor who has specific knowledge of the Guarantor's financial matters and is
satisfactory to the Representative (i) confirming that such officer has
carefully reviewed the Offering Memorandum and, to the best knowledge of such
officer, the representation set forth in Section 3(a) hereof is true and correct
with respect to the Guarantor and (ii) to the effect set forth in paragraphs (a)
through (c) above.
(e) Company Officer's Certificate. The Representative shall have received
on and as of the Closing Date a certificate of an executive officer of the
Company who has specific knowledge of the Company's financial matters and is
satisfactory to the Representative (i) confirming that such officer has
carefully reviewed the Offering Memorandum and, to the best knowledge of such
14
officer, the representation set forth in Section 3(a) hereof is true and correct
with respect to the Company and (ii) to the effect set forth in paragraphs (a)
through (c) above.
(f) Comfort Letters. On the date of this Agreement, Arthur Andersen LLP,
and on the date of this Agreement and on the Closing Date, Ernst & Young LLP,
shall have furnished to the Representative, at the request of the Company and
the Guarantor, letters, dated the respective dates of delivery thereof and
addressed to the Initial Purchasers, in form and substance reasonably
satisfactory to the Representative, containing statements and information of the
type customarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information contained
in the Preliminary Offering Memorandum and the Offering Memorandum.
(g) Opinion of Counsel for the Guarantor. Arnall Golden Gregory, LLP,
counsel for the Guarantor, shall have furnished to the Representative, at the
request of the Guarantor, their written opinion, dated the Closing Date and
addressed to the Initial Purchasers, in form and substance reasonably
satisfactory to the Representative, substantially to the effect set forth in
Annex B hereto.
(h) Opinion of Counsel for the Company. Stewart McKelvey Stirling Scales,
Canadian counsel for the Company, shall have furnished to the Representative, at
the request of the Company and the Guarantor, their written opinion, dated the
Closing Date and addressed to the Initial Purchasers, in form and substance
reasonably satisfactory to the Representative, substantially to the effect set
forth in Annex C hereto.
(i) Opinion of Counsel for the Initial Purchasers. The Representative shall
have received on and as of the Closing Date an opinion of Baker Botts L.L.P.,
counsel for the Initial Purchasers, with respect to such matters as the
Representative may reasonably request, and such counsel shall have received such
documents and information as they may reasonably request to enable them to pass
upon such matters.
(j) No Legal Impediment to Issuance. No action shall have been taken and no
statute, rule, regulation or order shall have been enacted, adopted or issued by
any federal, state or foreign governmental or regulatory authority that would,
as of the Closing Date, prevent the issuance or sale of the Securities or the
issuance of the Guarantees; and no injunction or order of any federal, state or
foreign court shall have been issued that would, as of the Closing Date, prevent
the issuance or sale of the Securities or the issuance of the Guarantees.
(k) Good Standing. The Representative shall have received on and as of the
Closing Date satisfactory evidence of the good standing of the Company, the
Guarantor and their significant subsidiaries in their respective jurisdictions
of organization and their good standing in such other jurisdictions as the
Representative may reasonably request, in each case in writing or any standard
form of telecommunication, from the appropriate governmental authorities of such
jurisdictions.
15
(l) Registration Rights Agreement. The Initial Purchasers shall have
received a counterpart of the Registration Rights Agreement that shall have been
executed and delivered by duly authorized officers of the Company and the
Guarantor.
(m) DTC, Euroclear and Clearstream. The Securities shall be eligible for
clearance and settlement through DTC, Euroclear and Clearstream.
(n) Additional Documents. On or prior to the Closing Date, the Company and
the Guarantor shall have furnished to the Representative such further
certificates and documents as the Representative may reasonably request.
All opinions, letters, certificates and evidence mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to the Representative.
6. Indemnification and Contribution.
(a) Indemnification of the Initial Purchasers. The Company and the
Guarantor jointly and severally agree to indemnify and hold harmless each
Initial Purchaser, its affiliates and each person, if any, who controls such
Initial Purchaser within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, from and against any and all losses, claims,
damages and liabilities (including, without limitation, legal fees and other
expenses incurred in connection with any suit, action or proceeding or any claim
asserted), joint or several, caused by any untrue statement or alleged untrue
statement of a material fact contained in the Preliminary Offering Memorandum or
the Offering Memorandum (or any amendment or supplement thereto), or caused by
any omission or alleged omission to state therein a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with any
information relating to any Initial Purchaser furnished to the Company and the
Guarantor in writing by such Initial Purchaser through the Representative
expressly for use therein; provided, that with respect to any such untrue
statement in or omission from the Preliminary Offering Memorandum, the indemnity
agreement contained in this paragraph (a) shall not inure to the benefit of any
Initial Purchaser to the extent that the sale to the person asserting any such
loss, claim, damage or liability was an initial resale by such Initial Purchaser
and any such loss, claim, damage or liability of or with respect to such Initial
Purchaser results from the fact that both (i) a copy of the Offering Memorandum
(excluding any documents incorporated by reference therein) was not sent or
given to such person at or prior to the written confirmation of the sale of such
Securities to such person and (ii) the untrue statement in or omission from such
Preliminary Offering Memorandum was corrected in the Offering Memorandum unless,
in either case, such failure to deliver the Offering Memorandum was a result of
non-compliance by the Company and the Guarantor with the provisions of Section 4
hereof.
16
(b) Indemnification of the Company and the Guarantor. Each Initial
Purchaser agrees, severally and not jointly, to indemnify and hold harmless the
Company, the Guarantor and each person, if any, who controls the Company or the
Guarantor within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act to the same extent as the indemnity set forth in paragraph
(a) above, but only with respect to any losses, claims, damages or liabilities
caused by any untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with any information relating
to such Initial Purchaser furnished to the Company and the Guarantor in writing
by such Initial Purchaser through the Representative expressly for use in the
Preliminary Offering Memorandum and the Offering Memorandum (or any amendment or
supplement thereto).
(c) Notice and Procedures. If any suit, action, proceeding (including any
governmental or regulatory investigation), claim or demand shall be brought or
asserted against any person in respect of which indemnification may be sought
pursuant to either paragraph (a) or (b) above, such person (the "Indemnified
Person") shall promptly notify the person against whom such indemnification may
be sought (the "Indemnifying Person") in writing; provided that the failure to
notify the Indemnifying Person shall not relieve it from any liability that it
may have under this Section 6 except to the extent that it has been materially
prejudiced (through the forfeiture of substantive rights or defenses) by such
failure; and provided, further, that the failure to notify the Indemnifying
Person shall not relieve it from any liability that it may have to an
Indemnified Person otherwise than under this Section 6. If any such proceeding
shall be brought or asserted against an Indemnified Person and it shall have
notified the Indemnifying Person thereof, the Indemnifying Person shall retain
counsel reasonably satisfactory to the Indemnified Person to represent the
Indemnified Person and any others entitled to indemnification pursuant to this
Section 6 that the Indemnifying Person may designate in such proceeding and
shall pay the fees and expenses of such counsel related to such proceeding. In
any such proceeding, any Indemnified Person shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such Indemnified Person unless (i) the Indemnifying Person and the
Indemnified Person shall have mutually agreed to the contrary; (ii) the
Indemnifying Person has failed within a reasonable time to retain counsel
reasonably satisfactory to the Indemnified Person; (iii) the Indemnified Person
shall have reasonably concluded that there may be legal defenses available to it
that are different from or in addition to those available to the Indemnifying
Person; or (iv) the named parties in any such proceeding (including any
impleaded parties) include both the Indemnifying Person and the Indemnified
Person and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It is
understood and agreed that the Indemnifying Person shall not, in connection with
any proceeding or related proceeding in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all Indemnified Persons, and that all such fees and expenses shall
be reimbursed as they are incurred. Any such separate firm for any Initial
Purchaser, its affiliates and any control persons of such Initial Purchaser
shall be designated in writing by J.P. Morgan Securities Inc. and any such
separate firm for the Company, the Guarantor and any control persons of the
Company and the Guarantor shall be designated in writing by the Guarantor. The
Indemnifying Person shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the Indemnifying Person agrees to
indemnify each Indemnified Person from and against any loss or liability by
reason of such settlement or judgment. Notwithstanding the foregoing sentence,
if at any time an Indemnified Person shall have requested that an Indemnifying
Person reimburse the Indemnified Person for fees and expenses of counsel as
contemplated by this paragraph, the Indemnifying Person shall be liable for any
17
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 30 days after receipt by the Indemnifying
Person of such request and (ii) the Indemnifying Person shall not have
reimbursed the Indemnified Person in accordance with such request prior to the
date of such settlement. No Indemnifying Person shall, without the written
consent of the Indemnified Person, effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Person is or could
have been a party and indemnification could have been sought hereunder by such
Indemnified Person, unless such settlement (x) includes a full and unconditional
release of such Indemnified Person from all liability on claims that are the
subject matter of such proceeding and (y) does not include any statement as to
or any admission of fault, culpability or a failure to act by or on behalf of
any Indemnified Person.
(d) Contribution. If the indemnification provided for in paragraphs (a) and
(b) above is unavailable to an Indemnified Person or insufficient in respect of
any losses, claims, damages or liabilities referred to therein, then each
Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Indemnified Person as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Guarantor on the one hand and the
Initial Purchasers on the other from the offering of the Securities or (ii) if
the allocation provided by clause (i) is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) but also the relative fault of the Company and the
Guarantor on the one hand and the Initial Purchasers on the other in connection
with the statements or omissions that resulted in such losses, claims, damages
or liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company and the Guarantor on the one hand and
the Initial Purchasers on the other shall be deemed to be in the same respective
proportions as the net proceeds (before deducting expenses other than discounts
and commissions received by the Initial Purchasers) received by the Company from
the sale of the Securities and the total discounts and commissions received by
the Initial Purchasers in connection therewith, as provided in this Agreement,
bear to the aggregate offering price of the Securities. The relative fault of
the Company and the Guarantor on the one hand and the Initial Purchasers on the
other shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
or the Guarantor or by the Initial Purchasers and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
18
(e) Limitation on Liability. The Company, the Guarantor and the Initial
Purchasers agree that it would not be just and equitable if contribution
pursuant to this Section 6 were determined by pro rata allocation (even if the
Initial Purchasers were treated as one entity for such purpose) or by any other
method of allocation that does not take account of the equitable considerations
referred to in paragraph (d) above. The amount paid or payable by an Indemnified
Person as a result of the losses, claims, damages and liabilities referred to in
paragraph (d) above shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses incurred by such Indemnified Person in
connection with any such action or claim. Notwithstanding the provisions of this
Section 6, in no event shall an Initial Purchaser be required to contribute any
amount in excess of the amount by which the total discounts and commissions
received by such Initial Purchaser with respect to the offering of the
Securities exceeds the amount of any damages that such Initial Purchaser has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Initial Purchasers' obligations to contribute
pursuant to this Section 6 are several in proportion to their respective
purchase obligations hereunder and not joint.
(f) Non-Exclusive Remedies. The remedies provided for in this Section 6 are
not exclusive and shall not limit any rights or remedies that may otherwise be
available to any Indemnified Person at law or in equity.
7. Termination. This Agreement may be terminated in the absolute discretion
of the Representative, by notice to the Company and the Guarantor, if after the
execution and delivery of this Agreement and prior to the Closing Date (i)
trading generally shall have been suspended or materially limited on the New
York Stock Exchange or the over-the-counter market; (ii) trading of any
securities issued or guaranteed by the Company or the Guarantor shall have been
suspended on any exchange or in any over-the-counter market; (iii) a general
moratorium on commercial banking activities shall have been declared by federal
or New York State authorities or a material disruption in commercial banking or
securities settlement or clearance services in the United States shall have
occurred; or (iv) there shall have occurred any outbreak or escalation of
hostilities or any change in financial markets or any calamity or crisis, either
within or outside the United States, that in the judgment of the Representative
is material and adverse and makes it impracticable or inadvisable to proceed
with the offering, sale or delivery of the Securities on the terms and in the
manner contemplated by this Agreement and the Offering Memorandum (excluding any
amendment or supplement thereto or any document filed with the Commission after
the date hereof and incorporated by reference therein).
8. Defaulting Initial Purchaser. (a) If, on the Closing Date, any Initial
Purchaser defaults on its obligation to purchase the Securities that it has
agreed to purchase hereunder, the non-defaulting Initial Purchasers may in their
discretion arrange for the purchase of such Securities by other persons
satisfactory to the Company and the Guarantor on the terms contained in this
Agreement. If, within 36 hours after any such default by any Initial Purchaser,
the non-defaulting Initial Purchasers do not arrange for the purchase of such
19
Securities, then the Company and the Guarantor shall be entitled to a further
period of 36 hours within which to procure other persons satisfactory to the
non-defaulting Initial Purchasers to purchase such Securities on such terms. If
other persons become obligated or agree to purchase the Securities of a
defaulting Initial Purchaser, either the non-defaulting Initial Purchasers or
the Company and the Guarantor may postpone the Closing Date for up to five full
business days in order to effect any changes that in the opinion of counsel for
the Company and the Guarantor or counsel for the Initial Purchasers may be
necessary in the Offering Memorandum or in any other document or arrangement,
and the Company and the Guarantor agree to promptly prepare any amendment or
supplement to the Offering Memorandum that effects any such changes. As used in
this Agreement, the term "Initial Purchaser" includes, for all purposes of this
Agreement unless the context otherwise requires, any person not listed in
Schedule 1 hereto that, pursuant to this Section 8, purchases Securities that a
defaulting Initial Purchaser agreed but failed to purchase.
(b) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Initial Purchaser or Initial Purchasers by the
non-defaulting Initial Purchasers and the Company and the Guarantor as provided
in paragraph (a) above, the aggregate principal amount of such Securities that
remains unpurchased does not exceed one-eleventh of the aggregate principal
amount of all the Securities, then the Company and the Guarantor shall have the
right to require each non-defaulting Initial Purchaser to purchase the principal
amount of Securities that such Initial Purchaser agreed to purchase hereunder
plus such Initial Purchaser's pro rata share (based on the principal amount of
Securities that such Initial Purchaser agreed to purchase hereunder) of the
Securities of such defaulting Initial Purchaser or Initial Purchasers for which
such arrangements have not been made.
(c) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Initial Purchaser or Initial Purchasers by the
non-defaulting Initial Purchasers and the Company and the Guarantor as provided
in paragraph (a) above, the aggregate principal amount of such Securities that
remains unpurchased exceeds one-eleventh of the aggregate principal amount of
all the Securities, or if the Company and the Guarantor shall not exercise the
right described in paragraph (b) above, then this Agreement shall terminate
without liability on the part of the non-defaulting Initial Purchasers, the
Company or the Guarantor, except that the Company and the Guarantor will
continue to be liable for the payment of expenses as set forth in Section 9
hereof and except that the provisions of Section 6 hereof shall not terminate
and shall remain in effect.
(d) Nothing contained herein shall relieve a defaulting Initial Purchaser
of any liability it may have to the Company, the Guarantor or any non-defaulting
Initial Purchaser for damages caused by its default.
9. Payment of Expenses. (a) Whether or not the transactions contemplated by
this Agreement are consummated or this Agreement is terminated, the Company and
the Guarantor jointly and severally agree to pay or cause to be paid all costs
and expenses incident to the performance of their respective obligations
20
hereunder, including without limitation, (i) the costs incident to the
authorization, issuance, sale, preparation and delivery of the Securities and
any taxes payable in that connection; (ii) the costs incident to the preparation
and printing of the Preliminary Offering Memorandum and the Offering Memorandum
(including any amendment or supplement thereto) and the distribution thereof;
(iii) the costs of reproducing and distributing each of the Transaction
Documents; (iv) the fees and expenses of the Company's and the Guarantor's
counsel and independent accountants; (v) the fees and expenses incurred in
connection with the registration or qualification and determination of
eligibility for investment of the Securities under the laws of such
jurisdictions as the Representative reasonably may designate and the
preparation, printing and distribution of a Blue Sky Memorandum (including the
related fees and expenses of counsel for the Initial Purchasers); (vi) any fees
charged by rating agencies for rating the Securities; (vii) the fees and
expenses of the Trustee and any paying agent (including related fees and
expenses of any counsel to such parties); (viii) all expenses and application
fees incurred in connection with the approval of the Securities for delivery and
settlement through DTC, Euroclear and Clearstream; and (ix) all expenses
incurred by the Company and the Guarantor in connection with any "road show"
presentation to potential investors.
(b) If (i) the Company for any reason fails to tender the Securities for
delivery to the Initial Purchasers or (ii) the Initial Purchasers terminate this
Agreement or decline to purchase the Securities for any reason permitted under
this Agreement other than the termination of this Agreement pursuant to Section
7(i), (iii) or (iv), the Company and the Guarantor jointly and severally agree
to reimburse the Initial Purchasers for all out-of-pocket costs and expenses
(including the fees and expenses of their counsel) reasonably incurred by the
Initial Purchasers in connection with this Agreement and the offering
contemplated hereby.
10. Persons Entitled to Benefit of Agreement. This Agreement shall inure to
the benefit of and be binding upon the Company, the Guarantor and any
controlling persons referred to herein, the Initial Purchasers, their respective
affiliates and any controlling persons referred to herein, and their respective
successors. Nothing in this Agreement is intended or shall be construed to give
any other person any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein. No purchaser of
Securities from any Initial Purchaser shall be deemed to be a successor merely
by reason of such purchase.
11. Survival. The respective indemnities, rights of contribution,
representations, warranties and agreements of the Company, the Guarantor and the
Initial Purchasers contained in this Agreement or made by or on behalf of the
Company, the Guarantor or the Initial Purchasers pursuant to this Agreement or
any certificate delivered pursuant hereto shall survive the delivery of and
payment for the Securities and shall remain in full force and effect, regardless
of any termination of this Agreement or any investigation made by or on behalf
of the Company, the Guarantor or the Initial Purchasers.
21
12. Initial Purchasers' Information. The Company, the Guarantor and the
Initial Purchasers acknowledge and agree that the only information relating to
any Initial Purchaser that has been furnished to the Company and the Guarantor
in writing by any Initial Purchaser through the Representative expressly for use
in the Preliminary Offering Memorandum and the Offering Memorandum (or any
amendment or supplement thereto) consists of the following in the Offering
Memorandum: [the third paragraph of text under the heading "Plan of
Distribution," concerning the terms of the offering by the Initial Purchasers,
the fourth and fifth sentences of the tenth paragraph of text under the heading
"Plan of Distribution," concerning market making by the Initial Purchasers, the
eleventh paragraph of text under the "Plan of Distribution," concerning
over-allotment, stabilization and short positions created by the Initial
Purchasers, and the twelfth paragraph of text under the "Plan of Distribution,"
concerning the Internet offering by the Initial Purchasers.]
13. Certain Defined Terms. For purposes of this Agreement, (a) except where
otherwise expressly provided, the term "affiliate" has the meaning set forth in
Rule 405 under the Securities Act; (b) the term "business day" means any day
other than a day on which banks are permitted or required to be closed in New
York City; (c) the term "subsidiary" has the meaning set forth in Rule 405 under
the Securities Act; and (d) the term "significant subsidiary" has the meaning
set forth in Rule 1-02 of Regulation S-X under the Exchange Act.
14. Miscellaneous. (a) Authority of the Representative. Any action by the
Initial Purchasers hereunder may be taken by J.P. Morgan Securities Inc. on
behalf of the Initial Purchasers, and any such action taken by J.P. Morgan
Securities Inc. shall be binding upon the Initial Purchasers.
(b) Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted and
confirmed by any standard form of telecommunication. Notices to the Initial
Purchasers shall be given to the Representative c/o J.P. Morgan Securities Inc.,
270 Park Avenue, New York, New York 10017 (fax: 212/834-6702); Attention:
Transaction Execution Group. Notices to the Company and the Guarantor shall be
given to them at SYSCO Corporation, 1390 Enclave Parkway, Houston, Texas
77077-2099, (fax: 281/584-2524); Attention: General Counsel.
(c) Governing Law; Jurisdiction; Service of Process. This Agreement shall
be governed by and construed in accordance with the laws of the State of New
York, without regard to any principles of conflicts of laws that would result in
the application of the laws of any other jurisdiction. Each of the Company and
the Guarantor hereby submits to the non-exclusive jurisdiction of the federal
and state courts in the Borough of Manhattan in The City of New York in any suit
or proceeding arising out of or relating to this Agreement or the transactions
contemplated thereby. The Company has appointed CT Corporation System, 111
Eighth Avenue, New York, New York 10011 as its Authorized Agent (the "Authorized
Agent") upon whom process may be served in any suit, action or proceeding
arising out of or relating to this Agreement or the transactions contemplated
thereby that may be instituted in any federal or state court in the Borough of
22
Manhattan in The City of New York by any Initial Purchaser or by any person who
controls any Initial Purchaser, and agrees that service of process upon such
agent, and written notice of said service to the Company by the person serving
the same to the address provided in Section 14(b), shall be deemed in every
respect effective service of process upon the Company in any such suit or
proceeding. The Company further agrees to take any and all action as may be
necessary to maintain such designation and appointment of such agent in full
force and effect for a period of ten years from the date of this Agreement. If
for any reason CT Corporation System shall cease to be available to act as such
authorized agent for the Company, the Company agrees to designate a new agent in
the State of New York on the terms and for the purpose of this Section 14(c)
reasonably satisfactory to J.P. Morgan Securities Inc. Each of the Company and
the Guarantor irrevocably and unconditionally waives, to the fullest extent
permitted by law, any objection that it may have to laying of venue in respect
of any action, suit or proceeding arising out of or in connection with this
Agreement or the transactions contemplated hereby to which it is a party brought
in any federal or state court located in the State of New York and hereby agrees
not to plead or claim in any such court that any such action, suit or proceeding
has been brought in an inconvenient forum. Each of the Company and the Guarantor
also waives, to the fullest extent permitted by law, all right to trial by jury
in any claim or counterclaim (whether based upon contract, tort or otherwise) in
any way arising out of or relating to this Agreement.
(d) Counterparts. This Agreement may be signed in any number of
counterparts (which may include counterparts delivered by any standard form of
telecommunication), each of which shall be an original and all of which together
shall constitute one and the same instrument.
(e) Amendments or Waivers. No amendment or waiver of any provision of this
Agreement, nor any consent or approval to any departure therefrom, shall in any
event be effective unless the same shall be in writing and signed by the parties
hereto.
(f) Headings. The headings herein are included for convenience of reference
only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
23
If the foregoing is in accordance with your understanding, please indicate
your acceptance of this Agreement by signing in the space provided below.
Very truly yours,
SYSCO INTERNATIONAL, CO.
By: /s/ Diane Day Sanders
-----------------------------------------
Name: Diane Day Sanders
Title: Treasurer
SYSCO CORPORATION
By: /s/ Diane Day Sanders
------------------------------------------
Name: Diane Day Sanders
Title: Vice President & Treasurer
ACCEPTED: May 20, 2002
J.P. MORGAN SECURITIES INC.
For itself and on behalf of the
several Initial Purchasers listed
in Schedule 1 hereto.
By /s/ Maria Sramek
---------------------------------
Name: Maria Sramek
Title: Vice President
24
Schedule 1
Initial Purchaser Principal Amount
----------------- --------------------------
J.P. Morgan Securities Inc. $ 100,000,000
TD Securities (USA) Inc. 38,460,000
First Union Securities, Inc. 19,240,000
Banc of America Securities LLC 11,540,000
Wells Fargo Brokerage Services, LLC 11,540,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated 7,700,000
SunTrust Capital Markets, Inc. 5,760,000
Tokyo-Mitsubishi International plc 5,760,000
--------------------------
Total $ 200,000,000
ANNEX A
Restrictions on Offers and Sales Outside the United States
----------------------------------------------------------
In connection with offers and sales of Securities outside the United States:
(a) Each Initial Purchaser acknowledges that the Securities have not been
registered under the Securities Act and may not be offered or sold within the
United States or to, or for the account or benefit of, U.S. persons except
pursuant to an exemption from, or in transactions not subject to, the
registration requirements of the Securities Act.
(b) Each Initial Purchaser, severally and not jointly, represents, warrants
and agrees that:
(i) Such Initial Purchaser has offered and sold the Securities, and
will offer and sell the Securities, (A) as part of the distribution of the
Securities at any time and (B) otherwise until 40 days after the later of
the commencement of the offering of the Securities and the Closing Date,
only in accordance with Regulation S under the Securities Act ("Regulation
S") or Rule 144A or any other available exemption from registration under
the Securities Act.
(ii) None of such Initial Purchaser or any of its affiliates or any
other person acting on its or their behalf has engaged or will engage in
any directed selling efforts with respect to the Securities, and all such
persons have complied and will comply with the offering restrictions
requirement of Regulation S.
(iii) At or prior to the confirmation of sale of any Securities sold
in reliance on Regulation S, such Initial Purchaser will have sent to each
distributor, dealer or other person receiving a selling concession, fee or
other remuneration that purchases Securities from it during the
distribution compliance period a confirmation or notice to substantially
the following effect:
"The Securities covered hereby have not been registered under the U.S.
Securities Act of 1933, as amended (the "Securities Act"), and may not
be offered or sold within the United States or to, or for the account
or benefit of, U.S. persons (i) as part of their distribution at any
time or (ii) otherwise until 40 days after the later of the
commencement of the offering of the Securities and the date of
original issuance of the Securities, except in accordance with
Regulation S or Rule 144A or any other available exemption from
registration under the Securities Act. Terms used above have the
meanings given to them by Regulation S."
(iv) Such Initial Purchaser has not and will not enter into any
contractual arrangement with any distributor with respect to the
distribution of the Securities, except with its affiliates or with the
prior written consent of the Company and the Guarantor.
A-1
Terms used in paragraph (a) and this paragraph (b) and not otherwise defined in
this Agreement have the meanings given to them by Regulation S.
(c) Each Initial Purchaser, severally and not jointly, represents, warrants
and agrees that (i) it has not offered or sold and prior to the date six months
after the Closing Date will not offer or sell any Securities to persons in the
United Kingdom except to persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments (as principal or agent)
for the purposes of their businesses or otherwise in circumstances which have
not resulted and will not result in an offer to the public in the United Kingdom
within the meaning of the Public Offers of Securities Regulations 1995; (ii) it
has complied and will comply with all applicable provisions of the Financial
Services and Markets Act 2000 with respect to anything done by it in relation to
the Securities in, from or otherwise involving the United Kingdom; and (iii) it
has only communicated or caused to be communicated and will only communicate or
cause to be communicated any invitation or inducement to engage in investment
activity, within the meaning of section 21 of the Financial Services and Markets
Act 2000, received by it in connection with the issue or sale of any Securities
in circumstances which section 21(1) of the Financial Services and Markets Act
2000 does not apply to the Company.
(d) Each Initial Purchaser acknowledges that no action has been or will be
taken by the Company and the Guarantor that would permit a public offering of
the Securities, or possession or distribution of the Preliminary Offering
Memorandum, the Offering Memorandum or any other offering or publicity material
relating to the Securities, in any country or jurisdiction where action for that
purpose is required.
A-2
ANNEX B
[Form of Opinion of Counsel for the Guarantor]
May 23, 2002
J.P. Morgan Securities Inc.
As Representative of the
Several Initial Purchasers
c/o J.P. Morgan Securities Inc.
270 Park Avenue
New York, New York 10017
Ladies and Gentlemen:
We are furnishing this opinion letter to you at the request of SYSCO
Corporation, a Delaware corporation (the "Guarantor"), under Section 5(g) of the
Purchase Agreement dated May 20, 2002 (the "Purchase Agreement") by and among
SYSCO International, Co., an unlimited liability company organized under the
laws of Nova Scotia, Canada and a direct, wholly owned subsidiary of the
Guarantor (the "Company"), the Guarantor and the several Initial Purchasers
listed in Schedule 1 thereto (the "Initial Purchasers"), relating to the
issuance and sale by the Company to the Initial Purchasers of $200,000,000
aggregate principal amount of 6.10% Senior Notes due 2012 (the "Securities"),
which will be guaranteed on a senior unsecured basis as to the payment of
principal, premium, if any, and interest by the Guarantor (the "Guarantees").
The Company will issue the Securities and the Guarantor will issue the
Guarantees under an Indenture dated as of May 23, 2002 (the "Indenture") among
the Company, the Guarantor and Wachovia Bank, National Association, as trustee
(the "Trustee"), and as described in the Offering Memorandum dated May 20, 2002
prepared by the Company and the Guarantor in connection with the offering of the
Securities and the Guarantees (the "Offering Memorandum"). Capitalized terms
used herein and not otherwise defined herein have the respective meanings given
to them in the Purchase Agreement.
We have examined the originals, or copies certified or otherwise
identified, of the restated certificate of incorporation and amended and
restated bylaws, each as amended to date, of the Guarantor (the "Charter
Documents"), the Offering Memorandum, the Purchase Agreement, the Registration
Rights Agreement dated May 23, 2002 among the Company, the Guarantor and the
Initial Purchasers relating to the Securities (the "Registration Rights
Agreement"), the Indenture, the Securities, corporate records of the Guarantor
and its subsidiaries, including minute books the Guarantor has furnished to us,
certificates of public officials and of representatives of the Guarantor,
statutes and other instruments and documents, as a basis for the opinions we
hereinafter express. In giving these opinions, we have relied on certificates of
officers of the Guarantor and of public officials with respect to the accuracy
of the factual matters those certificates cover or contain, and we have assumed
that all signatures on documents we have examined are genuine, all documents
B-1
submitted to us as originals are authentic, all documents submitted to us as
certified or photostatic copies conform to the original copies of those
documents and those original copies are authentic.
In giving this opinion, we have also relied on the following assumptions:
A. Each of the individuals executing the Purchase Agreement, the
Registration Rights Agreement, the Indenture (including the Guarantees) and the
Securities (collectively, the "Transaction Documents") has requisite legal
capacity and all the signatures on the Transaction Documents are genuine.
B. The execution and delivery of each and all of the Transaction Documents
are free from any form of fraud, misrepresentation, mistake of fact, duress or
criminal activity, none of which has occurred insofar as we are aware.
C. The Indenture has been duly authorized, executed and delivered by the
Trustee to the extent required and constitutes the legal, valid and binding
obligation of the Trustee enforceable against it in accordance with its terms,
and the Trustee has all requisite corporate power and authority to perform its
obligations under the Indenture, and to enforce the Indenture.
D. The Trustee has all requisite governmental certifications of authority,
licenses, permits, consents, qualifications and documents, if any, to perform
its obligations under the Indenture, and to enforce the Indenture.
E. The issuance of the Securities, execution and delivery of the Indenture
and the Securities and the issuance of the Exchange Securities have been duly
authorized by the Company, and no consent, approval, authorization, order,
registration or qualification of or with Canadian federal court or provincial
court in the Province of Nova Scotia or governmental or regulatory authority
having jurisdiction in the Province of Nova Scotia is required for the issuance
of the Exchange Securities.
We have made no investigation of the facts or law underlying the foregoing
assumptions, and you have not requested us to do so, but we wish to advise you
that nothing has come to our attention which would provide us with actual
knowledge that we are not justified in making such assumptions.
On the basis of the foregoing and subject to the assumptions, limitations
and qualifications we set forth herein, we are of the following opinions:
1. The Guarantor has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware, has all
corporate power and authority necessary to own or hold its properties and to
conduct the business in which it is engaged, as described in the Offering
Memorandum, and is duly qualified to do business and is in good standing in each
jurisdiction in which its ownership or lease of property or the conduct of its
business requires such qualification, except where the failure to be so
qualified would not, individually or in the aggregate, have a material adverse
effect on the business, properties, management, condition (financial or
B-2
otherwise), results of operations or business prospects of the Guarantor and its
subsidiaries taken as a whole or on the performance by the Company or the
Guarantor of their respective obligations under any of the Purchase Agreement,
the Securities and the Guarantees (a "Material Adverse Effect").
2. The authorized capital stock of the Guarantor is comprised of
1,000,000,000 shares of common stock, par value $1.00 per share ("Common
Stock"), and 1,500,000 shares of preferred stock, par value $1.00 per share
("Preferred Stock"). No shares of Preferred Stock have been issued. All the
issued and outstanding shares of Common Stock have been duly and validly
authorized and issued and are fully paid and nonassessable.
3. To our knowledge, except as described in the Offering Memorandum, there
are no legal, governmental or regulatory investigations, actions, suits or
proceedings pending to which the Guarantor or any of its subsidiaries is or may
be a party or to which any property of the Guarantor or any of its subsidiaries
is or may be the subject that, individually or in the aggregate, if determined
adversely to the Guarantor or any of its subsidiaries, would have a Material
Adverse Effect; and to our knowledge, no such investigations, actions, suits or
proceedings are threatened or contemplated by any governmental or regulatory
authority or threatened by others.
4. The Guarantor has all requisite corporate power and authority to execute
and deliver each of the Transaction Documents to which it is a party and to
perform its obligations thereunder; and all action required to be taken on the
part of the Guarantor for the due and proper authorization, execution and
delivery of each Transaction Document to which it is a party and the
consummation of the transactions contemplated thereby has been duly and validly
taken.
5. The Indenture has been duly authorized, executed and delivered by the
Guarantor and constitutes a valid and legally binding agreement of the
Guarantor, enforceable against the Company and the Guarantor in accordance with
its terms. The Indenture (a) complies in all material respects with the
requirements of the Trust Indenture Act of 1939 and the rules and regulations of
the Securities and Exchange Commission (the "Commission") applicable to an
indenture that is qualified thereunder and (b) conforms in all material respects
to the description thereof contained in the Offering Memorandum.
6. The Securities, when duly authenticated as provided in the Indenture and
paid for as provided in the Purchase Agreement, will be duly and validly issued
and outstanding and will constitute valid and legally binding obligations of the
Company enforceable against the Company in accordance with their terms and
entitled to the benefits of the Indenture. The Guarantees have been duly
authorized by the Guarantor and, when the Securities have been duly executed,
authenticated, issued and delivered in accordance with the Indenture and paid
for as provided in the Purchase Agreement, will be valid and legally binding
obligations of the Guarantor, enforceable against the Guarantor in accordance
B-3
with their terms and entitled to the benefits of the Indenture. The Securities
and the Guarantees conform in all material respects to the descriptions thereof
contained in the Offering Memorandum.
7. The Exchange Securities, when duly executed, authenticated, issued and
delivered as contemplated by the Registration Rights Agreement and in accordance
with the Indenture, will be duly and validly issued and outstanding and will
constitute valid and legally binding obligations of the Company, enforceable
against the Company in accordance with their terms and entitled to the benefits
of the Indenture. The guarantees related to the Exchange Securities have been
duly authorized by the Guarantor and, when the Exchange Securities are duly
executed, authenticated, issued and delivered as contemplated by the
Registration Rights Agreement and in accordance with the Indenture, the related
guarantees will be duly and validly issued and outstanding and will constitute
valid and legally binding obligations of the Guarantor, enforceable against the
Guarantor in accordance with their terms and entitled to the benefits of the
Indenture.
8. The Purchase Agreement has been duly authorized, executed and delivered
by the Guarantor. The Purchase Agreement conforms in all material respects to
the description thereof contained in the Offering Memorandum.
9. The Registration Rights Agreement has been duly authorized, executed and
delivered by the Guarantor and constitutes a valid and legally binding agreement
of the Guarantor and the Company, enforceable against the Guarantor and the
Company in accordance with its terms. The Registration Rights Agreement conforms
in all material respects to the description thereof contained in the Offering
Memorandum.
10. The execution, delivery and performance by the Guarantor of each
Transaction Document to which it is a party, the issuance of the Guarantees and
compliance by the Guarantor with the terms thereof and the consummation of the
transactions contemplated by the Transaction Documents will not (a) conflict
with or result in a breach or violation of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Guarantor or any of its
subsidiaries pursuant to, any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument (i) to which any of them is a party or by which
any of them is bound or to which any of their respective properties or assets
are subject and (ii) that has been filed with the Commission as an exhibit to
any document that has been incorporated by reference into the Offering
Memorandum, (b) result in any violation of the provisions of the Charter
Documents of the Guarantor or (c) result in the violation of the laws of the
State of New York, the General Corporation Law of the State of Delaware or the
federal laws of the United States.
11. Assuming the accuracy of the representations and warranties of the
Initial Purchasers contained in the Purchase Agreement and their compliance with
their agreements set forth in the Purchase Agreement, no consent, approval,
authorization, order, registration or qualification of or with any United States
federal or state court or arbitrator or governmental or regulatory authority is
required for the execution, delivery and performance by the Guarantor of each
Transaction Document to which it is a party, the issuance of the Guarantees and
B-4
compliance by the Guarantor with the terms thereof and the consummation of the
transactions contemplated by the Transaction Documents, except for such
consents, approvals, authorizations, orders and registrations or qualifications
as may be required (a) under applicable state securities laws in connection with
the purchase and resale of the Securities by the Initial Purchasers and (b) with
respect to the Exchange Securities (including the related guarantees) under the
Securities Act of 1933 and applicable state securities laws as contemplated by
the Registration Rights Agreement.
12. The descriptions in the Offering Memorandum of statutes, legal,
governmental and regulatory proceedings and con-tracts and other documents are
accurate in all material respects; and the statements in (a) the Offering
Memorandum under the headings "Description of Notes," "United States Federal and
Canadian Income Tax Considerations -- United States Federal Income Tax
Consequences," "-- Consequences to United States Holders," "--Consequences to
Non-United States Holders" and "Plan of Distribution," (b) "Item 3 -- Legal
Proceedings" of Part I of the Guarantor's annual report on Form 10-K for the
year ended June 30, 2001, which is incorporated by reference in the Offering
Memorandum, and (c) "Item 1 -- Legal Proceedings" of Part II of the Guarantor's
quarterly reports on Form 10-Q filed since such annual report, in each case
insofar as such statements constitute summaries of the legal matters, documents
or proceedings referred to therein, fairly present the information called for
with respect to such legal matters, documents and proceedings and fairly
summarize the matters described therein in all material respects.
13. The documents incorporated by reference in the Offering Memorandum
(other than the financial statements and other accounting and financial
information contained therein, as to which we have not been asked to comment),
when filed with the Commission, conformed in all material respects to the
applicable requirements of the Securities Exchange Act of 1934.
14. Neither the Guarantor nor any of its subsidiaries is, and after giving
effect to the offering and sale of the Securities and the application of the
proceeds thereof as described in the Offering Memorandum none of them will be,
an "investment company" or an entity "controlled" by an "investment company"
within the meaning of the Investment Company Act of 1940.
15. Neither the issuance, sale and delivery of the Securities nor the
application of the proceeds thereof by the Company as described in the Offering
Memorandum will violate Regulation T, U or X of the Board of Governors of the
Federal Reserve System or any other regulation of such Board of Governors.
16. Assuming the accuracy of the representations and warranties of the
Initial Purchasers contained in the Purchase Agreement and their compliance with
their agreements set forth in the Purchase Agreement and except as contemplated
by the Registration Rights Agreement, it is not necessary, in connection with
the issuance and sale of the Securities to the Initial Purchasers and the offer,
resale and delivery of the Securities by the Initial Purchasers in the manner
B-5
contemplated by the Purchase Agreement and the Offering Memorandum, to register
the Securities under the Securities Act of 1933 or to qualify the Indenture
under the Trust Indenture Act of 1939.
17. To our knowledge, there are no contracts, agreements or understandings
between the Company or the Guarantor and any other person granting such person
the right to require the Company or the Guarantor to include the offering of any
securities of the Company or the Guarantor in the offering registered pursuant
to the registration statement to be filed in accordance with the Registration
Rights Agreement.
18. To our knowledge, all the outstanding shares of capital stock or other
equity interests of each subsidiary of the Guarantor have been duly and validly
authorized and issued, are fully paid and nonassessable and, to our knowledge,
are owned by the Guarantor directly or indirectly through one or more
subsidiaries (except, in the case of any foreign subsidiary, for directors'
qualifying shares), free and clear of any lien, charge, encumbrance, security
interest, restriction on voting or transfer or any other claim of any third
party.
19. To our knowledge, neither the Guarantor nor any of its subsidiaries is
(a) in violation of its charter, by-laws or similar organizational documents,
(b) in default, and no event has occurred that, with notice or lapse of time or
both, would constitute such a default, in the due performance or observance of
any term, covenant or condition contained in any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Guarantor or
any of its subsidiaries is a party or by which any of them is bound or to which
any of their respective properties or assets are subject or (c) in violation of
any law or statute or any judgment, order, rule or regulation of any court or
arbitrator or governmental or regulatory authority, except, in the case of
clauses (b) and (c) above, for any such defaults or violations that would not,
individually or in the aggregate, have a Material Adverse Effect.
20. To our knowledge, the Guarantor and its subsidiaries possess all
licenses, franchises, certificates, permits and other authorizations issued by,
and have made all declarations and filings with, the appropriate federal, state,
local or foreign governmental or regulatory authorities ("Permits") that are
necessary for the ownership or lease of their respective properties or the
conduct of their respective businesses as described in the Offering Memorandum,
except where the failure to possess or make the same would not, individually or
in the aggregate, have a Material Adverse Effect. To our knowledge, except as
described in the Offering Memorandum, the Guarantor and its subsidiaries have
fulfilled and performed all their obligations with respect to such Permits, and
no event has occurred that allows, or after notice or lapse of time, or both,
would allow, revocation or termination thereof or result in any other impairment
of the rights of the holder of any such Permit, except for any such failures to
fulfill and perform or such revocations, terminations or impairments that would
not, individually or in the aggregate, have a Material Adverse Effect.
We have participated in conferences with officers and other representatives
of the Guarantor, representatives of the independent public accountants of the
Guarantor and your representatives at which the contents of the Offering
B-6
Memorandum and related matters were discussed. Although we have not undertaken
to determine independently, and do not assume any responsibility for, the
accuracy, completeness or fairness of the statements contained in the Offering
Memorandum (except to the extent set forth in paragraph 13 above), we advise you
that, on the basis of the foregoing, no facts have come to our attention that
lead us to believe that the Offering Memorandum (other than (a) the financial
statements and schedules (including the notes thereto and the auditor's reports
thereon) incorporated by reference therein or omitted therefrom and (b) the
other accounting and financial information contained or incorporated by
reference therein or omitted therefrom, as to which we have not been asked to
comment), as of its issue date or the date hereof, contained or contains an
untrue statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
Our opinions expressed in Paragraphs 5, 6, 7 and 9 hereinabove are
expressly subject to the following exceptions and qualifications in addition to
other exceptions and qualifications set forth elsewhere herein:
(a) The effect of bankruptcy, insolvency, reorganization, moratorium and
other similar laws affecting the rights and remedies of creditors. This includes
the effect of the Federal Bankruptcy Code in its entirety, including matters of
contract rejection, fraudulent conveyance and obligation, turn-over, preference,
equitable subordination, automatic stay, conversion of a non-recourse obligation
into a recourse obligation, and substantive consolidation. This also includes
laws regarding fraudulent transfers, obligations and conveyances, and state
receivership laws.
(b) The effect of general principles of equity, whether applied by a court
of law or equity.
(c) With respect to the Indenture, the possible unenforceability of
provisions that waivers or consents by a party may not be given effect unless in
writing or in compliance with particular requirements or that a person's course
of dealing, course of performance, or the like or failure or delay in taking
actions may not constitute a waiver of related rights or provisions or that one
or more waivers may not under certain circumstances constitute a waiver of other
matters of the same kind.
(d) The effect of course of dealing, course of performance, or the like, in
modifying the terms of the Indenture or the respective rights or obligations of
the parties thereunder.
(e) The extent to which any right of indemnification and contribution
provided under the Indenture or the Registration Rights Agreement may be treated
as being unenforceable under general principles of law or equity.
(f) To the extent that the validity, binding effect or enforceability of
the Indenture, the Securities or the Registration Rights Agreement or any
provisions contained therein depends upon the application of governing state law
in a jurisdiction or jurisdictions other than the jurisdiction whose law is the
B-7
governing law, regardless of whether the same has been enacted in the
jurisdiction(s) where the rights or remedies provided by governing state law are
asserted, we do not opine that a court in any such other jurisdiction would
apply governing state law to such terms or provisions.
(g) A judgment rendered by a court of competent jurisdiction outside the
state whose law is the governing law may not be enforceable in such state if
such judgment is deemed to contravene the public policy of such state.
In this letter, references to federal statutes include all amendments
thereto and all rules and regulations of the Commission thereunder, in each case
as in effect on the date hereof.
In this letter, phrases such as "to our knowledge," "known to us" and those
with equivalent wording refer to the awareness of information by the lawyers of
this Firm who have prepared or signed this letter or been actively involved in
assisting and advising the Guarantor in connection with the preparation of the
Offering Memorandum and the execution and delivery of the Purchase Agreement,
without any independent investigation by any lawyer of this Firm.
Except as otherwise expressly stated above, we limit our opinions in this
letter in all respects to matters of the laws of the States of New York and
Georgia and the General Corporation Law of the State of Delaware.
We are furnishing this letter to you solely for your use in connection with
the transactions consummated on the date hereof under the Purchase Agreement and
may not be relied on by any other person or for any other purpose. This letter
speaks as of the date hereof, and we disclaim any obligation to update it or
advise you of any change in any matter set forth herein.
Very truly yours,
ARNALL GOLDEN GREGORY LLP
B-8
ANNEX C
[Form of Opinion of Counsel for the Company ]
May 23, 2002
J.P. MORGAN SECURITIES INC., as Representative of the Several Initial Purchasers
c/o J.P. Morgan Securities Inc.
270 Park Avenue
New York, New York 10017
Ladies and Gentlemen:
We are furnishing this opinion letter to you at the request of SYSCO
International, Co., an unlimited company (often referred to as an "unlimited
liability company") incorporated under the laws of the Province of Nova Scotia
(the "COMPANY"), under Section 5(h) of the Purchase Agreement dated May 20, 2002
(the "PURCHASE Agreement") by and among the Company, SYSCO Corporation, a
Delaware corporation (the "GUARANTOR"), and the several Initial Purchasers
listed in Schedule 1 thereto (the "INITIAL PURCHASERS"), relating to the
issuance and sale by the Company to the Initial Purchasers of $200,000,000
aggregate principal amount of 6.10% Senior Notes due 2012 (the "SECURITIES"),
which will be guaranteed on a senior unsecured basis as to the payment of
principal, premium, if any, and interest by the Guarantor (the "GUARANTEES").
The Company will issue the Securities and the Guarantor will issue the
Guarantees under an Indenture dated as of May 23, 2002 (the "INDENTURE") among
the Company, the Guarantor and Wachovia Bank, National Association, as trustee
(the "TRUSTEE"), and as described in the Offering Memorandum dated May 20, 2002
prepared by the Company and the Guarantor in connection with the offering of the
Securities and the Guarantees (including the documents incorporated by reference
therein, the "OFFERING MEMORANDUM").
We have examined the originals, or copies certified or otherwise identified, of:
(a) the corporate records of the Company, being the minute books the Company
maintained by us, and including the memorandum of association and articles
of association of the Company as contained therein;
(b) the Offering Memorandum other than the documents incorporated by reference
therein;
(c) the Purchase Agreement;
(d) the Registration Rights Agreement dated May 23, 2002 among the Company, the
Guarantor and the Initial Purchasers relating to the Securities (the
"REGISTRATION RIGHTS AGREEMENT");
(e) the Indenture (being, collectively with the Purchase Agreement, the
Registration Right Agreement and the Securities, the "Transaction
Documents");
C-1
(f) the forms of the Securities and the Exchange Securities (as defined in the
Purchase Agreement);
(g) certificates of public officials, statutes and other instruments and
documents;
(h) a certificate of status pertaining to the Company issued on behalf of the
Registrar of Joint Stock Companies for the Province of Nova Scotia, dated
May _____, 2002;
(i) resolutions of the directors of the Company dated May _____, 2002
authorizing the execution and delivery of the Transaction Documents, the
offering and issuance of the Securities and the Exchange Securities and the
issuance of the Offering Memorandum by the Company; and
(j) a certificate of an officer of the Company dated the date hereof (the
"Officer's Certificate").
We have also examined the originals or copies, certified or otherwise identified
to our satisfaction, of such public and corporate records, certificates,
instruments and other documents and have considered such questions of law as we
have deemed necessary as a basis for the opinions hereinafter expressed.
In stating our opinions, we have assumed:
a. the genuineness of all signatures, the authenticity of all documents
submitted to us as originals and the conformity to original documents
of all documents submitted to us as notarial, certified, telecopies,
conformed or reproduction copies thereof and the authenticity of the
originals of such documents;
b. the completeness and accuracy of all statements of fact set forth in
official public records and certificates and other documents supplied
by public officials;
c. the completeness and accuracy of all statements of fact set forth in
the Officer's Certificate;
d. that the constating documents and corporate resolutions in the minute
book of the Company reviewed by us above remain unamended and
complete; and
e. that each of the Transaction Documents (other than the Securities) has
been signed by ____________________ as _________________ of the
Company and physically delivered by the Company to the other parties
thereto or their lawful representatives and that no such delivery was
subject to any condition or escrow which has not been satisfied.
C-2
We express no opinion as to the application of the securities laws of the
Province of Nova Scotia to the offering of the Securities or the Exchange
Securities.
The opinions hereinafter expressed are limited to the federal laws of Canada and
the laws of the Province of Nova Scotia as of the date of this opinion letter
and we express no opinion as to the laws of any other jurisdiction.
On the basis of the foregoing and subject to the assumptions, limitations and
qualifications we set forth herein, we are of the following opinions:
1. The Company has been duly organized and is validly existing and in good
standing as to the payment of annual fees and filing of annual returns as
an unlimited company under the laws of the Province of Nova Scotia, Canada
and has all power and authority necessary to own or hold its properties and
to conduct the business, in each case as described in the Offering
Memorandum.
2. The Company has an authorized capital consisting of 10,000,000 common
shares without nominal or par value. All the outstanding shares of capital
stock of the Company have been duly and validly authorized and issued, are
fully paid and non-assessable and are registered on the books of the
Company in the name of the Guarantor.
3. The Company has all requisite corporate power and authority to execute and
deliver each of the Transaction Documents and to perform its obligations
thereunder; and all action required to be taken on the part of the Company
for the due and proper authorization, execution and delivery of each
Transaction Document and the consummation of the transactions contemplated
thereby has been duly and validly taken.
4. The Indenture and the Securities have been duly authorized, executed and
delivered by the Company.
5. The issuance of the Exchange Securities (as defined in the Purchase
Agreement) to be issued and delivered in the manner provided for in the
Indenture in exchange for the Securities has been duly authorized by the
Company, and no consent, approval, authorization, order, registration or
qualification of or with Canadian federal court or provincial court in the
Province of Nova Scotia or governmental or regulatory authority having
jurisdiction in the Province of Nova Scotia is required for the issuance of
the Exchange Securities.
6. The Purchase Agreement has been duly authorized, executed and delivered by
the Company.
7. The Registration Rights Agreement has been duly authorized, executed and
delivered by the Company.
8. The execution, delivery and performance by the Company of each Transaction
Document, the issuance and sale of the Securities and compliance by the
Company with the terms thereof and the consummation of the transactions
C-3
contemplated by the Transaction Documents will not (a) conflict with or
result in any violation of the provisions of the memorandum of association
or articles of association of the Company or (b) conflict with or result in
the violation of any law, statute or regulation of the Province of Nova
Scotia or any federal Canadian law, statute or regulation applicable
therein.
9. No consent, approval, authorization, order, registration or qualification
of or with any Canadian federal court or provincial court in the Province
of Nova Scotia or governmental or regulatory authority having jurisdiction
in the Province of Nova Scotia is required for the execution, delivery and
performance by the Company of any of the Transaction Documents, the
issuance and sale of the Securities and compliance by the Company with the
terms thereof and the consummation of the transactions contemplated by the
Transaction Documents.
10. The descriptions in the Offering Memorandum of Canadian federal or Nova
Scotia provincial statutes and the statements in the Offering Memorandum
under the headings "Description of Notes" and "United States Federal and
Canadian Income Tax Considerations - Canadian Federal Income Tax
Considerations," to the extent that they constitute summaries of matters of
law or regulation of the Province of Nova Scotia or of Canada applicable in
the Province of Nova Scotia or legal conclusions with respect to such laws,
fairly summarize the matters described therein in all material respects.
11. A court of competent jurisdiction in the Province of Nova Scotia would give
effect to the choice of New York law as chosen by the parties as the proper
law governing each of the Transaction Documents provided that such choice
of law is bona fide (in the sense that it was not made solely with a view
to avoiding the consequences of the laws of any other jurisdiction) and
provided that such choice of law is not contrary to public policy, as that
term is understood under the laws of the Province of Nova Scotia and the
federal laws of Canada applicable therein. Based solely on our review of
the Transaction Documents and the Offering Memorandum but without having
any knowledge of New York law we have no reason to believe that a court of
competent jurisdiction in the Province of Nova Scotia would refuse to apply
New York law to the Transaction Documents.
12. Insofar as such submission is enforceable under the laws governing such
submission, the submission by the Company to the non-exclusive jurisdiction
of the federal and state courts in the State of New York is a valid
submission to the jurisdiction of such court and would be upheld by a Nova
Scotia court.
13. If the provisions of any or all of the Transaction Documents were sought to
be enforced in the Province of Nova Scotia in accordance with the laws
applicable thereto, as chosen by the parties, namely, New York law, a court
of competent jurisdiction in the Province of Nova Scotia would, subject to
paragraph 11 above, and to the extent specifically pleaded and proved as a
fact by expert evidence, recognize the choice of New York law and apply
such law to all issues that, under the conflict of laws rules of the
Province of Nova Scotia, are to be determined in accordance with the proper
or governing law of a contract, provided that the application of such
C-4
choice of law is not contrary to public policy as that term is understood
under the laws of the Province of Nova Scotia and the federal laws of
Canada applicable therein; and further provided that, such court will not
apply those laws of New York which a court of the Province of Nova Scotia
would characterize as revenue, expropriatory or penal or the application of
which would be inconsistent with public policy, as such term is applied by
such court and, in matters of procedure (as that term is understood under
the laws of the Province of Nova Scotia and the federal laws of Canada
applicable therein), the laws of the Province of Nova Scotia will be
applied including the Limitation of Actions Act (Nova Scotia), and a court
of competent jurisdiction in the Province of Nova Scotia will retain
discretion to decline to hear such action and apply such law if: (a) it is
contrary to public policy (as that term is understood under the laws of the
Province of Nova Scotia and the federal laws of Canada applicable therein)
for such court to do so; (b) it is not the proper forum to hear such an
action; or (c) concurrent proceedings are being brought elsewhere. Based
solely on our review of the Transaction Documents and the Offering
Memorandum but without having any knowledge of New York law, we have no
reason to believe that a court of competent jurisdiction in the Province of
Nova Scotia would refuse to enforce the Transaction Documents insofar as
the same may be enforceable in accordance with New York law.
14. The laws of the Province of Nova Scotia permit an action to be brought in a
court of competent jurisdiction in the Province of Nova Scotia to enforce
any final and conclusive judgment in personam for a definite sum of money
of any federal or state court located in the Borough of Manhattan in the
City of New York (a "NEW YORK COURT") respecting the enforcement of the
provisions of any of the Transaction Documents that is not impeachable as
void or voidable under the internal laws of the State of New York if:
(a) the court rendering such judgment had jurisdiction over the judgment
debtor, as recognized by the courts of the Province of Nova Scotia
(and an enforceable submission under the terms of the Transaction
Documents to the jurisdiction of the New York Court will ordinarily be
sufficient for this purpose), and the judgment debtor was properly
served in the action leading to such judgment;
(b) such judgment was not obtained by fraud or in a manner contrary to
natural justice and the enforcement thereof would not be inconsistent
with public policy, as that term is understood under the laws of the
Province of Nova Scotia and the federal laws of Canada applicable
therein, or contrary to any order made by the Attorney General of
Canada under the Foreign Extraterritorial Measures Act (Canada) or by
the Competition Tribunal under the Competition Act (Canada);
C-5
(c) the enforcement of such judgment does not constitute, directly or
indirectly, the enforcement of foreign revenue, expropriation or penal
laws or other laws of a public law nature;
(d) there has been no prior judgment in another court between the same
parties concerning the same issues as are dealt with in the judgment
to be enforced in the Province of Nova Scotia; and
(e) the action to enforce such judgment is commenced within the applicable
limitation periods.
Absent procedural concerns or concerns respecting particular laws of the State
of New York, we would not foresee a court of competent jurisdiction in the
Province of Nova Scotia, on public policy grounds, refusing to enforce a final
and conclusive judgment in personam of a New York Court for a definite sum of
money with respect to a matter under any of the Transaction Documents where a
substantially similar judgment would have been granted by the Nova Scotia court
had such matter been within the jurisdiction of the Nova Scotia court and
properly come before it. We have no knowledge of New York law or New York
procedure but are not aware of any general public policy concerns with respect
thereto having been raised by any Nova Scotia court.
15. In determining whether or not to enforce a final and conclusive judgment in
personam for a definite sum of money of a New York Court as described in
paragraph 14, a court of competent jurisdiction in the Province of Nova
Scotia would not refuse to recognize the jurisdiction of the court
rendering such judgment on the basis of process having been served on an
agent designated by the Company for such purpose under the Purchase
Agreement where such designation is enforceable against the Company under
the laws governing such designation and is not otherwise impeachable * .
16. To ensure the legality, validity, enforceability or admissibility into
evidence in a legal or administrative proceeding in the Province of Nova
Scotia of any of the Transaction Documents, it is not necessary that any of
the Transaction Documents, on or before the Closing Date (as defined in the
Purchase Agreement), be filed or recorded with any court or other authority
in Nova Scotia or that any registration tax, stamp duty or similar tax be
paid in Nova Scotia on or in respect of any of the Transaction Documents.
We are furnishing this letter to you solely for your use in connection with the
transactions consummated on the date hereof under the Purchase Agreement and may
not be relied on by any other person or for any other purpose. This letter
speaks as of the date hereof, and we disclaim any obligation to update it or
advise you of any change in any matter set forth herein.
Very truly yours,
STEWART MCKELVEY STIRLING SCALES
C-6
Exhibit A
[Form of Registration Rights Agreement]
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT dated May 23, 2002 (this "Agreement") is
entered into by and among SYSCO International, Co., an unlimited liability
company organized under the laws of Nova Scotia, Canada (the "Company"), SYSCO
Corporation, a Delaware corporation of which the Company is a wholly owned
subsidiary (the "Guarantor"), and J.P. Morgan Securities Inc., TD Securities
(USA) Inc., First Union Securities, Inc., Banc of America Securities LLC, Wells
Fargo Brokerage Services, LLC, Merrill Lynch, Pierce, Fenner & Smith
Incorporated, SunTrust Capital Markets, Inc., and Tokyo-Mitsubishi International
plc (the "Initial Purchasers").
The Company, the Guarantor and the Initial Purchasers are parties to the
Purchase Agreement dated May 20, 2002 (the "Purchase Agreement"), which provides
for the sale by the Company to the Initial Purchasers of $200,000,000 aggregate
principal amount of the Company's 6.10% Senior Notes due 2012 (the
"Securities"), which will be guaranteed on a senior unsecured basis as to the
payment of principal, premium, if any, and interest by the Guarantor. As an
inducement to the Initial Purchasers to enter into the Purchase Agreement, the
Company and the Guarantor have agreed to provide to the Initial Purchasers and
their direct and indirect transferees the registration rights set forth in this
Agreement. The execution and delivery of this Agreement is a condition to the
closing under the Purchase Agreement.
In consideration of the foregoing, the parties hereto agree as follows:
1. Definitions. As used in this Agreement, the following terms shall have
the following respective meanings:
"Business Day" shall mean any day that is not a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or required by law
to remain closed.
"Closing Date" shall mean the Closing Date as defined in the Purchase
Agreement.
"Company" shall have the meaning set forth in the preamble to this
Agreement and shall also include the Company's successors.
"Consummated" shall mean, for purposes of this Agreement and the Exchange
Offer, upon the latest to occur of (i) the effectiveness under the Securities
Act of the Exchange Offer Registration Statement, (ii) the maintenance of such
Registration Statement continuously effective and the keeping of the Exchange
Offer open for a period not less than the minimum period required pursuant to
Section 2(a) hereof and (iii) the delivery by the Company to the registrar under
the Indenture of Exchange Securities in the same aggregate principal amount as
the aggregate principal amount of Registrable Securities that were tendered by
Holders thereof pursuant to the Exchange Offer.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended
from time to time.
"Exchange Dates" shall have the meaning set forth in Section 2(a)(ii)
hereof.
"Exchange Offer" shall mean the exchange offer by the Company and the
Guarantor of Exchange Securities for Registrable Securities pursuant to Section
2(a) hereof.
"Exchange Offer Registration" shall mean a registration under the
Securities Act effected pursuant to Section 2(a) hereof.
"Exchange Offer Registration Statement" shall mean an exchange offer
registration statement on Form S-4 (or, if applicable, on another appropriate
form) and all amendments and supplements to such registration statement, in each
case including the Prospectus contained therein, all exhibits thereto and any
document incorporated by reference therein.
"Exchange Securities" shall mean senior notes issued by the Company and
guaranteed by the Guarantor under the Indenture containing terms identical to
the Securities (except that the Exchange Securities will not be subject to
restrictions on transfer or to any increase in annual interest rate for failure
to comply with this Agreement) and to be offered to Holders of Securities in
exchange for Securities pursuant to the Exchange Offer.
"Guarantor" shall have the meaning set forth in the preamble to this
Agreement and shall also include the Guarantor's successors.
"Holders" shall mean the Initial Purchasers, for so long as they own any
Registrable Securities, and each of their successors, assigns and direct and
indirect transferees who acquire Registrable Securities from time to time;
provided that for purposes of Sections 7 and 9 of this Agreement, the term
"Holders" shall include Participating Broker-Dealers.
"Initial Purchasers" shall have the meaning set forth in the preamble to
this Agreement.
"Indenture" shall mean the Indenture relating to the Securities dated as of
May 23, 2002 among the Company, the Guarantor and Wachovia Bank, National
Association, as trustee, and as the same may be amended from time to time in
accordance with the terms thereof.
2
"Majority Holders" shall mean the Holders of a majority of the aggregate
principal amount of outstanding Registrable Securities; provided that whenever
the consent or approval of Holders of a specified percentage of Registrable
Securities is required hereunder, Registrable Securities owned directly or
indirectly by the Company or any of its affiliates shall not be counted in
determining whether such consent or approval was given by the Holders of such
required percentage or amount.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"Participating Broker-Dealers" shall have the meaning set forth in Section
7(a) hereof.
"Person" shall mean an individual, partnership, limited liability company,
corporation, trust or unincorporated organization, or a government or agency or
political subdivision thereof.
"Purchase Agreement" shall have the meaning set forth in the preamble to
this Agreement.
"Prospectus" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including a prospectus
supplement with respect to the terms of the offering of any portion of the
Registrable Securities covered by a Shelf Registration Statement, and by all
other amendments and supplements to such prospectus, and in each case including
any document incorporated by reference therein.
"Registrable Securities" shall mean the Securities; provided that the
Securities shall cease to be Registrable Securities when: (i) a Registration
Statement with respect to such Securities has been declared effective under the
Securities Act and such Securities have been exchanged or disposed of pursuant
to such Registration Statement; (ii) such Securities are eligible to be sold
pursuant to Rule 144(k) (or any similar provision then in force, but not Rule
144A) under the Securities Act; or (iii) such Securities cease to be
outstanding.
"Registration Expenses" shall mean any and all expenses incident to
performance of or compliance by the Company and the Guarantor with the terms of
this Agreement, including without limitation: (i) all SEC, stock exchange or
NASD registration and filing fees, (ii) all fees and expenses incurred in
connection with compliance with state securities or blue sky laws (including
reasonable fees and disbursements of counsel for any Underwriters or Holders in
connection with blue sky qualification of any Exchange Securities or Registrable
Securities), (iii) all expenses of any Persons in preparing or assisting in
preparing, word processing, printing and distributing any Registration
Statement, any Prospectus and any amendments or supplements thereto, any
underwriting agreements, securities sales agreements or other similar agreements
and any other documents relating to the performance of and compliance with this
Agreement, (iv) all rating agency fees, (v) all fees and disbursements relating
3
to the qualification of the Indenture under applicable securities laws, (vi) the
fees and disbursements of the Trustee and its counsel, (vii) the fees and
disbursements of counsel for the Company and the Guarantor and, in the case of a
Shelf Registration Statement, the fees and disbursements of one counsel for the
Holders (which counsel shall be selected by the Majority Holders and which
counsel may also be counsel for the Initial Purchasers) and (viii) the fees and
disbursements of the independent public accountants of the Company and the
Guarantor, including the expenses of any special audits or "comfort" letters
required by or incident to the performance of and compliance with this
Agreement, but excluding fees and expenses of counsel to the Underwriters (other
than fees and expenses set forth in clause (ii) above) or the Holders and
underwriting discounts and commissions and transfer taxes, if any, relating to
the sale or disposition of Registrable Securities by a Holder.
"Registration Statement" shall mean any registration statement of the
Company and the Guarantor that covers any of the Exchange Securities or
Registrable Securities pursuant to the provisions of this Agreement and all
amendments and supplements to any such registration statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and any document incorporated by reference
therein.
"SEC" shall mean the U.S. Securities and Exchange Commission.
"Securities" shall have the meaning set forth in the preamble to this
Agreement.
"Securities Act" shall mean the Securities Act of 1933, as amended from
time to time.
"Shelf Registration" shall mean a registration effected pursuant to Section
2(b) hereof.
"Shelf Registration Statement" shall mean a "shelf" registration statement
of the Company and the Guarantor that covers all the Registrable Securities (but
no other securities unless approved by the Holders whose Registrable Securities
are to be covered by such Shelf Registration Statement) on an appropriate form
under Rule 415 under the Securities Act, or any similar rule that may be adopted
by the SEC, and all amendments and supplements to such registration statement,
including post-effective amendments, in each case including the Prospectus
contained therein, all exhibits thereto and any document incorporated by
reference therein.
4
"Trust Indenture Act" shall mean the Trust Indenture Act of 1939, as
amended from time to time.
"Trustee" shall mean the trustee with respect to the Securities under the
Indenture.
"Underwriter" shall have the meaning set forth in Section 5 hereof.
"Underwritten Offering" shall mean an offering in which Registrable
Securities are sold to an Underwriter for reoffering to the public.
2. Registration Under the Securities Act.
(a) Registered Exchange Offer. Except as set forth in Section 2(b), the
Company and the Guarantor agree to file under the Securities Act, as soon as
practicable but in no event later than 90 days after the Closing Date an
Exchange Offer Registration Statement covering an offer to the Holders to
exchange all the Registrable Securities for Exchange Securities. The Company and
the Guarantor agree to use their best efforts to cause the Exchange Offer
Registration Statement to be declared effective by the SEC under the Securities
Act as soon as practicable, but no later than 180 days after the Closing Date.
The Company and the Guarantor further agree to use their best efforts to cause
the Exchange Offer to be Consummated promptly, but no later than 210 days after
the Closing Date, hold the Exchange Offer open for at least 20 Business Days and
exchange Exchange Securities for all Registrable Securities that have been
properly tendered and not withdrawn on or prior to the expiration of the
Exchange Offer.
The Company and the Guarantor shall commence the Exchange Offer by mailing
the related Prospectus, appropriate letters of transmittal and other
accompanying documents to each Holder stating, in addition to such other
disclosures as are required by applicable law:
(i) that the Exchange Offer is being made pursuant to this Agreement and that
all Registrable Securities validly tendered and not properly withdrawn will
be accepted for exchange;
(ii) the dates of acceptance for exchange (which shall begin no sooner than 20
Business Days after the date such notice is mailed) (the "Exchange Dates");
(iii)that any Registrable Security not tendered will remain outstanding and
continue to accrue interest but will not retain any rights under this
Agreement;
(iv) that any Holder electing to have a Registrable Security exchanged pursuant
to the Exchange Offer will be required to surrender such Registrable
Security, together with the appropriate letters of transmittal, to the
5
institution and at the address (located in the Borough of Manhattan, The
City of New York) and in the manner specified in the notice, prior to the
close of business on the last Exchange Date; and
(v) that any Holder will be entitled to withdraw its election, not later than
the close of business on the last Exchange Date, by sending to the
institution and at the address (located in the Borough of Manhattan, The
City of New York) specified in the notice, a telegram, telex, facsimile
transmission or letter setting forth the name of such Holder, the principal
amount of Registrable Securities delivered for exchange and a statement
that such Holder is withdrawing its election to have such Securities
exchanged.
As a condition to participating in the Exchange Offer, a Holder will be
required to represent to the Company and the Guarantor that (i) any Exchange
Securities to be received by it will be acquired in the ordinary course of its
business, (ii) at the time of the commencement of the Exchange Offer it has no
arrangement or understanding with any Person to participate in the distribution
(within the meaning of the Securities Act) of the Exchange Securities in
violation of the provisions of the Securities Act, (iii) it is not an
"affiliate" (within the meaning of Rule 405 under Securities Act) of the Company
or the Guarantor and (iv) if such Holder is a broker-dealer that will receive
Exchange Securities for its own account in exchange for Registrable Securities
that were acquired as a result of market-making or other trading activities,
then such Holder will deliver a Prospectus in connection with any resale of such
Exchange Securities.
As soon as practicable after the last Exchange Date, the Company and the
Guarantor shall:
(i) accept for exchange Registrable Securities or portions thereof validly
tendered and not properly withdrawn pursuant to the Exchange Offer; and
(ii) deliver, or cause to be delivered, to the Trustee for cancellation all
Registrable Securities or portions thereof so accepted for exchange by the
Company and issue, and cause the Trustee to promptly authenticate and
deliver to each Holder, Exchange Securities equal in principal amount to
the principal amount of the Registrable Securities surrendered by such
Holder.
The Company and the Guarantor shall use their best efforts to Consummate
the Exchange Offer as provided above and shall comply with the applicable
requirements of the Securities Act, the Exchange Act and all other applicable
laws and regulations in connection with the Exchange Offer. The Exchange Offer
shall not be subject to any conditions, other than that the Exchange Offer does
not violate any applicable law or applicable interpretations of the Staff of the
SEC.
6
(b) Shelf Registration. In the event that (i) on or prior to the time the
Exchange Offer is Consummated, the Company or the Guarantor determines that
existing SEC interpretations are changed such that the Exchange Securities
received by Holders in the Exchange Offer are not or would not be, upon receipt,
transferable by each such Holder without restriction under the Securities Act,
(ii) the Exchange Offer has not been Consummated within 210 days following the
Closing Date, (iii) the Exchange Offer has been Consummated and in the opinion
of counsel for the Initial Purchasers a Registration Statement must be filed and
a Prospectus must be delivered by the Initial Purchasers in connection with any
offering or sale of Registrable Securities (other than Registrable Securities
held by Holders described in Section 7), or (iv) any applicable law or
interpretations do not permit any Holder to Participate in the Exchange Offer,
the Company and the Guarantor shall, in lieu of (or, in the case of clause (iii)
of this sentence, in addition to) conducting the Exchange Offer contemplated by
Section 2(a), file as soon as practicable after such determination, date or
notice of such opinion of counsel is given to the Company and the Guarantor, as
the case may be, but no later than 45 days after the time such obligation to
file arises, a Shelf Registration Statement providing for the sale of all the
Registrable Securities by the Holders thereof and use their best efforts to have
such Shelf Registration Statement declared effective by the SEC under the
Securities Act no later than 90 days after such Shelf Registration Statement is
filed and to keep such Shelf Registration Statement continuously effective until
the expiration of the period referred to in Rule 144(k) under the Securities Act
with respect to the Registrable Securities or such shorter period that will
terminate when all the Registrable Securities covered by such Shelf Registration
Statement have been sold pursuant to such Shelf Registration Statement. The
Company and the Guarantor further agree to supplement or amend the Shelf
Registration Statement and the related Prospectus if required by the rules,
regulations or instructions applicable to the registration form used by the
Company for such Shelf Registration Statement or by the Securities Act or by any
other rules and regulations thereunder for shelf registration or if reasonably
requested by a Holder with respect to information relating to such Holder, to
take any action reasonably necessary to enable such Holder to use the Prospectus
forming a part thereof for resales of Registrable Securities, including, without
limitation, any action necessary to identify such Holder as a selling
securityholder in the Shelf Registration Statement, and to use their best
efforts to cause any such amendment to be declared effective by the SEC under
the Securities Act and such Shelf Registration Statement and Prospectus to
become usable as soon as thereafter practicable. The Company and the Guarantor
agree to furnish to the Holders copies of any such supplement or amendment
promptly after its being used or filed with the SEC.
(c) Registration Expenses. The Company and the Guarantor shall pay all
Registration Expenses in connection with the registration pursuant to Section
2(a) and Section 2(b) hereof. Each Holder shall pay all underwriting discounts
and commissions and transfer taxes, if any, relating to the sale or disposition
of such Holder's Registrable Securities pursuant to the Shelf Registration
Statement.
7
3. Additional Interest.
(a) In the event that (i) the Company and the Guarantor have not filed the
Exchange Offer Registration Statement or Shelf Registration Statement with the
SEC on or before the date on which such Registration Statement is required to be
so filed pursuant to Section 2(a) or 2(b), respectively, or (ii) such Exchange
Offer Registration Statement or Shelf Registration Statement has not been
declared effective by the SEC under the Securities Act on or before the date on
which such Registration Statement is required to be declared effective under the
Securities Act pursuant to Section 2(a) or 2(b), respectively, or (iii) the
Exchange Offer has not been Consummated within 210 days after the Closing Date
or (iv) the Exchange Offer Registration Statement or Shelf Registration
Statement required by Section 2(a) or 2(b) hereof is filed and declared
effective by the SEC under the Securities Act but shall thereafter either be
withdrawn by the Company or the Guarantor or shall become subject to an
effective stop order issued pursuant to Section 8(d) of the Securities Act
suspending the effectiveness of such Registration Statement (except as
specifically permitted herein) without being succeeded immediately by a
post-effective amendment to such Registration Statement or an additional
Registration Statement filed and declared effective by the SEC under the
Securities Act (each such event referred to in clauses (i) through (iv) is
referred to herein as a "Registration Default" and each period during which a
Registration Default has occurred and is continuing until the Securities become
freely tradable under the Securities Act is referred to herein as, a
"Registration Default Period"), then the interest rate on the Registrable
Securities will be increased by 0.25% per annum during the first 90 days of the
Registration Default Period, and by 0.50% per annum thereafter for the remaining
portion of the Registration Default Period. The interest rate will not at any
time be increased by more than 0.50% per annum. In addition, the interest rate
on the Registrable Securities will revert to the interest rate prior to any
increase pursuant to this Section 3(a) at such time as all Registration Defaults
are cured.
(b) Without limiting the remedies available to the Initial Purchasers and
the Holders, the Company and the Guarantor acknowledge that any failure by the
Company or the Guarantor to comply with their obligations under Section 2(a) and
Section 2(b) hereof may result in material irreparable injury to the Initial
Purchasers or the Holders for which there is no adequate remedy at law, that it
will not be possible to measure damages for such injuries precisely and that, in
the event of any such failure, the Initial Purchasers or any Holder may obtain
such relief as may be required to specifically enforce the Company's and the
Guarantor's obligations under Section 2(a) and Section 2(b) hereof.
8
4. Registration Procedures. In connection with their obligations pursuant
to Section 2(a) and Section 2(b) hereof, the Company and the Guarantor shall as
expeditiously as possible:
(a) prepare and file with the SEC a Registration Statement on the
appropriate form under the Securities Act, which form (i) shall be selected by
the Company and the Guarantor, (ii) shall, in the case of a Shelf Registration,
be available for the sale of the Registrable Securities by the selling Holders
thereof and (iii) shall comply as to form in all material respects with the
requirements of the applicable form and include all financial statements
required under the Securities Act and the rules and regulations of the SEC
thereunder to be filed therewith; and use their best efforts to cause such
Registration Statement to become effective and remain effective for the
applicable period in accordance with Section 2 hereof;
(b) a reasonable time prior to the filing with the SEC of any Registration
Statement, any Prospectus, any amendment to a Registration Statement or
amendment or supplement to a Prospectus or of any document that is to be
incorporated by reference into a Registration Statement or a Prospectus after
initial filing of a Registration Statement, provide copies of such document to
the Initial Purchasers and their counsel (and, in the case of a Shelf
Registration Statement, to the Holders and their counsel) and make such of the
representatives of the Company and the Guarantor as shall be reasonably
requested by the Initial Purchasers or their counsel (and, in the case of a
Shelf Registration Statement, the Holders or their counsel) available for
discussion of such document; and the Company and the Guarantor will not, at any
time after the initial filing with the SEC of a Registration Statement, file
with the SEC any Prospectus, any amendment of or supplement to a Registration
Statement or a Prospectus, or any document that is to be incorporated by
reference into a Registration Statement or a Prospectus, of which the Initial
Purchasers and their counsel (and, in the case of a Shelf Registration
Statement, the Holders and their counsel) shall not have previously been advised
and furnished a copy or to which the Initial Purchasers or their counsel (and,
in the case of a Shelf Registration Statement, the Holders or their counsel)
shall reasonably object;
(c) in the case of a Shelf Registration, furnish to each Holder of
Registrable Securities, to counsel for the Initial Purchasers, to counsel for
such Holders and to each Underwriter of an Underwritten Offering of Registrable
Securities, if any, without charge, as many copies of each Prospectus, including
each preliminary Prospectus, and any amendment or supplement thereto as they may
reasonably request, in order to facilitate the sale or other disposition of the
Registrable Securities thereunder; and the Company and the Guarantor consent to
the use of such Prospectus and any amendment or supplement thereto in accordance
with applicable law by each of the selling Holders and any such Underwriters in
connection with the offering and sale of the Registrable Securities covered by
and in the manner described in such Prospectus or any amendment or supplement
thereto;
9
(d) in the case of a Shelf Registration, furnish to each Holder, without
charge, at least one conformed copy of each Registration Statement and any
post-effective amendment thereto (without any documents incorporated therein by
reference or exhibits thereto, unless requested);
(e) prior to the filing of any document that is to be incorporated by
reference into a Registration Statement or a related Prospectus, provide copies
of such document to the selling Holders and to the Underwriters, if any, make
the Company's representatives available for discussion of such document and
other customary due diligence matters, and include such information in such
document prior to the filing thereof as such selling Holders or Underwriters, if
any, reasonably may request, in each case during the period a Registration
Statement is effective and prospectus delivery requirements with respect to any
offers or sales thereunder are applicable;
(f) prepare and file with the SEC such amendments and post-effective
amendments to each Registration Statement as may be necessary to keep such
Registration Statement effective for the applicable period in accordance with
Section 2 hereof and cause each Prospectus to be supplemented by any required
prospectus supplement and, as so supplemented, to be filed pursuant to Rule 424
under the Securities Act; and keep each Prospectus current during the period
described in Section 4(3) of and Rule 174 under the Securities Act that is
applicable to transactions by brokers or dealers with respect to the Registrable
Securities or Exchange Securities;
(g) upon the occurrence of any event contemplated by Section 4(h)(v)
hereof, use their best efforts to prepare and file with the SEC a supplement or
post-effective amendment to a Registration Statement or the related Prospectus
or any document incorporated therein by reference or file any other required
document so that, as thereafter delivered to purchasers of the Registrable
Securities, such Prospectus will conform in all material respects to the
applicable requirements of the Securities Act and the Trust Indenture Act and
the rules and regulations of the SEC and will not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; and the Company and the Guarantor shall notify the Holders
to suspend the use of the Prospectus as promptly as practicable after the
occurrence of such an event until the Company and the Guarantor have amended or
supplemented the Prospectus to correct such misstatement or omission;
(h) notify each Holder, counsel for such Holders and counsel for the
Initial Purchasers promptly and, if requested by any such Holder or counsel,
confirm such advice in writing (i) when a Registration Statement has become
effective and when any post-effective amendment thereto has been filed and
becomes effective, (ii) of any request by the SEC or any state securities
10
authority for amendments and supplements to a Registration Statement or a
related Prospectus or for additional information after the Registration
Statement has become effective, (iii) of the issuance by the SEC or any state
securities authority of any stop order suspending the effectiveness of a
Registration Statement or the initiation of any proceedings for that purpose,
(iv) if, between the effective date of a Registration Statement and the closing
of any sale of securities covered thereby, the representations and warranties of
the Company or the Guarantor contained in this Agreement, any underwriting
agreement, securities sales agreement or other similar agreement, if any,
relating to an offering of such securities cease to be true and correct or if
the Company or the Guarantor receives any notification with respect to the
suspension of the qualification of such securities for sale in any jurisdiction
or the initiation of any proceeding for such purpose, (v) if at any time when a
Prospectus is required to be delivered under the Securities Act, that such
Registration Statement, Prospectus, Prospectus amendment or supplement or
post-effective amendment does not conform in all material respects to the
applicable requirements of the Securities Act and the Trust Indenture Act and
the rules and regulations of the SEC thereunder or contains an untrue statement
of a material fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein not misleading and (vi) of
any determination by the Company or the Guarantor that a post-effective
amendment to a Registration Statement would be appropriate;
(i) use their best efforts to obtain the withdrawal of any order suspending
the effectiveness of a Registration Statement at the earliest possible moment
and provide immediate notice to each Holder of the withdrawal of any such order;
(j) in the case of a Shelf Registration, use their best efforts to: (A)
register or qualify the Registrable Securities under all applicable state
securities or blue sky laws of such jurisdictions as any Holder of Registrable
Securities covered by a Shelf Registration Statement or any Underwriter shall
reasonably request in writing by the time the applicable Shelf Registration
Statement is declared effective by the SEC; cooperate with the Holders in
connection with any filings required to be made with the NASD (including
retaining any "qualified independent underwriter" that is required to be
retained in accordance with the rules and regulations of the NASD); (B) keep
such registrations or qualifications in effect and comply with such laws so as
to permit the continuance of offers, sales and dealings therein in such
jurisdictions during the period the Shelf Registration Statement is required to
remain effective under Section 2(b) above and for so long as may be necessary to
enable any such Holder or Underwriter to complete its distribution of Securities
pursuant to such Shelf Registration Statement; and (C) do any and all other acts
and things that may be reasonably necessary or advisable to enable each Holder
to complete the disposition in each such jurisdiction of the Registrable
11
Securities owned by such Holder; provided that neither the Company nor the
Guarantor shall be required to (i) qualify as a foreign corporation or other
entity or as a dealer in securities in any such jurisdiction where it would not
otherwise be required to so qualify, (ii) file any general consent to service of
process in any such jurisdiction or (iii) subject itself to taxation in any such
jurisdiction if it is not already so subject;
(k) use their best efforts to obtain the consent or approval of each
governmental agency or authority, whether federal, state or local, which may be
required to effect the Exchange Offer Registration, the Exchange Offer or the
Shelf Registration, as the case may be, or the offering or sale in connection
therewith or to enable the Holders to offer, or to consummate the disposition
of, their Registrable Securities or Participating Broker-Dealers to offer and
sell Exchange Securities;
(l) cause the Indenture to be qualified under the Trust Indenture Act in
connection with the registration of the Exchange Securities or Registrable
Securities, as the case may be; cooperate with the Trustee and the Holders to
effect such changes to the Indenture as may be required for the Indenture to be
so qualified in accordance with the terms of the Trust Indenture Act; and
execute, and use their best efforts to cause the Trustee to execute, all
documents as may be required to effect such changes and all other forms and
documents required to be filed with the SEC to enable the Indenture to be so
qualified in a timely manner;
(m) in the case of a Shelf Registration, make available for inspection by a
representative of the Holders of the Registrable Securities (an "Inspector"),
any Underwriter participating in any disposition pursuant to such Shelf
Registration Statement, and attorneys and accountants designated by the Holders,
at reasonable times and in a reasonable manner, all pertinent financial and
other records, documents and properties of the Company and the Guarantor, and
cause the respective officers, directors and employees of the Company and the
Guarantor to supply all information reasonably requested by any such Inspector,
Underwriter, attorney or accountant in connection with a Shelf Registration
Statement; provided that each such party shall agree to maintain in confidence
and not to disclose to any other person any information or records reasonably
designated by the Company or the Guarantor as being confidential, until such
time as (A) such information becomes a matter of public record (whether by
virtue of its inclusion in such Registration Statement or otherwise), or (B)
such person shall be required so to disclose such information pursuant to a
subpoena or order of any court or arbitrator or governmental or regulatory
authority (subject to the requirements of such order, and only after such person
shall have given the Company prompt prior written notice of such requirement),
or (C) such information is required to be set forth in such Shelf Registration
Statement or the Prospectus included therein or in an amendment to such Shelf
12
Registration Statement or an amendment or supplement to such Prospectus in order
that such Shelf Registration Statement, Prospectus, amendment or supplement, as
the case may be, complies with applicable requirements of the federal securities
laws and the rules and regulations of the SEC and does not contain an untrue
statement of a material fact or omit to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading;
(n) in the case of a Shelf Registration, cooperate with the selling Holders
of Registrable Securities to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold and not bearing any
restrictive legends and enable such Registrable Securities to be issued in such
denominations and registered in such names (consistent with the applicable
provisions of the Indenture) as the selling Holders may reasonably request at
least one Business Day prior to the closing of any sale of Registrable
Securities;
(o) obtain a CUSIP number for all Exchange Securities or Registrable
Securities, as the case may be, not later than the effective date of a
Registration Statement;
(p) comply with all applicable rules and regulations of the SEC, and make
generally available to holders of Securities as soon as practicable but no later
than eighteen months after the effective date of a Registration Statement, an
earnings statement of the Guarantor and its subsidiaries complying with Section
11(a) of the Securities Act (including, at the option of the Guarantor, Rule 158
thereunder).
(q) in the case of a Shelf Registration, use their best efforts to cause
all Registrable Securities to be listed on any securities exchange or any
automated quotation system on which similar securities issued or guaranteed by
the Company or the Guarantor are then listed if requested by the Majority
Holders, to the extent such Registrable Securities satisfy applicable listing
requirements;
(r) in the case of a Shelf Registration, if requested by any Holder of
Registrable Securities covered by a Shelf Registration Statement, promptly
incorporate in a Prospectus supplement or post-effective amendment such
information with respect to such Holder as such Holder reasonably requests to be
included therein; and make all required filings of such Prospectus supplement or
such post-effective amendment promptly after the Company has received
notification of the matters to be incorporated in such filing; and
(s) in the case of a Shelf Registration, enter into such customary
agreements and take all such other actions in connection therewith (including
those requested by the Holders of a majority in principal amount of the
Registrable Securities being sold) in order to expedite or facilitate the
disposition of such Registrable Securities, including, but not limited to,
customary agreements relating to an Underwritten Offering, and in such
connection:
13
(i) to the extent possible, make such representations and warranties
to the Holders and any Underwriters of such Registrable Securities with
respect to the business of the Company and its subsidiaries, the
Registration Statement, Prospectus and documents incorporated by reference
or deemed incorporated by reference, if any, in each case, in form,
substance and scope as are customarily made by issuers to underwriters in
underwritten offerings and confirm the same if and when requested;
(ii) obtain opinions of counsel to the Company and the Guarantors
(which counsel and opinions, in form, scope and substance, shall be
reasonably satisfactory to the Holders and such Underwriters and their
respective counsel) addressed to each selling Holder and Underwriter of
Registrable Securities, covering the matters customarily covered in
opinions requested in underwritten offerings;
(iii) obtain "comfort" letters from the independent certified public
accountants of the Company and the Guarantor (and, if necessary, any other
certified public accountant of any subsidiary of the Company or the
Guarantor, or of any business acquired by the Company or the Guarantor for
which financial statements and financial data are or are required to be
included or incorporated by reference in the Registration Statement)
addressed to each selling Holder and Underwriter of Registrable Securities,
such letters to be in customary form and covering matters of the type
customarily covered in "comfort" letters in connection with underwritten
offerings; and
(iv) deliver such documents and certificates as may be reasonably
requested by the Holders of a majority in principal amount of the
Registrable Securities being sold or the Underwriters, and which are
customarily delivered in underwritten offerings, to evidence the continued
validity of the representations and warranties of the Company and the
Guarantor made pursuant to clause (i) above and to evidence compliance with
any customary conditions contained in an underwriting agreement.
In the case of a Shelf Registration Statement, the Company may require each
Holder to furnish to the Company such information regarding such Holder and the
proposed disposition by such Holder of Registrable Securities as the Company and
the Guarantor may from time to time reasonably request in writing. Each Holder
agrees by acquisition of the Registrable Securities to furnish promptly to the
Company all information required to be disclosed in the Shelf Registration
Statement in order to make the information previously furnished to the Company
by such Holder for that purpose not materially misleading or necessary to cause
the Shelf Registration Statement not to omit a material fact with respect to
such Holder that is necessary in order to make the statements therein with
respect to such Holder not misleading.
14
In the case of a Shelf Registration Statement, each Holder agrees by
acquisition of the Registrable Securities that, upon receipt of any notice from
the Company and the Guarantor of the happening of any event of the kind
described in Section 4(h)(iii) or 4(h)(v) hereof, such Holder will forthwith
discontinue disposition of Registrable Securities pursuant to a Registration
Statement until such Holder's receipt of the copies of the supplemented or
amended Prospectus contemplated by Section 4(g) hereof and, if so directed by
the Company and the Guarantor, such Holder will deliver to the Company and the
Guarantor all copies in its possession, other than permanent file copies then in
such Holder's possession, of the Prospectus covering such Registrable Securities
that is current at the time of receipt of such notice.
If the Company and the Guarantor shall give any such notice to suspend the
disposition of Registrable Securities pursuant to a Registration Statement, the
Company and the Guarantor shall extend the period during which the Registration
Statement shall be maintained effective pursuant to this Agreement by the number
of days during the period from and including the date of the giving of such
notice to and including the date when the Holders shall have received copies of
the supplemented or amended Prospectus necessary to resume such dispositions.
The Company and the Guarantor may give any such notice only twice during any
365-day period and each such suspension shall not extend for a period of more
than 45 days.
5. Underwritten Registrations. (a) Selection of Underwriters. The Holders
of Registrable Securities covered by a Shelf Registration Statement who desire
to do so may sell such Registrable Securities in an Underwritten Offering. In
any such Underwritten Offering, the investment banker or investment bankers and
manager or managers (the "Underwriters") that will administer the offering will
be selected by the Holders of a majority in principal amount of the Registrable
Securities to be included in such offering.
(b) Participation by Holders. No Holder may participate in any Underwritten
Offering hereunder unless such Holder (i) agrees to sell his Registrable
Securities on the basis provided in any underwriting arrangements approved by
the Holders of a majority in principal amount of the Registrable Securities to
be included in such offering and (ii) completes and executes all questionnaires,
powers of attorney, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements.
6. Rule 144. The Company covenants to the Holders that, in the event the
Exchange Offer is not completed within one year of the Closing Date, the Company
shall disseminate the information required to be disseminated by Rule 144(c)
adopted by the SEC under the Securities Act, to the extent such information is
reasonably available for such dissemination, and shall take such further action
as any Holder may reasonably request, all to the extent required from time to
time to enable such Holder to sell Registrable Securities without registration
15
under the Securities Act within the limitations of the exemption provided by
Rule 144 under the Securities Act, as such Rule may be amended from time to
time, or any similar or successor rule or regulation hereafter adopted by the
SEC. Upon the request of any Holder in connection with that Holder's sale
pursuant to Rule 144, the Company shall deliver to such Holder a written
statement as to whether it has complied with such requirements.
7. Participation of Broker-Dealers in Exchange Offer. The Company and the
Guarantor shall indicate in a "Plan of Distribution" section contained in the
Exchange Offer Registration Statement that any broker-dealer who holds
Registrable Securities that it acquired for its own account as a result of
market-making activities or other trading activities (other than Registrable
Securities acquired directly from the Company) (a "Participating Broker-Dealer")
may exchange such Registrable Securities pursuant to the Exchange Offer;
however, a Participating Broker-Dealer may be deemed to be an "underwriter"
within the meaning of the Securities Act and must, therefore, deliver a
prospectus meeting the requirements of the Act in connection with any resales of
the Exchange Securities received by a Participating Broker-Dealer in the
Exchange Offer, which prospectus delivery requirement may be satisfied by the
delivery by a Participating Broker-Dealer of the Prospectus contained in the
Exchange Offer Registration Statement. Such "Plan of Distribution" section shall
also contain all other information with respect to such resales by Participating
Broker-Dealers that the SEC may require in order to permit such resales pursuant
thereto, but such "Plan of Distribution" shall not name any Participating
Broker-Dealer or disclose the amount of Exchange Securities held by any
Participating Broker-Dealer except to the extent required by the SEC. In light
of the above, and notwithstanding the other provisions of this Agreement, the
Company and the Guarantor agree (i) to include in the Exchange Offer
Registration Statement a Prospectus for use in any resales by any Participating
Broker-Dealer and (ii) to keep such Exchange Offer Registration Statement
effective for a period of up to 180 days after the last Exchange Date (as such
period may be extended pursuant to the penultimate paragraph of Section 4 of
this Agreement), if requested by the Initial Purchasers or by one or more
Participating Broker-Dealers. The Company and the Guarantor shall provide
sufficient copies of the latest version of such Prospectus to Participating
Broker-Dealers promptly upon request at any time during such 180 day period in
order to facilitate such resales.
(b) The Initial Purchasers shall have no liability to the Company, the
Guarantor or any Holder with respect to any request that they may make pursuant
to Section 7(a) above, except for any such liability they may have pursuant to
Section 9.
8. Representations and Warranties. The Company and the Guarantor jointly
and severally represent and warrant to, and agree with, each Initial Purchaser
and each of the Holders that:
16
(a) Each Registration Statement and each Prospectus furnished pursuant to
Section 2(a) or Section 2(b) hereof and any further amendments or supplements to
any such Registration Statement or Prospectus, when it becomes effective or is
filed with the SEC, as the case may be, and, in the case of an Underwritten
Offering, at the time of the closing under the underwriting agreement relating
thereto, will conform in all material respects to the requirements of the
Securities Act and the Trust Indenture Act and the rules and regulations of the
SEC thereunder and will not contain 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; and at all times subsequent to the time
that such Registration Statement has become effective under the Securities Act
when a prospectus would be required to be delivered under the Securities Act,
other than from (i) such time as a notice has been given to Holders pursuant to
Section 4(h)(v) hereof until (ii) such time as the Company furnishes an amended
or supplemented prospectus pursuant to Section 4(g) hereof, each such
Registration Statement, and each Prospectus furnished pursuant to Section 2(a)
or Section 2(b) hereof, as then amended or supplemented, will conform in all
material respects to the requirements of the Securities Act and the Trust
Indenture Act and the rules and regulations of the SEC thereunder and will not
contain 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; provided, however, that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Company by a Holder or by any
Underwriter expressly for use therein.
(b) Any documents incorporated by reference in any Prospectus referred to
in Section 8(a) hereof, when they become or became effective or are or were
filed with the SEC, as the case may be, will conform or conformed in all
material respects to the requirements of the Securities Act or the Exchange Act,
as applicable, and none of such documents will contain or contained an untrue
statement of a material fact or will omit or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; provided, however, that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Company by a Holder or by any
Underwriter expressly for use therein.
(c) The compliance by the Company and the Guarantor with all of the
provisions of this Agreement and the consummation of the transactions herein
contemplated will not conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Guarantor or any subsidiary of the Guarantor (including the
Company) pursuant to, any indenture, mortgage, deed of trust, loan agreement or
other material agreement or instrument to which the Guarantor or any subsidiary
of the Guarantor (including the Company) is a party or by which the Guarantor or
any subsidiary of the Guarantor (including the Company) is bound or to which any
of the property or assets of the Guarantor or any subsidiary of the Guarantor
(including the Company) is subject, nor will such action result in any violation
of the provisions of the charter, by-laws or similar organizational documents of
the Guarantor or any subsidiary of the Guarantor (including the Company), or
17
result in the violation of any law or statute or any judgement, order or
regulation of any court or arbitrator or governmental or regulatory authority;
and no consent, approval, authorization, order, registration or qualification of
or with any court or arbitrator or governmental or regulatory authority is
required for the compliance by the Company and the Guarantor with all of the
provisions of this Agreement and the consummation by the Company and the
Guarantor of the transactions contemplated by this Agreement, except for such
consents, approvals, authorizations, orders and registrations or qualifications
as may be required (i) under applicable state securities laws, in connection
with the purchase and resale of the Securities by the Initial Purchasers and
(ii) with respect to the Exchange Securities(including the related guarantee)
under the Securities Act and applicable state securities laws as contemplated by
this Agreement.
(d) This Agreement has been duly authorized, executed and delivered by each
of the Company and the Guarantor.
9. Indemnification and Contribution. (a) Indemnification of the Initial
Purchasers and Holders. The Company and the Guarantor jointly and severally
agree to indemnify and hold harmless each Initial Purchaser and each other
Holder, their respective affiliates and each Person, if any, who controls any
Initial Purchaser or any other Holder within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages and liabilities (including, without limitation,
reasonable legal fees and other expenses incurred in connection with any suit,
action or proceeding or any claim asserted), joint or several, caused by any
untrue statement or alleged untrue statement of a material fact contained in any
Registration Statement or any Prospectus, or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary in order to make the statements therein, not misleading, except
insofar as such losses, claims, damages or liabilities are caused by any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with any information relating to (i) any Initial
Purchaser furnished to the Company and the Guarantor in writing through J.P.
Morgan Securities Inc. expressly for use therein or (ii) any selling Holder
furnished to the Company and the Guarantor in writing by such Holder expressly
for use therein. In connection with any Underwritten Offering permitted by
Section 5, the Company and the Guarantor will also indemnify the Underwriters,
if any, and their respective affiliates and each Person who controls such
Persons (within the meaning of the Securities Act and the Exchange Act) to the
same extent as provided above with respect to the indemnification of the
Holders, if requested in connection with any Registration Statement.
18
(b) Indemnification of the Company and the Guarantor. Each Holder agrees,
severally and not jointly, to indemnify and hold harmless the Company, the
Guarantor, the Initial Purchasers and the other selling Holders, their
respective affiliates, the directors of the Company and the Guarantor, each
officer of the Company and the Guarantor who signed the Registration Statement
and each Person, if any, who controls the Company, the Guarantor, any Initial
Purchaser and any other selling Holder within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same extent as the
indemnity set forth in paragraph (a) above, but only with respect to any losses,
claims, damages or liabilities caused by any untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in conformity
with any information relating to such Holder furnished to the Company in writing
by such Holder expressly for use in any Registration Statement and any
Prospectus.
(c) Notice and Procedures. If any suit, action, proceeding (including any
governmental or regulatory investigation), claim or demand shall be brought or
asserted against any Person in respect of which indemnification may be sought
pursuant to either paragraph (a) or (b) above, such Person (the "Indemnified
Person") shall promptly notify the Person against whom such indemnification may
be sought (the "Indemnifying Person") in writing; provided that the failure to
notify the Indemnifying Person shall not relieve it from any liability that it
may have under this Section 9 except to the extent that it has been materially
prejudiced (through the forfeiture of substantive rights or defenses) by such
failure; and provided, further, that the failure to notify the Indemnifying
Person shall not relieve it from any liability that it may have to an
Indemnified Person otherwise than under this Section 9. If any such proceeding
shall be brought or asserted against an Indemnified Person and it shall have
notified the Indemnifying Person thereof, the Indemnifying Person shall retain
counsel reasonably satisfactory to the Indemnified Person to represent the
Indemnified Person and any others entitled to indemnification pursuant to this
Section 9 that the Indemnifying Person may designate in such proceeding and
shall pay the fees and expenses of such counsel related to such proceeding. In
any such proceeding, any Indemnified Person shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such Indemnified Person unless (i) the Indemnifying Person and the
Indemnified Person shall have mutually agreed to the contrary; (ii) the
Indemnifying Person has failed within a reasonable time to retain counsel
reasonably satisfactory to the Indemnified Person; (iii) the Indemnified Person
shall have reasonably concluded that there may be legal defenses available to it
that are different from or in addition to those available to the Indemnifying
19
Person; or (iv) the named parties in any such proceeding (including any
impleaded parties) include both the Indemnifying Person and the Indemnified
Person and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It is
understood and agreed that the Indemnifying Person shall not, in connection with
any proceeding or related proceeding in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all Indemnified Persons, and that all such fees and expenses shall
be reimbursed as they are incurred. Any such separate firm (x) for any Initial
Purchaser, its affiliates and any control Persons of such Initial Purchaser
shall be designated in writing by J.P. Morgan Securities Inc., (y) for any other
Holder, its affiliates and any control Persons of such Holder shall be
designated in writing by the Majority Holders and (z) in all other cases shall
be designated in writing by the Guarantor. The Indemnifying Person shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the Indemnifying Person agrees to indemnify each Indemnified
Person from and against any loss or liability by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an Indemnified
Person shall have requested that an Indemnifying Person reimburse the
Indemnified Person for fees and expenses of counsel as contemplated by this
paragraph, the Indemnifying Person shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by the Indemnifying Person of such
request and (ii) the Indemnifying Person shall not have reimbursed the
Indemnified Person in accordance with such request prior to the date of such
settlement. No Indemnifying Person shall, without the written consent of the
Indemnified Person, effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Person is or could have been a
party and indemnification could have been sought hereunder by such Indemnified
Person, unless such settlement (A) includes a full and unconditional release of
such Indemnified Person from all liability on claims that are the subject matter
of such proceeding and (B) does not include any statement as to or any admission
of fault, culpability or a failure to act by or on behalf of any Indemnified
Person.
(d) Contribution. If the indemnification provided for in paragraphs (a) and
(b) above is unavailable to an Indemnified Person or insufficient in respect of
any losses, claims, damages or liabilities referred to therein, then each
Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Indemnified Person as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Guarantor from the offering of the
Securities and the Exchange Securities, on the one hand, and by the Holders from
receiving Securities or Exchange Securities registered under the Securities Act,
on the other hand, 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) but also the relative fault
of the Company and the Guarantor on the one hand and the Holders on the other in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
20
considerations. The relative fault of the Company and the Guarantor on the one
hand and the Holders on the other shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company and the Guarantor or by the Holders and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
(e) Limitation on Liability. The Company, the Guarantor and the Holders
agree that it would not be just and equitable if contribution pursuant to this
Section 9 were determined by pro rata allocation (even if the Holders were
treated as one entity for such purpose) or by any other method of allocation
that does not take account of the equitable considerations referred to in
paragraph (d) above. The amount paid or payable by an Indemnified Person as a
result of the losses, claims, damages and liabilities referred to in paragraph
(d) above shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses incurred by such Indemnified Person in
connection with any such action or claim. Notwithstanding the provisions of this
Section 9, in no event shall a Holder be required to contribute any amount in
excess of the amount by which the total price at which the Registrable
Securities or Exchange Securities sold by such Holder exceeds the amount of any
damages that such Holder 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 Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.
(f) Non-Exclusive Remedies. The remedies provided for in this Section 9 are
not exclusive and shall not limit any rights or remedies that may otherwise be
available to any Indemnified Person at law or in equity.
(g) Survival. The indemnity and contribution provisions contained in this
Section 9 shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by or on behalf
of the Initial Purchasers or any other Holder, their respective affiliates or
any Person controlling any Initial Purchaser or any other Holder, or by or on
behalf of the Company or the Guarantor, their respective affiliates or the
officers or directors of or any Person controlling the Company or the Guarantor,
(iii) acceptance of any of the Exchange Securities and (iv) any sale of
Registrable Securities pursuant to a Shelf Registration Statement.
10. General.
(a) No Inconsistent Agreements. The Company and the Guarantor represent,
warrant and agree that (i) the rights granted to the Holders hereunder do not in
any way conflict with and are not inconsistent with the rights granted to the
holders of any other outstanding securities issued or guaranteed by the Company
21
or the Guarantor under any other agreement and (ii) neither the Company nor the
Guarantor has entered into, or on or after the date of this Agreement will enter
into, any agreement that is inconsistent with the rights granted to the Holders
in this Agreement or otherwise conflicts with the provisions hereof.
(b) Amendments and Waivers. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given
unless the Company and the Guarantor have obtained the written consent of
Holders of at least a majority in aggregate principal amount of the outstanding
Registrable Securities affected by such amendment, modification, supplement,
waiver or consent; provided that no amendment, modification, supplement, waiver
or consent to any departure from the provisions of Section 9 hereof shall be
effective as against any Holder unless consented to in writing by such Holder.
(c) Notices. All notices and other communications provided for or permitted
hereunder shall be made in writing by hand-delivery, registered first-class
mail, telex, telecopier or any courier guaranteeing overnight delivery (i) if to
a Holder, at the most current address given by such Holder to the Company by
means of a notice given in accordance with the provisions of this Section 10(c),
which address initially is, with respect to the Initial Purchasers, the address
set forth in Section 14(b) of the Purchase Agreement; and (ii) if to the Company
and the Guarantor, initially at the Guarantor's address set forth in Section
14(b) of the Purchase Agreement and thereafter at such other address, notice of
which is given in accordance with the provisions of this Section 10(c). All such
notices and communications shall be deemed to have been duly given: at the time
delivered by hand, if personally delivered; five Business Days after being
deposited in the mail, postage prepaid, if mailed; when answered back, if
telexed; when receipt is acknowledged, if telecopied; and on the next Business
Day if timely delivered to an air courier guaranteeing overnight delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee, at the
address specified in the Indenture.
(d) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors, assigns and transferees of each of the
parties, including, without limitation and without the need for an express
assignment, subsequent Holders; provided that nothing herein shall be deemed to
permit any assignment, transfer or other disposition of Registrable Securities
in violation of the terms of the Purchase Agreement or the Indenture. If any
transferee of any Holder shall acquire Registrable Securities in any manner,
whether by operation of law or otherwise, such Registrable Securities shall be
held subject to all the terms of this Agreement, and by taking and holding such
22
Registrable Securities such Person shall be conclusively deemed to have agreed
to be bound by and to perform all of the terms and provisions of this Agreement
and such Person shall be entitled to receive the benefits hereof. No Initial
Purchaser (in its capacity as an Initial Purchaser) shall have any liability or
obligation to the Company or the Guarantor with respect to any failure by a
Holder (other than such Initial Purchaser) to comply with, or any breach by any
Holder (other than such Initial Purchaser) of, any of the obligations of such
Holder under this Agreement.
(e) Purchases and Sales of Securities. The Company and the Guarantor shall
not, and shall use their best efforts to cause their affiliates (as defined in
Rule 405 under the Securities Act) not to, purchase and then resell or otherwise
transfer any Registrable Securities.
(f) Third Party Beneficiaries. Each Holder shall be a third party
beneficiary to the agreements made hereunder between the Company and the
Guarantor, on the one hand, and the Initial Purchasers, on the other hand, and
shall have the right to enforce such agreements directly to the extent it deems
such enforcement necessary or advisable to protect its rights or the rights of
other Holders hereunder.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) Governing Law; Jurisdiction; Service of Process. This Agreement shall
be governed by and construed in accordance with the laws of the State of New
York, without regard to any principles of conflicts of laws that would result in
the application of the laws of any other jurisdiction. Each of the Company and
the Guarantor hereby submits to the non-exclusive jurisdiction of the federal
and state courts in the Borough of Manhattan in The City of New York in any suit
or proceeding arising out of or relating to this Agreement or the transactions
contemplated thereby. The Company has appointed CT Corporation System, 111
Eighth Avenue, New York, New York 10011 as its Authorized Agent (the "Authorized
Agent") upon whom process may be served in any suit, action or proceeding
arising out of or relating to this Agreement or the transactions contemplated
thereby that may be instituted in any federal or state court in the Borough of
Manhattan in The City of New York by any Initial Purchaser or any other Holder
or by any Person who controls any Initial Purchaser or any other Holder, and
agrees that service of process upon such agent, and written notice of said
service to the Company by the person serving the same to the address referred to
in Section 10(c), shall be deemed in every respect effective service of process
upon the Company in any such suit or proceeding. The Company further agrees to
take any and all action as may be necessary to maintain such designation and
appointment of such agent in full force and effect for a period of ten years
from the date of this Agreement. If for any reason CT Corporation System shall
23
cease to be available to act as such authorized agent for the Company, the
Company agrees to designate a new agent in the State of New York on the terms
and for the purpose of this Section 10(i) reasonably satisfactory to J.P. Morgan
Securities Inc. Each of the Company and the Guarantor irrevocably and
unconditionally waives, to the fullest extent permitted by law, any objection
that it may have to laying of venue in respect of any action, suit or proceeding
arising out of or in connection with this Agreement or the transactions
contemplated hereby to which it is a party brought in any federal or state court
located in the State of New York and hereby agrees not to plead or claim in any
such court that any such action, suit or proceeding has been brought in an
inconvenient forum. Each of the Company and the Guarantor also waives, to the
fullest extent permitted by law, all right to trial by jury in any claim or
counterclaim (whether based upon contract, tort or otherwise) in any way arising
out of or relating to this Agreement.
(j) Miscellaneous. This Agreement contains the entire agreement between the
parties relating to the subject matter hereof and supersedes all oral statements
and prior writings with respect thereto. Section headings herein are for
convenience only and are not a part of this Agreement. If any term, provision,
covenant or restriction contained in this Agreement is held by a court of
competent jurisdiction to be invalid, void or unenforceable or against public
policy, the remainder of the terms, provisions, covenants and restrictions
contained herein shall remain in full force and effect and shall in no way be
affected, impaired or invalidated. The Company, the Guarantor and the Initial
Purchasers shall endeavor in good faith negotiations to replace any invalid,
void or unenforceable provision with a valid provision the economic effect of
which comes as close as possible to that of the invalid, void or unenforceable
provision.
24
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
SYSCO INTERNATIONAL, CO.
By: /s/ Diane Day Sanders
-----------------------------------------
Diane Day Sanders
Treasurer
SYSCO CORPORATION
By: /s/ Diane Day Sanders
------------------------------------------
Diane Day Sanders
Vice President and Treasurer
Confirmed and accepted as of the date first above written:
J.P. MORGAN SECURITIES INC.
For itself and on behalf of the
several Initial Purchasers
By /s/ Maria Sramek
---------------------------------
Name: Maria Sramek
Title: Vice President
25
1501330