CONFORMED COPY
Bowater Incorporated
(a Delaware corporation)
4,300,000 Depositary Shares
Representing a One-Fourth
Interest in a Share of
7% PRIDES, Series B Convertible Preferred Stock,
par value $1 per share
PURCHASE AGREEMENT
February 1, 1994
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Salomon Brothers Inc
as Representatives of the several Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Dear Sirs:
Bowater Incorporated, a Delaware corporation (the
"Company"), confirms its agreement with you and each of the
other Underwriters named in Schedule A hereto (collectively,
the "Underwriters", which term shall also include any
underwriter substituted as hereinafter provided in
Section 10) for whom you are acting as representatives (the
"Representatives"), with respect to the sale by the Company
and the purchase by the Underwriters, acting severally and
not jointly, of the respective numbers of Depositary Shares
(the "Depositary Shares"), each representing a one-fourth
interest in a share of the Company's 7% PRIDES, Series B
Convertible Preferred Stock, par value $1 per share (the
"Series B Preferred Stock"), which Series B Preferred Stock
is convertible (upon conversion or redemption of the Series
B Preferred Stock) into shares of Common Stock, par value
$1.00 per share, of the Company (including the related
rights (the "Rights") issuable pursuant to the Rights
Agreement dated as of April 22, 1986, as amended, between
the Company and The Bank of New York as successor Rights
Agent to Morgan Guaranty Trust Company of New York (the
"Rights Agreement"), the Rights and the Common Stock being
hereinafter collectively referred to as the "Common Stock",
set forth in said Schedule A and with respect to the grant
by the Company to the Underwriters, acting severally and not
jointly, of the option described in Section 2(b) hereof to
purchase up to 593,616 additional Depositary Shares to cover
over-allotments, in each case except as may otherwise be
provided in the Pricing Agreement, as hereinafter defined.
The aforesaid Depositary Shares (the "Initial Shares") and
all or any part of the 593,616 Depositary Shares subject to
the option described in Section 2(b) hereof (the "Option
Shares") are collectively hereinafter called the "Shares".
The shares of the Series B Preferred Stock are to
be deposited by or on behalf of the several Underwriters
against delivery of Depositary Receipts ("Depositary
Receipts") to be issued under a Deposit Agreement (the
"Deposit Agreement") dated as of February 1, 1994 among the
Company, Trust Company Bank, as Depositary (the
"Depositary"), and the holders from time to time of
Depositary Receipts issued thereunder. The Depositary
Receipts issued upon such deposit or deposits of the shares
of the Series B Preferred Stock will evidence the Initial
Shares and, if the option described in Section 2(b) hereof
is exercised, the Option Shares.
Prior to the purchase and public offering of the
Shares by the several Underwriters, the Company and the
Representatives, acting on behalf of the several
Underwriters, shall enter into an agreement substantially in
the form of Exhibit A hereto (the "Pricing Agreement"). The
Pricing Agreement may take the form of an exchange of any
standard form of written telecommunication between the
Company and the Representatives and shall specify such
applicable information as is indicated in Exhibit A hereto.
The offering of the Shares will be governed by this
Agreement, as supplemented by the Pricing Agreement. From
and after the date of the execution and delivery of the
Pricing Agreement, this Agreement shall be deemed to
incorporate the Pricing Agreement.
The Company has filed with the Securities and
Exchange Commission (the "Commission") a registration
statement on Form S-3 (No. 33-51569) and related preliminary
prospectuses for the registration of the Shares under the
Securities Act of 1933, as amended (the "1933 Act"), has
filed such amendments thereto, if any, and such amended
preliminary prospectuses as may have been required to the
date hereof, and will file such additional amendments
thereto and such amended prospectuses as may hereafter be
required. Such registration statement (as amended, if
applicable) and the prospectus constituting a part thereof
(including in each case all documents, if any, incorporated
or deemed to be incorporated by reference therein and the
information, if any, deemed to be part thereof pursuant to
Rule 430A(b) of the rules and regulations of the Commission
under the 1933 Act (the "1933 Act Regulations")), as from
time to time amended or supplemented pursuant to the 1933
Act, the Securities Exchange Act of 1934, as amended (the
"1934 Act") or otherwise, are hereinafter referred to as the
"Registration Statement" and the "Prospectus", respectively,
except that if any revised prospectus shall be provided to
the Underwriters by the Company for use in connection with
the offering of the Shares that differs from the Prospectus
on file at the Commission at the time the Registration
Statement becomes effective (whether or not such revised
prospectus is required to be filed by the Company pursuant
to Rule 424(b) of the 1933 Act Regulations), the term
"Prospectus" shall refer to such revised prospectus from and
after the time it is first provided to the Underwriters.
All references in this Agreement to financial statements and
schedules and other information that is "contained,"
"included" or "stated" in the Registration Statement or the
Prospectus (and all other references of like import) shall
be deemed to mean and include all such financial statements
and schedules and other information that is or is deemed to
be incorporated by reference in the Registration Statement
or the Prospectus, as the case may be; and all references in
this Agreement to amendments or supplements to the
Registration Statement or the Prospectus shall be deemed to
mean and include the filing of any document under the 1934
Act that is or is deemed to be incorporated by reference in
the Registration Statement or the Prospectus, as the case
may be.
The Company understands that the Underwriters
propose to make a public offering of the Shares as soon as
the Representatives deem advisable after the Registration
Statement becomes effective and the Pricing Agreement has
been executed and delivered. All parties to this Agreement
will exercise good faith in the performance of their
obligations under this Agreement.
SECTION 1. Representations and Warranties.
(a) The Company represents and warrants to each Underwriter
as of the date hereof and as of the date of the Pricing
Agreement (such latter date being hereinafter referred to as
the "Representation Date") as follows:
(i) The Company has been duly incorporated and
each of the Company and each active subsidiary of the
Company is validly existing as a corporation in good
standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to
own, lease and operate its properties and to conduct
its business as described in the Registration Statement
and is duly qualified as a foreign corporation to
transact business and is in good standing in each
jurisdiction in which such qualification is required
and the failure to so qualify would have a material
adverse effect on the business, operations or financial
condition of the Company; all of the issued and
outstanding capital stock of each such subsidiary has
been duly authorized and validly issued, is fully paid
and non-assessable and is owned by the Company,
directly or through subsidiaries, free and clear of any
security interest, mortgage, pledge, lien or
encumbrance (except as disclosed to the contrary in the
Prospectus).
(ii) At the time the Registration Statement
becomes effective, the Registration Statement will
comply in all material respects with the requirements
of the 1933 Act and the 1933 Act Regulations 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. The Prospectus, at the Representation Date
(unless the term "Prospectus" refers to a prospectus
that has been provided to the Underwriters by the
Company for use in connection with the offering of the
Shares that differs from the Prospectus on file at the
Commission at the time the Registration Statement
becomes effective, in which case at the time it is
first provided to the Underwriters for such use) and at
Closing Time referred to in Section 2 hereof, will not
include an untrue statement of a material fact or omit
to state a material fact necessary in order to make the
statements therein, in the light of the circumstances
under which they were made, not misleading; provided,
however, that the representations and warranties in
this subsection shall not apply to statements in or
omissions from the Registration Statement or Prospectus
made in reliance upon and in conformity with
information furnished to the Company in writing by any
Underwriter through the Representatives set forth in
the last paragraph of the cover page, the first
paragraph of page 2, and under the heading
"Underwriting" in the Registration Statement or
Prospectus.
(iii) The documents incorporated or deemed to be
incorporated by reference in the Registration Statement
or the Prospectus, at the time they were filed or
amended, as the case may be, or hereafter are filed
with the Commission, complied or when so filed will
comply, as the case may be, in all material respects
with the requirements of the 1934 Act and the rules and
regulations of the Commission under the 1934 Act (the
"1934 Act Regulations"), and, when read together with
the other information in the Prospectus at the time the
Registration Statement and any amendments thereto
become effective, will not contain an 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.
(iv) Since the respective dates as of which
information is given in the Registration Statement and
the Prospectus, except as otherwise stated therein,
(A) there has been no material adverse change in the
condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company
and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of
business, (B) there have been no transactions entered
into by the Company or any of its subsidiaries, other
than those in the ordinary course of business, that are
material with respect to the Company and its
subsidiaries considered as one enterprise, and
(C) except for regular quarterly dividends, there has
been no dividend or distribution of any kind declared,
paid or made by the Company on any class of its capital
stock.
(v) The Company is in compliance with all of the
provisions of Section 517.075 of the Florida Statutes,
and all rules and regulations promulgated thereunder
relating to issuers doing business in Cuba.
(b) Any certificate signed by any officer of the
Company and delivered to the Representatives or to counsel
for the Underwriters shall be deemed a representation and
warranty by the Company to each Underwriter as to the
matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters;
Closing. (a) On the basis of the representations and
warranties herein contained and subject to the terms and
conditions herein set forth, the Company agrees to sell to
each Underwriter, severally and not jointly, and each
Underwriter, severally and not jointly, agrees to purchase
from the Company, at the price per share set forth in the
Pricing Agreement, the number of Initial Shares set forth in
Schedule A opposite the name of such Underwriter (except as
otherwise provided in the Pricing Agreement), plus any
additional number of Initial Shares which such Underwriter
may become obligated to purchase pursuant to the provisions
of Section 10 hereof. If the Company elects to rely on
Rule 430A, Schedule A may be attached to the Pricing
Agreement.
(1) If the Company has elected not to rely upon
Rule 430A of the 1933 Act Regulations, the initial public
offering price and the purchase price per share to be paid
by the several Underwriters for the Shares have each been
determined and set forth in the Pricing Agreement, dated the
date hereof, and an amendment to the Registration Statement
and the Prospectus will be filed before the Registration
Statement becomes effective.
(2) If the Company has elected to rely upon
Rule 430A of the 1933 Act Regulations, the purchase price
per share to be paid by the several Underwriters for the
Shares shall be an amount equal to the initial public
offering price, less an amount per share to be determined by
agreement between the Representatives and the Company. The
initial public offering price per share of the Shares shall
be a fixed price to be determined by agreement between the
Representatives and the Company. The initial public
offering price and the purchase price, when so determined,
shall be set forth in the Pricing Agreement. In the event
that such prices have not been agreed upon and the Pricing
Agreement has not been executed and delivered by all parties
thereto by the close of business on the fourth business day
following the date of this Agreement, this Agreement shall
terminate forthwith, without liability of any party to any
other party, unless otherwise agreed to by the Company and
the Representatives. For purposes of this Agreement, the
term "business day" means a day on which the New York Stock
Exchange is open for business.
(b) In addition, on the basis of the
representations and warranties herein contained and subject
to the terms and conditions herein set forth, the Company
hereby grants an option to the Underwriters, severally and
not jointly, to purchase up to an additional 593,616
Depositary Shares at the price per share set forth in the
Pricing Agreement. The option hereby granted will expire
30 days after (i) the date the Registration Statement
becomes effective, if the Company has elected not to rely on
Rule 430A under the 1933 Act Regulations, or (ii) the
Representation Date, if the Company has elected to rely upon
Rule 430A under the 1933 Act Regulations, and may be
exercised in whole or in part from time to time only for the
purpose of covering over-allotments that may be made in
connection with the offering and distribution of the Initial
Shares upon notice by the Representatives to the Company
setting forth the number of Option Shares as to which the
several Underwriters are then exercising the option and the
time and date of payment and delivery for such Option
Shares. Any such time and date of delivery (a "Date of
Delivery") shall be determined by the Representatives, but
shall not be later than seven full business days and not
earlier than two full business days after the exercise of
said option, nor in any event prior to Closing Time, as
hereinafter defined, unless otherwise agreed by the
Representatives and the Company. If the option is exercised
as to all or any portion of the Option Shares, each of the
Underwriters, acting severally and not jointly, will
purchase that proportion of the total number of Option
Shares then being purchased that the number of Initial
Shares set forth in Schedule A opposite the name of such
Underwriter bears to the total number of Initial Shares
(except as otherwise provided in the Pricing Agreement),
subject in each case to such adjustments as the
Representatives in their discretion shall make to eliminate
any sales or purchases of fractional shares.
(c) Payment of the purchase price for, and
delivery of certificates for, the Initial Shares shall be
made at the offices of Cravath, Swaine & Moore, New York,
New York, or at such other place as shall be agreed upon by
the Representatives and the Company, at 10:00 A.M. on the
fifth business day (unless postponed in accordance with the
provisions of Section 10) following the date the
Registration Statement becomes effective (or, if the Company
has elected to rely upon Rule 430A of the 1933 Act
Regulations, the fifth business day after execution of the
Pricing Agreement), or such other time not later than ten
business days after such date as shall be agreed upon by the
Representatives and the Company (such time and date of
payment and delivery being herein called "Closing Time").
In addition, in the event that any or all of the Option
Shares are purchased by the Underwriters, payment of the
purchase price for, and delivery of certificates for, such
Option Shares shall be made at the above mentioned offices
of Cravath, Swaine & Moore, or at such other place as shall
be agreed upon by the Representatives and the Company, on
each Date of Delivery as specified in the notice from the
Representatives to the Company. Payment shall be made to
the Company by certified or official bank check or checks
drawn in New York Clearing House funds or similar next day
funds payable to the order of the Company, against delivery
to the Representatives for the respective accounts of the
Underwriters of certificates for the Initial Shares to be
purchased by them. Certificates for the Initial Shares and
the Option Shares, if any, shall be in such denominations
and registered in such names as the Representatives may
request in writing at least three business days before
Closing Time or the Date of Delivery, as the case may be.
It is understood that each Underwriter has authorized the
Representatives, for its account, to accept delivery of,
receipt for, and make payment of the purchase price for, the
Initial Shares that it has agreed to purchase. The
Representatives, individually and not as representatives of
the Underwriters, may (but shall not be obligated to) make
payment of the purchase price for the Initial Shares or the
Option Shares, if any, to be purchased by any Underwriter
whose check has not been received by Closing Time or the
Date of Delivery, as the case may be, but such payment shall
not relieve such Underwriter from its obligations hereunder.
The certificates for the Initial Shares and the Option
Shares, if any, will be made available for examination and
packaging by the Representatives not later than 10:00 A.M.
on the last business day prior to Closing Time or Date of
Delivery, as the case may be.
SECTION 3. Covenants of the Company. The Company
covenants with each Underwriter as follows:
(a) The Company will notify the Representatives
immediately, and confirm the notice in writing, (i) of
the effectiveness of the Registration Statement and any
amendment thereto (including any post-effective
amendment), (ii) of the receipt of any comments from
the Commission, (iii) of any request by the Commission
for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for
additional information, and (iv) of the issuance by the
Commission of any stop order suspending the
effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose. The
Company will make every reasonable effort to prevent
the issuance of any stop order and, if any stop order
is issued, to obtain the lifting thereof at the
earliest possible moment.
(b) The Company will give the Representatives
notice of its intention to file or prepare any
amendment to the Registration Statement (including any
post-effective amendment) or any amendment or
supplement to the Prospectus (including any revised
prospectus that the Company proposes for use by the
Underwriters in connection with the offering of the
Shares which differs from the prospectus on file at the
Commission at the time the Registration Statement
becomes effective, whether or not such revised
prospectus is required to be filed pursuant to Rule
424(b) of the 1933 Act Regulations), whether pursuant
to the 1933 Act, the 1934 Act or otherwise, will
furnish the Representatives with copies of any such
amendment or supplement a reasonable amount of time
prior to such proposed filing or use, as the case may
be, and will not file any such amendment or supplement
or use any such prospectus to which the Representatives
or counsel for the Underwriters shall reasonably
object.
(c) The Company will deliver to the
Representatives as many signed copies of the
Registration Statement as originally filed and of each
amendment thereto (including exhibits filed therewith
or incorporated by reference therein and documents
incorporated or deemed to be incorporated by reference
therein, as requested) as such Representatives may
reasonably request and will also deliver to the
Representatives a conformed copy of the Registration
Statement as originally filed and of each amendment
thereto (without exhibits) for each of the
Underwriters.
(d) The Company will furnish to each Underwriter,
from time to time during the period when the Prospectus
is required to be delivered under the 1933 Act or the
1934 Act, such number of copies of the Prospectus (as
amended or supplemented) as such Underwriter may
reasonably request for the purposes contemplated by the
1933 Act or the 1934 Act or the respective applicable
rules and regulations of the Commission thereunder.
(e) If any event shall occur or condition exist
as a result of which it is necessary to amend or
supplement the Prospectus in order that the Prospectus
will not include an untrue statement of a material fact
or omit to state any material fact necessary in order
to make the statements therein not misleading in the
light of the circumstances existing at the time the
Prospectus is delivered to a purchaser, the Company
will forthwith amend or supplement the Prospectus or
make appropriate filings under the 1934 Act (in form
and substance reasonably satisfactory to counsel for
the Underwriters) so that, as so amended or
supplemented, the Prospectus will not include an untrue
statement of a material fact or omit to state a
material fact necessary in order to make the statements
therein, in the light of the circumstances existing at
the time it is delivered to a purchaser, not
misleading, and the Company will furnish to the
Underwriters a reasonable number of copies of such
amendment or supplement or 1934 Act filing.
(f) The Company will endeavor, in cooperation
with the Underwriters, to qualify the Shares and the
shares of Common Stock issuable upon conversion or
redemption of the Series B Preferred Stock for offering
and sale under the applicable securities laws of such
states and other jurisdictions of the United States as
the Representatives may reasonably designate. In each
jurisdiction in which the Shares and the shares of
Common Stock issuable upon conversion or redemption of
the Series B Preferred Stock have been so qualified,
the Company, acting on advice of counsel, will file
such statements and reports as may be required by the
laws of such jurisdiction to continue such
qualification in effect for a period of not less than
one year from the effective date of the Registration
Statement.
(g) The Company will make generally available to
its security holders as soon as practicable, but not
later than 90 days after the close of the period
covered thereby, an earnings statement (which need not
be audited, but which shall be in form complying with
the provisions of Rule 158 of the 1933 Act Regulations)
covering a twelve month period beginning not later than
the first day of the Company's fiscal quarter next
following the "effective date" (as defined in said Rule
158) of the Registration Statement.
(h) If, at the time that the Registration
Statement becomes effective, any information shall have
been omitted therefrom in reliance upon Rule 430A of
the 1933 Act Regulations, then immediately following
the execution of the Pricing Agreement, the Company
will prepare, and file or transmit for filing with the
Commission in accordance with such Rule 430A and Rule
424(b) of the 1933 Act Regulations, copies of the
amended Prospectus, or, if required by such Rule 430A,
a post-effective amendment to the Registration
Statement (including amended Prospectuses), containing
all information so omitted.
(i) The Company, during the period when the
Prospectus is required to be delivered under the 1933
Act or the 1934 Act, will file all documents required
to be filed with the Commission pursuant to Sections
13, 14 or 15 of the 1934 Act within the time periods
required by the 1934 Act and the 1934 Act Regulations.
(j) The Company will use the net proceeds
received by it from the sale of the Shares in the
manner specified in the Prospectus under "Use of
Proceeds" in all material respects.
(k) The Company will not prior to the expiration
of 90 days after the date of the Pricing Agreement,
sell, offer to sell, grant any option for the sale of
or otherwise dispose of any other shares of capital
stock or securities convertible into or exchangeable
for capital stock (other than (i) the Shares including
the shares of Common Stock issuable upon conversion or
redemption of Series B Preferred Stock, (ii) the 8.40%
Series C Cumulative Preferred Stock, being offered at
approximately the same time as the Series B Preferred
Stock, (iii) the Junior Participating Preferred Stock,
Series A, and any shares of Common Stock pursuant to
the Company's Rights Plan, and (iv) the shares of
Common Stock or options for shares of Common Stock
issued pursuant to or sold in connection with the
Company's qualified employee benefit, dividend
reinvestment, and stock option and stock purchase plans
and shares of Common Stock issuable upon the conversion
of securities or the exercise of stock options or
warrants outstanding as of the date hereof) either
directly or indirectly, without prior written consent
of the Representatives.
(l) The Company will use its best efforts to
effect the listing of the Shares and the shares of
Common Stock issuable upon conversion or redemption of
the Series B Preferred Stock on the New York Stock
Exchange.
SECTION 4. Payment of Expenses. The Company will
pay all expenses incident to the performance of its
obligations under this Agreement, including (i) the printing
and filing of the Registration Statement as originally filed
and of each amendment thereto, (ii) the reproduction and
distribution of this Agreement and the Pricing Agreement,
(iii) the preparation, issuance and delivery of the
certificates for the Shares to the Underwriters, (iv) the
fees and disbursements of the Company's counsel and
accountants, (v) the qualification of the Shares and the
shares of Common Stock issuable upon conversion or
redemption of the Series B Preferred Stock under securities
laws in accordance with the provisions of Section 3(f)
hereof, including filing fees and the reasonable fees and
disbursements of counsel for the Underwriters in connection
therewith and in connection with the preparation of the Blue
Sky Survey, (vi) the printing and delivery to the
Underwriters of copies of the Registration Statement as
originally filed and of each amendment thereto, of each
preliminary prospectus, and of the Prospectus and any
amendments or supplements thereto, (vii) the reproduction
and delivery to the Underwriters of copies of the Blue Sky
Survey, and (viii) the fees and expenses incurred in
connection with the listing of the Shares and the shares of
Common Stock issuable upon conversion or redemption of the
Series B Preferred Stock on the New York Stock Exchange.
If this Agreement is terminated by the
Representatives in accordance with the provisions of
Section 5 or Section 9(a)(i), the Company shall reimburse
the Underwriters for all of their reasonable out-of-pocket
expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
SECTION 5. Conditions of Underwriters'
Obligations. The obligations of the several Underwriters
hereunder are subject to the accuracy of the representations
and warranties of the Company herein contained, to the
performance by the Company of its obligations hereunder, and
to the following further conditions:
(a) The Registration Statement shall have become
effective not later than 5:30 P.M. on the date hereof,
or with the consent of the Representatives at a later
time and date, not later, however, than 5:30 P.M. on
the first business day following the date hereof, or at
such later time and date as may be approved by a
majority in interest of the Underwriters; and at
Closing Time no stop order suspending the effectiveness
of the Registration Statement shall have been issued
under the 1933 Act or proceedings therefor initiated or
threatened by the Commission. If the Company has
elected to rely upon Rule 430A of the 1933 Act
Regulations, the price of the Shares and any price-
related information previously omitted from the
effective Registration Statement pursuant to such Rule
430A shall have been transmitted to the Commission for
filing pursuant to Rule 424(b) of the 1933 Act
Regulations within the prescribed time period, and
prior to Closing Time the Company shall have provided
evidence satisfactory to the Representatives of such
timely filing, or a post-effective amendment providing
such information shall have been promptly filed and
declared effective in accordance with the requirements
of Rule 430A of the 1933 Act Regulations.
(b) At Closing Time the Representatives shall
have received:
(1) the favorable opinion, dated as of
Closing Time of Wendy C. Shiba, Esq., Secretary
and Assistant General Counsel for the Company, in
form and substance satisfactory to counsel for the
Underwriters, to the effect that:
(i) the Company has been duly organized
and is validly existing and in good standing
under the laws of the State of Delaware with
corporate power and authority to own, lease
and operate its properties and conduct its
business as described in the Prospectus;
(ii) to the best of her knowledge and
information, the Company is duly qualified as
a foreign corporation to transact business
and is in good standing in each jurisdiction
in which such qualification is required and
the failure to so qualify would have a
material adverse effect on the business,
operations or financial condition of the
Company taken as a whole;
(iii) the authorized, issued and
outstanding capital stock of the Company is
in all material respects as set forth in the
Prospectus (except for subsequent issuances,
if any, pursuant to reservations, agreements,
employee benefit plans or the exercise of
convertible securities referred to in the
Prospectus); the Shares have been duly and
validly authorized, and, when issued and
delivered to and paid for by the Underwriters
pursuant to this Agreement, will be duly
issued by the Company and will be fully paid
and non-assessable; the Series B Preferred
Stock, Depositary Shares and Depositary
Receipts conform to the description thereof
contained in the Prospectus; the Series B
Preferred Stock is convertible into shares of
Common Stock upon conversion or redemption of
the Series B Preferred Stock in accordance
with the terms of the Series B Preferred
Stock; the shares of Common Stock initially
issuable upon conversion or redemption of the
Series B Preferred Stock have been duly and
validly authorized and reserved for issuance
upon such conversion or redemption, and, when
issued upon such conversion or redemption,
will be validly issued, fully paid and non-
assessable; such Common Stock conforms in all
material respects to the description thereof
contained in the Prospectus; the Depositary
Shares and the shares of Common Stock
issuable upon conversion or redemption of the
Series B Preferred Stock have been duly
authorized for listing, subject to official
notice of issuance and, in the case of the
Depositary Shares, evidence of satisfactory
distribution, on the New York Stock Exchange;
and the certificates for the Shares are in
valid and sufficient form under Delaware law;
(iv) the issuance of the Shares is not
subject to preemptive or other similar rights
arising by operation of law, under the
Restated Certificate of Incorporation or by-
laws of the Company or, to the best of her
knowledge and information, otherwise;
(v) the Deposit Agreement has been duly
authorized, executed and delivered by the
Company, and, assuming due authorization,
execution and delivery thereof by the
Depositary, constitutes a legal, valid and
binding instrument enforceable against the
Company in accordance with its terms
(subject, as to enforcement of remedies, to
applicable bankruptcy, reorganization,
insolvency, fraudulent transfer, moratorium
or other laws affecting creditors' rights
generally from time to time in effect and to
general principles of equity); assuming
payment of the purchase price by the
Underwriters, each Depositary Share
represents a one-fourth interest in a validly
issued, outstanding, fully paid and
nonassessable share of Series B Preferred
Stock; and the Depositary Receipts, when duly
executed and delivered in accordance with the
provisions of the Deposit Agreement will
evidence the Depositary Shares and will
entitle the holders thereof to the benefits
provided therein and in the Deposit
Agreement;
(vi) the Registration Statement has
become effective under the 1933 Act and to
the best of her knowledge no stop order
suspending the effectiveness of the
Registration Statement has been issued and no
proceeding for that purpose has been
instituted or threatened under the 1933 Act;
(vii) the Registration Statement and the
Prospectus, and any amendment or supplement
thereto, comply as to form in all material
respects with the requirements of the 1933
Act and the 1933 Act Regulations;
(viii) to the best of her knowledge there
is no pending or threatened, suit or
proceeding before any court or governmental
agency, authority or body or any arbitrator
against or involving the Company or any of
its subsidiaries, of a character required to
be disclosed in the Registration Statement
that is not adequately disclosed in the
Prospectus;
(ix) to the best of her knowledge and
information, there are no material contracts,
indentures or other instruments required to
be described or referred to in the
Registration Statement or to be filed as
exhibits thereto other than those described
or referred to therein or filed or
incorporated by reference as exhibits
thereto, and the descriptions thereof or
references thereto are correct in all
material respects;
(x) this Agreement and the Pricing
Agreement have been duly authorized, executed
and delivered by the Company; the performance
of this Agreement or the Pricing Agreement
and the consummation of the transactions
herein contemplated and the issuance and sale
of the Shares and the shares of Common Stock
issuable upon conversion or redemption of the
Series B Preferred Stock, will not result in
a breach or violation of any of the terms and
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 Company or any of
its active subsidiaries pursuant to, any
material contract, indenture, or other
instrument to which the Company or any of its
active subsidiaries is a party or by which it
is bound or to which any of the property of
the Company or any of its active subsidiaries
is subject, the Company's Restated
Certificate of Incorporation or by-laws, or
any order, rule or regulation known to such
counsel of any court or governmental agency
or body having jurisdiction over the Company
or any of its properties; and no consent,
approval, authorization or order of, or
filing with any court or governmental agency
or body is required for the consummation of
the transactions contemplated by this
Agreement or the Pricing Agreement, except
such as have been obtained under the 1933 Act
and such as may be required under state
securities laws in connection with the
purchase and distribution of such Shares by
the Underwriters; provided that no opinion is
called for with respect to any such consent,
approval, authorization or order required to
be obtained by any Underwriters.
In rendering such opinion, such counsel may
rely on the opinion of Richards, Layton & Finger
described in Section 5(b)(4) below as to the
matters of Delaware law covered thereby.
(2) The favorable opinion, dated as of
Closing Time, of Cravath, Swaine & Moore, counsel
for the Underwriters, with respect to the issuance
and sale of the Shares, the Registration
Statement, the Prospectus and other related
matters as the Representatives may reasonably
require.
(3) In giving their opinions required by
subsections (b)(1) and (b)(2), respectively, of
this Section, Wendy C. Shiba, Esq. and Cravath,
Swaine & Moore shall each additionally state that
nothing has come to their attention that would
lead them to believe that the Registration
Statement (except for financial statements and
schedules and other financial or statistical data
included or incorporated by reference therein, as
to which counsel need make no statement), at the
time it became effective or at the Representation
Date, contained an untrue statement of a material
fact or omitted to state a material fact required
to be stated therein or necessary to make the
statements therein not misleading or that the
Prospectus (except for financial statements and
schedules and other financial or statistical data
included or incorporated by reference therein, as
to which counsel need make no statement), at the
Representation Date (unless the term "Prospectus"
refers to a prospectus which has been provided to
the Underwriters by the Company for use in
connection with the offering of the Shares which
differs from the Prospectus on file at the
Commission at the time the Registration Statement
becomes effective, in which case at the time it is
first provided to the Underwriters for such use)
or at Closing Time, included or includes 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.
(4) The favorable opinion, dated as of or
prior to Closing Time of Richards, Layton &
Finger, special Delaware counsel for the Company,
in form and substance satisfactory to counsel for
the Underwriters, to the effect that the issuance
and sale of the Series B Preferred Stock and the
Depositary Shares (i) will not result in a breach
or violation of the Company's Restated Certificate
of Incorporation, the Certificate of Designations
of the LIBOR Preferred Stock, Series A or the
Certificate of Designation, Preferences and Rights
of the Junior Participating Preferred Stock,
Series A and (ii) will not require the consent or
approval of the holders of the LIBOR Preferred
Stock, Series A.
(5) The opinion, dated as of Closing Time of
John C. Hollister, Esq., counsel for the
Depositary, to the effect that:
(i) The Deposit Agreement has been duly
authorized, executed and delivered by the
Depositary and is a valid and binding
agreement of the Depositary; and
(ii) The Depositary Receipts have been
duly executed and delivered by the Depositary
in accordance with the provisions of the
Deposit Agreement.
(c) At Closing Time, there shall not have been,
since the date hereof or since the respective dates as
of which information is given in the Registration
Statement and the Prospectus, any material adverse
change in the condition, financial or otherwise, or in
the earnings, business affairs or business prospects of
the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary
course of business, and the Representatives shall have
received a certificate of the Company signed by a Vice
President or other officer and the principal financial
or principal accounting officer or treasurer of the
Company, dated as of Closing Time, to the effect that
the signers of such certificate have carefully examined
the Registration Statement, the Prospectus, any
supplement to the Prospectus and this Agreement and
that (i) there has been no such material adverse
change, (ii) the representations and warranties in
Section 1 are true and correct with the same force and
effect as though expressly made at and as of Closing
Time, (iii) the Company has complied with all
agreements and satisfied all conditions on its part to
be performed or satisfied under this Agreement at or
prior to Closing Time, and (iv) to the best knowledge
of the Company, no stop order suspending the
effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been
initiated or threatened by the Commission.
(d) At the time of the execution of this
Agreement, the Representatives shall have received from
KPMG Peat Marwick a letter dated such date, in form and
substance satisfactory to the Representatives,
confirming that they are independent accountants within
the meaning of the 1933 Act and the 1934 Act and the
respective applicable published rules and regulations
thereunder and stating in effect that:
(i) in their opinion the audited consolidated
financial statements and financial statement
schedules included or incorporated in the
Registration Statement and the Prospectus and
reported on by them comply as to form in all
material respects with the applicable accounting
requirements of the 1933 Act and the 1934 Act and
the related published rules and regulations;
(ii) on the basis of a reading of the latest
unaudited consolidated financial statements made
available by the Company; carrying out certain
specified procedures (but not an audit in
accordance with generally accepted auditing
standards) which would not necessarily reveal
matters of significance with respect to the
comments set forth in such letter; a reading of
the minutes of the meetings of the stockholders,
directors and the executive and audit committees
of the Company and the subsidiaries; and inquiries
of certain officials of the company who have
responsibility for financial and accounting
matters of the Company and its subsidiaries as to
transactions and events subsequent to December 31,
1992, nothing came to their attention which caused
them to believe that:
(1) the amounts in the unaudited
"Selected Financial and Operating Data", if
any, included in the Registration Statement
and the Prospectus do not agree with the
corresponding amounts in the audited
consolidated financial statements, unaudited
consolidated financial statements or analyses
prepared by the Company from which such
amounts were derived; or
(2) any unaudited consolidated financial
statements included or incorporated in the
Registration Statement and the Prospectus do
not comply as to form in all material
respects with applicable accounting
requirements and with the published rules and
regulations of the Commission with respect to
financial statements included or incorporated
in quarterly reports on Form 10-Q under the
1934 Act; and said unaudited consolidated
financial statements are not in conformity
with generally accepted accounting principles
applied on a basis substantially consistent
with that of the audited consolidated
financial statements included or incorporated
in the Registration Statement and the
Prospectus; or
(3) with respect to the period from the
date of the most recent consolidated
financial statements (other than any capsule
information), audited or unaudited, included
or incorporated in the Registration Statement
and the Prospectus to the date of the most
recent unaudited consolidated financial
statements prepared by the Company, there
were any changes in the consolidated long-
term debt of the Company or capital stock of
the Company or decreases in the consolidated
stockholders' equity of the Company as
compared with the amounts shown on the most
recent consolidated balance sheet included or
incorporated in the Registration Statement
and the Prospectus, or for the period from
the date of the most recent consolidated
financial statements included or incorporated
in the Registration Statement and the
Prospectus to such date there were any
decreases, as compared with the corresponding
period in the preceding year, in consolidated
income before income taxes or in total or per
share amounts of consolidated net income of
the Company, except in all instances for
changes or decreases set forth in such
letter, in which case the letter shall be
accompanied by an explanation by the Company
as to the significance thereof unless said
explanation is not deemed necessary by the
Representatives; or
(4) based solely upon discussions with
management of the Company, and subject to
such further limitations as may be required
in the circumstances, (A) with respect to the
period subsequent to the date of the most
recent unaudited consolidated financial
statements prepared by the Company, there
were any changes, at a specified date not
more than five business days prior to the
date of the letter, in the consolidated long-
term debt of the Company or capital stock of
the Company or decreases in the consolidated
stockholders' equity of the Company as
compared with the amounts shown on the most
recent consolidated balance sheet included or
incorporated in the Registration Statement
and Prospectus, or (B) for the period from
the date of the most recent consolidated
financial statements included or incorporated
in the Registration Statement and the
Prospectus to such specified date there were
any decreases, as compared with the
corresponding period in the previous year, in
consolidated income before income taxes or in
total or per share amounts of consolidated
net income of the Company, except in all
instances for changes or decreases set forth
in such letter, in which case the letter
shall be accompanied by an explanation by the
Company as to the significance thereof unless
said explanation is not deemed necessary by
the Representatives; or
(5) the amounts included in any
unaudited "capsule" information included or
incorporated in the Registration Statement
and the Prospectus do not agree with the
amounts set forth in the unaudited
consolidated financial statements for the
same periods or were not determined on a
basis substantially consistent with that of
the corresponding amounts in the audited
consolidated financial statements included or
incorporated in the Registration Statement
and the Prospectus;
(iii) they have performed certain other
specified procedures as a result of which they
determined that certain information of an
accounting, financial or statistical nature (which
is limited to accounting, financial or statistical
information derived from the general accounting
records of the Company and its subsidiaries) set
forth in the Registration Statement and the
Prospectus and in Exhibit 12.1 to the Registration
Statement, including the information set forth
under the captions "Capitalization", "Market Price
on Common Stock", "Selected Financial and
Operating Data", "Recent Developments" and
"Management's Discussion and Analysis of Financial
Condition and Results of Operations" in the
Registration Statement and the Prospectus, the
information included or incorporated in Items 1,
6, 7 and 11 of the Company's Annual Report on Form
10-K, incorporated in the Registration Statement
and the Prospectus and the information included in
the "Management's Discussion and Analysis of
Financial Condition and Results of Operations"
included or incorporated in the Company's
Quarterly Reports on Form 10-Q, incorporated in
the Registration Statement and the Prospectus (if
any), agrees with the accounting records of the
Company and its subsidiaries, excluding any
questions of legal interpretation.
References to the Prospectus in this paragraph (d)
include any supplement thereto at the date of the letter.
(e) At Closing Time, the Representatives shall
have received from KPMG Peat Marwick a letter, dated as
of Closing Time, to the effect that they reaffirm the
statements made in the letter furnished pursuant to
subsection (d) of this Section, except that the
specified date referred to shall be a date not more
than five days prior to Closing Time, and, if the
Company has elected to rely on Rule 430A of the 1933
Act Regulations, to the further effect that they have
carried out procedures as specified in clauses (ii) and
(iii) of subsection (d) of this Section with respect to
certain amounts, percentages and financial information
deemed to be a part of the Registration Statement
pursuant to Rule 430A(b).
(f) At Closing Time, the Shares and the shares of
Common Stock issuable upon conversion or redemption of
the Series B Preferred Stock shall have been approved
for listing on the New York Stock Exchange upon notice
of issuance.
(g) At Closing Time and at each Date of Delivery,
if any, counsel for the Underwriters shall have been
furnished with such documents and opinions as they may
reasonably require for the purpose of enabling them to
pass upon the issuance and sale of the Shares and the
shares of Common Stock issuable upon conversion or
redemption of the Series B Preferred Stock as
contemplated in this Agreement, the Pricing Agreement
and related proceedings, or in order to evidence the
accuracy of any of the representations or warranties,
or the fulfillment of any of the agreements or
conditions herein contained; and all proceedings taken
by the Company in connection with the issuance and sale
of the Shares as herein contemplated shall be
satisfactory in form and substance to the
Representatives and counsel for the Underwriters.
(h) At Closing Time, the Company shall have
furnished to the Representatives a letter from
Anthony P. Gammie, Donald J. D'Antuono and Richard D.
McDonough addressed to the Representatives, in which
each such person agrees not to offer, sell or contract
to sell, or otherwise dispose of, directly or
indirectly, or announce an offering of, any shares of
Common Stock beneficially owned by such person or any
securities convertible into, or exchangeable for,
shares of Common Stock for a period of 90 days
following the Closing Time without the prior written
consent of the Representatives, other than shares of
Common Stock disposed of as bona fide gifts.
(i) Subsequent to the time of the execution of
this Agreement, there shall not have been any decrease
in the rating of any of the Company's debt or equity
securities by any "nationally recognized statistical
rating organization" (as defined for purposes of
Rule 436(g) under the 1933 Act) or any notice given by
such organization of any intended or potential decrease
in any such rating or of a possible change in any such
rating that does not indicate the direction of the
possible change.
(j) In the event the Underwriters exercise their
option provided in Section 2(b) hereof to purchase all
or any portion of the Option Shares, the
representations and warranties of the Company contained
herein and the statements in any certificates furnished
by the Company hereunder shall be true and correct as
of each Date of Delivery, and the Underwriters shall
have received:
(1) A certificate, dated such Date of
Delivery, of the Company by a Vice President or
other officer and the principal financial or
principal accounting officer or treasurer, in
their capacities as such, confirming that the
certificate delivered at Closing Time pursuant to
Section 5(c) hereof remains true and correct as of
such Date of Delivery.
(2) The favorable opinion of Wendy C. Shiba,
Esq., in form and substance reasonably
satisfactory to counsel for the Underwriters,
dated such Date of Delivery, relating to the
Option Shares and otherwise to the same effect as
the opinions required by Section 5(b)(1) hereof.
(3) The favorable opinion of Cravath, Swaine
& Moore, counsel for the Underwriters, dated such
Date of Delivery, relating to the Option Shares
and otherwise to the same effect as the opinion
required by Section 5(b)(2) hereof.
(4) The opinion of John C. Hollister, Esq.,
counsel to the Depositary, dated such Date of
Delivery, to the same effect as the opinion
required by Section 5(b)(5) hereof.
(5) A letter from KPMG Peat Marwick, in form
and substance satisfactory to the Representatives
and dated such Date of Delivery, substantially the
same in scope and substance as the letter
furnished to the Representatives pursuant to
Section 5(e) hereof, except that the "specified
date" in the letter furnished pursuant to this
Section 5(j)(5) shall be a date not more than five
days prior to such Date of Delivery.
If any condition specified in this Section shall
not have been fulfilled when and as required to be
fulfilled, this Agreement may be terminated by the
Representatives by notice to the Company at any time at or
prior to Closing Time, and such termination shall be without
liability of any party to any other party except as provided
in Section 4, and provided further that Sections 6, 7 and 13
hereof shall survive such termination.
SECTION 6. Indemnification. (a) The Company
agrees to indemnify and hold harmless each Underwriter and
each person, if any, who controls any Underwriter within the
meaning of Section 15 of the 1933 Act as follows:
(i) against any and all loss, liability, claim,
damage and reasonable expense whatsoever, as incurred,
arising out of any untrue statement or alleged untrue
statement of a material fact contained in the
Registration Statement (or any amendment thereto)
including the information deemed to be part of the
Registration Statement pursuant to Rule 430A(b) of the
1933 Act Regulations, if applicable, or the omission or
alleged omission therefrom of a material fact required
to be stated therein or necessary to make the
statements therein not misleading or arising out of any
untrue statement or alleged untrue statement of a
material fact contained in the Prospectus (or any
amendment or supplement thereto) or the omission or
alleged omission therefrom of a material fact necessary
in order to make the statements therein, in the light
of the circumstances under which they were made, not
misleading;
(ii) against any and all loss, liability, claim,
damage and reasonable expense whatsoever, as incurred,
to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or
proceeding by any governmental agency or body,
commenced or threatened, or of any claim whatsoever
based upon any such untrue statement or omission, or
any such alleged untrue statement or omission, if such
settlement is effected with the written consent of the
Company; and
(iii) against any and all expense whatsoever, as
incurred (including, subject to Section 6(c) hereof,
the reasonable fees and disbursements of counsel chosen
by the Representatives, if applicable thereunder) that
is reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation
or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based
upon any such untrue statement or omission, or any such
alleged untrue statement or omission, to the extent
that any such expense is not paid under (i) or (ii)
above;
provided, however, that this indemnity agreement shall not
apply to any loss, liability, claim, damage or expense to
the extent arising out of any untrue statement or omission
or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to
the Company by any Underwriter through the Representatives
expressly for use in the Registration Statement (or any
amendment thereto) or the Prospectus (or any amendment or
supplement thereto); and provided further, that the
foregoing indemnification with respect to any preliminary
prospectus shall not inure to the benefit of the
Underwriters, or any person controlling the Underwriters,
with respect to losses, claims, liabilities or damages
asserted by any person who purchased Shares from the
Underwriters, if a copy of the Prospectus (as then amended
or supplemented if the Company shall have furnished any
amendments or supplements thereto) was not sent or given by
or on behalf of the Underwriters to such person, if required
by law so to have been delivered, at or prior to the written
confirmation of the sale of such Shares to such person, and
if the Prospectus (as so amended or supplemented) would have
cured the defect giving rise to such loss, claim, damage or
liability.
(b) Each Underwriter agrees, severally and not
jointly, to indemnify and hold harmless the Company, its
directors, each of its officers who signed the Registration
Statement, and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act, against
any and all loss, liability, claim, damage and reasonable
expense described in the indemnity contained in
subsection (a) of this Section, as incurred, but only with
respect to untrue statements or omissions, or alleged untrue
statements or omissions, made in the Registration Statement
(or any amendment thereto) or the Prospectus (or any
amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company
by such Underwriter through the Representatives expressly
for use in the Registration Statement (or any amendment
thereto) or the Prospectus (or any amendment or supplement
thereto). The Company acknowledges that the statements set
forth in the last paragraph of the cover page, the first
paragraph of page 2, and under the heading "Underwriting" in
the Registration Statement (or any amendment thereto) or the
Prospectus (or any amendment or supplement thereto)
constitute the only information furnished in writing by or
on behalf of the several Underwriters for use in the
Registration Statement (or any amendment thereto) or the
Prospectus (or any amendment or supplement thereto).
(c) Each indemnified party shall give notice as
promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure so to notify
an indemnifying party shall not relieve such indemnifying
party from any liability which it may have otherwise than on
account of this indemnity agreement. An indemnifying party
may participate at its own expense in the defense of any
such action. If it so elects within a reasonable time after
receipt of such notice, an indemnifying party, jointly with
any other indemnifying parties receiving such notice, may
assume the defense of such action with counsel chosen by it
and approved by the indemnified parties defendant in such
action, which approval shall not be unreasonably withheld,
unless such indemnified parties object to such assumption on
the ground that there may be legal defenses available to
them which are different from or in addition to those
available to such indemnifying party. If an indemnifying
party assumes the defense of such action, the indemnifying
parties shall not be liable for any fees and expenses of
counsel for the indemnified parties incurred thereafter in
connection with such action. In no event shall the
indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate
from their own counsel for all indemnified parties in
connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the
same general allegations or circumstances.
SECTION 7. Contribution. In order to provide for
just and equitable contribution in circumstances in which
the indemnity agreement provided for in Section 6 is for any
reason held to be unenforceable by the indemnified parties
although applicable in accordance with its terms, the
Company and the Underwriters shall contribute to the
aggregate losses, liabilities, claims, damages and expenses
of the nature contemplated by said indemnity agreement
incurred by the Company and one or more of the Underwriters,
as incurred, in such proportions that the Underwriters are
responsible for that portion represented by the percentage
that the underwriting discount appearing on the cover page
of the Prospectus bears to the initial public offering price
appearing thereon and the Company is responsible for the
balance; provided, however, that no person guilty of
fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to
contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section,
each person, if any, who controls a Underwriter within the
meaning of Section 15 of the 1933 Act shall have the same
rights to contribution as such Underwriter, and each
director of the Company, each officer of the Company who
signed the Registration Statement, and each person, if any,
who controls the Company within the meaning of Section 15 of
the 1933 Act shall have the same rights to contribution as
the Company.
SECTION 8. Representations, Warranties and
Agreements to Survive Delivery. All representations,
warranties and agreements contained in this Agreement and
the Pricing Agreement, or contained in certificates of
officers of the Company submitted pursuant hereto, shall
remain operative and in full force and effect, regardless of
any investigation made by or on behalf of any Underwriter or
controlling person, or by or on behalf of the Company, and
shall survive delivery of the Shares to the Underwriters.
SECTION 9. Termination of Agreement. (a) The
Representatives may terminate this Agreement, by notice to
the Company, at any time at or prior to Closing Time (i) if
there has been, since the date of this Agreement or since
the respective dates as of which information is given in the
Registration Statement, any material adverse change in the
condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise, whether or
not arising in the ordinary course of business, or (ii) if
there has occurred any material adverse change in the
financial markets in the United States or any outbreak or
escalation of hostilities or other national or international
calamity or crisis, the effect of which is such as to make
it, in the judgment of the Representatives, impracticable or
inadvisable to market the Shares or to enforce contracts for
the sale of the Shares, or (iii) if trading in the Common
Stock has been suspended by the Commission or the New York
Stock Exchange, or if trading generally on the New York
Stock Exchange has been suspended, or minimum or maximum
prices for trading have been fixed, or maximum ranges for
prices for securities have been required, by said Exchange
or by order of the Commission or any other governmental
authority, or (iv) if a banking moratorium has been declared
by either federal or New York State authorities.
(b) If this Agreement is terminated pursuant to
this Section, such termination shall be without liability of
any party to any other party except as provided in
Section 4, and provided further that Sections 6, 7 and 13
hereof shall survive such termination.
SECTION 10. Default by One or More of the
Underwriters. If one or more of the Underwriters shall fail
at Closing Time to purchase the Initial Shares which it or
they are obligated to purchase under this Agreement and the
Pricing Agreement (the "Defaulted Shares"), the
Representatives shall have the right, within 24 hours
thereafter, to make arrangements for one or more of the non-
defaulting Underwriters, or any other underwriters, to
purchase all, but not less than all, of the Defaulted Shares
in such amounts as may be agreed upon and upon the terms
herein set forth; if, however, the Representatives shall not
have completed such arrangements within such 24-hour period,
then:
(a) if the number of Defaulted Shares does not
exceed 10% of the Initial Shares, each of the non-
defaulting Underwriters shall be obligated, severally
and not jointly, to purchase the full amount thereof in
the proportions that their respective underwriting
obligations hereunder bear to the underwriting
obligations of all non-defaulting Underwriters, or
(b) if the number of Defaulted Shares exceeds 10%
of the Initial Shares, this Agreement shall terminate
without liability on the part of any nondefaulting
Underwriter or the Company.
No action taken pursuant to this Section shall
relieve any defaulting Underwriter from liability in respect
of its default.
In the event of any such default which does not
result in a termination of this Agreement, either the
Representatives or the Company shall have the right to
postpone Closing Time for a period not exceeding seven days
in order to effect any changes deemed necessary or advisable
in the Registration Statement or Prospectus or in any other
documents or arrangements.
SECTION 11. Notices. All notices and other
communications hereunder shall be in writing and shall be
deemed to have been duly given if mailed, personally
delivered or transmitted by any standard form of
telecommunication. Notices to the Underwriters shall be
directed to the Representatives in care of Merrill Lynch &
Co., North Tower, World Financial Center, New York, New York
10281-1201, Attention of Corporate Finance, 27th Floor;
notices to the Company shall be directed to it at 55 East
Camperdown Way, Post Office Box 1028, Greenville, South
Carolina 29602, Attention of Treasurer, with a copy to
Corporate Secretary.
SECTION 12. Parties. This Agreement and the
Pricing Agreement shall each inure to the benefit of and be
binding upon the Underwriters and the Company and their
respective successors. Nothing expressed or mentioned in
this Agreement or the Pricing Agreement is intended or shall
be construed to give any person, firm or corporation, other
than the Underwriters and the Company and their respective
successors and the controlling persons and officers and
directors referred to in Sections 6 and 7 and their
respective successors, heirs and legal representatives, any
legal or equitable right, remedy or claim under or in
respect of this Agreement or the Pricing Agreement or any
provision herein or therein contained. This Agreement and
the Pricing Agreement and all conditions and provisions
hereof and thereof are intended to be for the sole and
exclusive benefit of the Underwriters and the Company and
their respective successors, and said controlling persons
and officers and directors and their respective successors,
heirs and legal representatives, and for the benefit of no
other person, firm or corporation. No purchaser of Shares
from any Underwriter shall be deemed to be a successor by
reason merely of such purchase.
SECTION 13. Governing Law and Time. This
Agreement and the Pricing Agreement shall be governed by and
construed in accordance with the laws of the State of New
York applicable to agreements made and to be performed in
said State. Specified times of day refer to New York City
time.
If the foregoing is in accordance with your
understanding of our agreement, please sign and return to
the Company a counterpart hereof, whereupon this instrument,
along with all counterparts, will become a binding agreement
between the Underwriters and the Company in accordance with
its terms.
Very truly yours,
BOWATER INCORPORATED,
By /s/ DAVID G. MAFFUCCI
________________________
Name: David G. Maffucci
Title: Vice President-
Treasurer
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
SALOMON BROTHERS INC
By MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated,
By /s/ JAMES A. HISLOP
____________________________
Name: James A. Hislop
Title: Managing Director
For themselves and as Representatives of the other
Underwriters named in Schedule A hereto.
SCHEDULE A
Number of
Initial
Name of Underwriter Shares
Merrill Lynch, Pierce, Fenner & Smith
Incorporated .......................... 1,300,000
Salomon Brothers Inc .................... 1,300,000
CS First Boston Corporation ............. 850,000
J.P. Morgan Securities Inc. ............. 850,000
Total............................... 4,300,000
EXHIBIT A
BOWATER INCORPORATED
(a Delaware Corporation)
4,300,000 Depositary Shares
Representing a One-Fourth
Interest in a Share of
7% PRIDES, Series B Convertible Preferred Stock,
par value $1 per share
PRICING AGREEMENT
February 1, 1994
MERRILL LYNCH & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
SALOMON BROTHERS INC
as Representatives of the several Underwriters
named in the within-mentioned Purchase Agreement
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Dear Sirs:
Reference is made to the Purchase Agreement, dated
February 1, 1994 (the "Purchase Agreement"), relating to the
purchase by the several Underwriters named in Schedule A
thereto (the "Underwriters"), for whom Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, and
Salomon Brothers Inc are acting as representatives (the
"Representatives"), of the Depositary Shares (the "Shares"),
representing a one-fourth interest in the 7% PRIDES, Series B
Convertible Preferred Stock, of Bowater Incorporated, a
Delaware corporation (the "Company").
Pursuant to Section 2 of the Purchase Agreement,
the Company agrees with each Underwriter as follows:
1. The initial public offering price per share
for the Shares, determined as provided in said
Section 2, shall be $23.50.
2. The purchase price per share for the Shares to
be paid by the several Underwriters shall be $22.85
being an amount equal to the initial public offering
price set forth above less $.65 per share; provided that
the purchase price per share for any Option Shares (as
defined in the Purchase Agreement) purchased upon
exercise of the over-allotment option described in
Section 2(b) of the Purchase Agreement shall be reduced
by an amount per share equal to any dividends per share
declared by the Company and payable on the Initial
Shares (as defined in the Purchase Agreement) but not
payable on the Option Shares.
3. The dividend rate on the PRIDES, Series B
Convertible Preferred Stock will be 7%.
4. Payment of the purchase price for, and delivery
of certificates for, the Shares shall be at the office
of Cravath, Swaine & Moore, New York, at 10:00 A.M. on
the fifth business day after the execution of this
Pricing Agreement.
If the foregoing is in accordance with your
understanding of our agreement, please sign and return to the
Company a counterpart hereof, whereupon this instrument,
along with all counterparts, will become a binding agreement
between the Underwriters and the Company in accordance with
its terms.
Very truly yours,
BOWATER INCORPORATED
By /s/ DAVID G. MAFFUCCI
_________________________
Name: David G. Maffucci
Title: Vice President-
Treasurer
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
SALOMON BROTHERS INC
By MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
By /s/ JAMES A. HISLOP
___________________________
Name: James A. Hislop
Title: Managing Director
For themselves and as Representatives of the other
Underwriters named in Schedule A to the Purchase Agreement.