▇▇▇▇▇ INDUSTRIES, INC.
(an Indiana corporation)
$100,000,000 6.75% Notes due 2008
UNDERWRITING AGREEMENT
----------------------
March 18, 1998
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇▇ Brothers Inc.
c/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
▇▇▇▇▇ Industries, Inc., an Indiana corporation (the "Company"),
confirms its agreement with ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch,
Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇"), ▇▇▇▇▇▇ Brothers
Inc. and each of the Underwriters named in Schedule A hereto
(collectively, the "Underwriters," which term shall also include any
underwriter substituted as hereinafter provided in Section 10 hereof),
for whom ▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ Brothers Inc. are acting as
representatives (in such capacity, the "Representatives"), with
respect to the issue and sale by the Company and the purchase by the
Underwriters, acting severally and not jointly, of the respective
principal amounts set forth in said Schedule A of $100,000,000
aggregate principal amount of the Company's Notes due 2008 (the
"Securities"). The Securities are to be issued pursuant to an
indenture, dated as of July 3, 1990 (the "Indenture"), between the
Company and ▇▇▇▇▇▇ Trust and Savings Bank, as trustee (the "Trustee").
The Company understands that the Underwriters propose to make a
public offering of the Securities as soon as the Representatives deem
advisable after this Agreement has been executed and delivered.
The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-3 (No. 33-53087)
for the registration of the Securities and certain other securities of
the Company under the Securities Act of 1933, as amended (the "1933
Act"), and the offering thereof from time to time in accordance with
Rule 415 of the rules and regulations of the Commission under the 1933
Act (the "1933 Act Regulations"), including the related preliminary
prospectus or prospectuses. Such registration statement has been
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declared effective by the Commission and the Indenture has been duly
qualified under the Trust Indenture Act of 1939, as amended (the "1939
Act"), and the Company has filed such post-effective amendments
thereto as may be required prior to the execution of this Agreement
and each such post-effective amendment has been declared effective by
the Commission. Promptly after execution and delivery of this
Agreement, the Company will either (i) prepare and file a basic
prospectus and prospectus supplement in accordance with the provisions
of paragraph (b) of Rule 424 ("Rule 424(b)") of the 1933 Act
Regulations or (ii) if the Company has elected to rely upon Rule 434
(" Rule 434") of the 1933 Act Regulations, prepare and file a term
sheet (a "Term Sheet") in accordance with the provisions of Rule 434
and Rule 424(b). Such registration statement (as so amended, if
applicable), including the exhibits thereto, schedules thereto, if
any, and the documents incorporated by reference therein pursuant to
Item 12 of Form S-3 under the 1933 Act, at the time it became
effective, and including the information, if any, deemed to be a part
thereof pursuant to Rule 434 (the "Rule 434 Information") and the
information, if any, deemed to be a part thereof pursuant to Rule 430A
of the 1933 Act Regulations (the " Rule 430A Information"), is
referred to herein as the "Registration Statement;" and the final
basic prospectus and the final prospectus supplement relating to the
offering of the Securities, including the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the 1933 Act,
in the form first furnished to the Underwriters by the Company for use
in connection with the offering of the Securities, are collectively
referred to herein as the "Prospectus;" provided, however, that all
references to the "Registration Statement" and the "Prospectus" shall
also be deemed to include all documents incorporated therein by
reference pursuant to the Securities Exchange Act of 1934, as amended
(the "1934 Act"), prior to the execution of this Agreement; provided,
further, that if the Company files a registration statement with the
Commission pursuant to Rule 462(b) of the 1933 Act Regulations (the
"Rule 462(b) Registration Statement"), then, after such filing, all
references to "Registration Statement" shall also be deemed to include
the Rule 462 Registration Statement; and provided, further, that if
the Company elects to rely upon Rule 434 of the 1933 Act Regulations,
then all references to "Prospectus" shall also be deemed to include
the final or preliminary prospectus and the Term Sheet, as the case
may be, in the form first furnished to the Underwriters by the Company
in reliance upon Rule 434, and all references in this Agreement to the
date of the Prospectus shall mean the date of the Term Sheet. A
"preliminary prospectus" shall be deemed to refer to any prospectus
used before the Registration Statement became effective and any
prospectus that omitted, as applicable, the Rule 434 Information or
Rule 430A Information and was used after such effectiveness. For
purposes of this Agreement, all references to the Registration
Statement, Prospectus, Term Sheet or preliminary prospectus or to any
amendment or supplement to any of the foregoing shall be deemed to
include any copy filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval system ("▇▇▇▇▇").
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All references in this Agreement to financial statements and
schedules and other information which is "contained," "included" or
"stated" (or other references of like import) in the Registration
Statement, Prospectus or preliminary prospectus shall be deemed to
mean and include all such financial statements and schedules and other
information which is incorporated by reference in the Registration
Statement, Prospectus or preliminary prospectus, as the case may be;
and all references in this Agreement to amendments or supplements to
the Registration Statement, Prospectus or preliminary prospectus shall
be deemed to mean and include the filing of any document under the
1934 Act which is incorporated by reference in the Registration
Statement, Prospectus or preliminary prospectus, as the case may be.
SECTION 1. REPRESENTATIONS AND WARRANTIES.
(a) REPRESENTATIONS AND WARRANTIES BY THE COMPANY. The Company
represents and warrants to each Underwriter as of the date hereof and
as of the Closing Time (as defined below), and agrees with each
Underwriter, as follows:
(1) COMPLIANCE WITH REGISTRATION REQUIREMENTS. The Company
meets the requirements for use of Form S-3 under the 1933 Act.
The Registration Statement (including any Rule 462(b)
Registration Statement) has become effective under the 1933 Act
and no stop order suspending the effectiveness of the
Registration Statement (or such Rule 462(b) Registration
Statement) has been issued under the 1933 Act and no proceedings
for that purpose have been instituted or are pending or, to the
knowledge of the Company, are contemplated by the Commission, and
any request on the part of the Commission for additional
information has been complied with. In addition, the Indenture
has been duly qualified under the 1939 Act.
At the respective times the Registration Statement
(including any Rule 462(b) Registration Statement) and any post-
effective amendments thereto (including the filing of the
Company's most recent Annual Report on Form 10-K with the
Commission (the "Annual Report on Form 10-K")) became effective
and at the Closing Time, the Registration Statement (including
any Rule 462(b) Registration Statement) and any amendments and
supplements thereto complied and will comply in all material
respects with the requirements of the 1933 Act and the 1933 Act
Regulations and the 1939 Act and the rules and regulations of the
Commission under the 1939 Act (the "1939 Act Regulations") and
did not 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. At the date of the Prospectus (or any amendment or
supplement thereto) and at the Closing Time, neither the
Prospectus nor any amendments and supplements thereto included or
will include an untrue statement of a material fact or omitted or
will omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which
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they were made, not misleading. If the Company elects to rely
upon Rule 434 of the 1933 Act Regulations, the Company will
comply with the requirements of Rule 434. Notwithstanding the
foregoing, the representations and warranties in this subsection
shall not apply to statements in or omissions from the
Registration Statement or the Prospectus made in reliance upon
and in conformity with information furnished to the Company in
writing by any Underwriter through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for
use in the Registration Statement or the Prospectus.
Each preliminary prospectus and prospectus filed as part of
the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the 1933
Act, complied when so filed in all material respects with the
1933 Act Regulations and each preliminary prospectus and the
Prospectus delivered to the Underwriters for use in connection
with the offering of the Securities was identical to any
electronically transmitted copies thereof filed with the
Commission pursuant to ▇▇▇▇▇, except to the extent permitted by
Regulation S-T under the 1933 Act Regulations.
(2) INCORPORATED DOCUMENTS. The documents incorporated or
deemed to be incorporated by reference in the Registration
Statement and the Prospectus, at the time they were or hereafter
are filed with the Commission, complied and will comply in all
material respects with the requirements of the 1934 Act and the
rules and regulations of the Commission thereunder (the "1934 Act
Regulations") and, when read together with the other information
in the Prospectus, at the time the Registration Statement became
effective, at the time the Prospectus was issued and at the
Closing Time, did not 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 in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading.
(3) INDEPENDENT ACCOUNTANTS. The accountants who certified
the financial statements and any supporting schedules thereto
included or incorporated by reference in the Registration
Statement and the Prospectus are independent public accountants
as required by the 1933 Act and the 1933 Act Regulations.
(4) FINANCIAL STATEMENTS. The consolidated financial
statements of the Company included in the Registration Statement
and the Prospectus, together with the related schedules and
notes, as well as those financial statements, schedules and notes
of any other entity included therein, present fairly the
financial position of the Company and its consolidated
subsidiaries, or such other entity, as the case may be, at the
dates indicated and the statement of operations, stockholders'
equity and cash flows of the Company and its consolidated
subsidiaries, or such other entity, as the case may be, for the
periods specified. Such financial statements have been prepared
9
in conformity with generally accepted accounting principles
("GAAP") applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes thereto). The
supporting schedules, if any, included in the Registration
Statement and the Prospectus present fairly in accordance with
GAAP (except as may be indicated in the notes thereto) the
information required to be stated therein. The selected
financial data and the summary financial information included in
the Prospectus present fairly the information shown therein and
have been compiled on a basis consistent with that of the audited
financial statements included in the Registration Statement and
the Prospectus. The Company's ratios of earnings to fixed
charges and ratio of fixed charges to combined fixed charges and
preferred dividends (actual, and if any, pro forma) included in
the Prospectus and in Exhibit 12 to the Registration Statement
have been calculated in compliance with Item 503(d) of Regulation
S-K of the Commission.
(5) NO MATERIAL ADVERSE CHANGE IN BUSINESS. 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 (a "Material Adverse Effect"),
(B) there have been no transactions entered into by the Company
or any of its subsidiaries, other than those arising in the
ordinary course of business, which are material with respect to
the Company and its subsidiaries considered as one enterprise and
(C) except for regular quarterly dividends on the Company's
common stock, par value $2.50 per share (the "Common Stock") in
amounts per share that are consistent with past practice, there
has been no dividend or distribution of any kind declared, paid
or made by the Company on any class of its capital stock.
(6) GOOD STANDING OF THE COMPANY. The Company has been
duly organized and is validly existing as a corporation in good
standing under the laws of the State of Indiana and has corporate
power and authority to own, lease and operate its properties and
to conduct its business as described in the Prospectus and to
enter into and perform its obligations under, or as contemplated
under, this Agreement and the Indenture. The Company is duly
qualified as a foreign corporation to transact business and is in
good standing in each other jurisdiction in which such
qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure to so qualify or be in good standing would not result in
a Material Adverse Effect.
(7) GOOD STANDING OF SUBSIDIARIES. Each "significant
subsidiary" of the Company (as such term is defined in Rule 1-02
of Regulation S-X promulgated under the 1933 Act) (each, a
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"Subsidiary" and, collectively, the "Subsidiaries") has been duly
organized and 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
Prospectus and is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business,
except where the failure to so qualify or be in good standing
would not result in a Material Adverse Effect. Except as
otherwise stated in the Registration Statement and the
Prospectus, all of the issued and outstanding capital stock of
each Subsidiary has been duly authorized and is validly issued,
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, encumbrance, claim or equity.
None of the outstanding shares of capital stock of any Subsidiary
was issued in violation of preemptive or other similar rights of
any securityholder of such Subsidiary. The only subsidiaries of
the Company are (A) the subsidiaries listed on Schedule C hereto
and (B) certain other subsidiaries which, considered in the
aggregate as a single Subsidiary, do not constitute a
"significant subsidiary" as defined in Rule 1-07 of Regulation
S-X.
(8) CAPITALIZATION. The authorized, issued and outstanding
capital stock of the Company is as set forth in the column
entitled "Actual" under the "Capitalization" section (except for
subsequent issuances thereof pursuant to reservations, agreements
or employee benefit plans referred to in the Prospectus or
pursuant to the exercise of convertible securities or options
referred to in the Prospectus or except for the funding of
employee benefit plans referred to in the Prospectus). Such
shares of capital stock have been duly authorized and validly
issued by the Company and are fully paid and non-assessable, and
none of such shares of capital stock was issued in violation of
preemptive or other similar rights of any securityholder of the
Company.
(9) AUTHORIZATION OF THIS AGREEMENT. This Agreement has
been duly authorized, executed and delivered by the Company.
(10) AUTHORIZATION OF THE SECURITIES. The Securities have
been duly authorized and, at the Closing Time, will have been
duly executed by the Company and, when authenticated, issued and
delivered in the manner provided for in the Indenture and
delivered against payment of the purchase price therefor as
specified in this Agreement, will constitute valid and binding
obligations of the Company, enforceable against the Company in
accordance with their terms, except as the enforcement thereof
may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers),
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reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally or by general
equitable principles (regardless of whether enforcement is
considered in a proceeding in equity or at law)(the "Bankruptcy
Exceptions"). The Securities will be in the form contemplated
by, and each registered holder thereof is entitled to the
benefits of, the Indenture.
(11) AUTHORIZATION OF THE INDENTURE. The Indenture has been
duly authorized by the Company and duly qualified under the 1939
Act and constitutes a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms,
except as the enforcement thereof may be limited by the
Bankruptcy Exceptions.
(12) DESCRIPTIONS OF THE SECURITIES AND THE INDENTURE. The
Securities and the Indenture will conform in all material
respects to the statements relating thereto contained in the
Prospectus and the Indenture is in substantially the form filed
as an exhibit to the Registration Statement.
(13) ABSENCE OF DEFAULTS AND CONFLICTS. Neither the Company
nor any of its subsidiaries is in violation of its charter or by-
laws or in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or other agreement or instrument to which
the Company or any of its subsidiaries is a party or by which it
or any of them may be bound, or to which any of the assets,
properties or operations of the Company or any of its
subsidiaries is subject (collectively, "Agreements and
Instruments"), except for such defaults that would not result in
a Material Adverse Effect. The execution, delivery and
performance of this Agreement, the Indenture and any other
agreement or instrument entered into or issued or to be entered
into or issued by the Company in connection with the transactions
contemplated hereby or thereby and the consummation of the
transactions contemplated herein (including the issuance and sale
of the Securities and the use of the proceeds from the sale of
the Securities as described under the caption "Use of Proceeds")
and compliance by the Company with its obligations hereunder and
thereunder have been duly authorized by all necessary action
(corporate or otherwise) and do not and will not, whether with or
without the giving of notice or passage of time or both, conflict
with or constitute a breach of, or default or Repayment Event (as
defined below) under, or result in the creation or imposition of
any lien, charge or encumbrance upon any assets, properties or
operations of the Company or any of its subsidiaries pursuant to,
any Agreements and Instruments (except for such conflicts,
breaches or defaults or liens, charges or encumbrances that would
not result in a Material Adverse Effect), nor will such action
result in any violation of the provisions of the charter or
by-laws of the Company or any of its subsidiaries or (except for
12
such violations that would not result in a Material Adverse
Effect) any applicable law, statute, rule, regulation, judgment,
order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any of its subsidiaries or any
of their assets, properties or operations. As used herein, a
"Repayment Event" means any event or condition which gives the
holder of any note, debenture or other evidence of indebtedness
(or any person acting on such holder's behalf) the right to
require (whether with or without the giving of notice or passage
of time or both) the repurchase, redemption or repayment of all
or a portion of such indebtedness by the Company or any of its
subsidiaries.
(14) ABSENCE OF LABOR DISPUTE. No work stoppage or strike
involving the employees of the Company or any of its subsidiaries
exists or, to the knowledge of the Company, is imminent, and the
Company is not aware of any existing or imminent labor
disturbance by the employees of any of its or any subsidiary's
principal suppliers, manufacturers, customers or contractors,
which, in any such case, may reasonably be expected to result in
a Material Adverse Effect.
(15) ABSENCE OF PROCEEDINGS. There is no action, suit,
proceeding, inquiry or investigation before or brought by any
court or governmental agency or body, domestic or foreign, now
pending, or to the knowledge of the Company threatened, against
or affecting the Company or any of its subsidiaries which is
required to be disclosed in the Registration Statement and the
Prospectus (other than as stated therein), or which might
reasonably be expected to result in a Material Adverse Effect, or
which might reasonably be expected to materially and adversely
affect the assets, properties or operations thereof or the
consummation of the transactions contemplated under this
Agreement or the Indenture or the performance by the Company of
its obligations hereunder and thereunder. The aggregate of all
pending legal or governmental proceedings to which the Company or
any of its subsidiaries is a party or of which any of their
respective assets, properties or operations is the subject which
are not described in the Registration Statement and the
Prospectus, including ordinary routine litigation incidental to
the business, could not reasonably be expected to result in a
Material Adverse Effect.
(16) ACCURACY OF EXHIBITS. There are no contracts or
documents which are required to be described in the Registration
Statement, the Prospectus or the documents incorporated by
reference therein or to be filed as exhibits thereto which have
not been so described and filed as required.
(17) ABSENCE OF FURTHER REQUIREMENTS. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority
13
or agency, domestic or foreign, is necessary or required for the
due authorization, execution and delivery by the Company of this
Agreement or for the performance by the Company of the
transactions contemplated under the Prospectus, this Agreement or
the Indenture, except such as have been already made, obtained or
rendered, as applicable, or as may be required under the 1933
Act, the 1933 Act Regulations or state securities laws.
(18) POSSESSION OF INTELLECTUAL PROPERTY. The Company and
its subsidiaries own or possess, or can acquire on reasonable
terms, adequate patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks,
trade names or other intellectual property (collectively,
"Intellectual Property") necessary to carry on the business now
operated by them, other than those the absence of which would
not, singly or in the aggregate, result in a Material Adverse
Effect, and neither the Company nor any of its subsidiaries has
received any notice or is otherwise aware of any infringement of
or conflict with asserted rights of others with respect to any
Intellectual Property or of any facts or circumstances which
would render any Intellectual Property invalid or inadequate to
protect the interest of the Company or any of its subsidiaries
therein, and which infringement or conflict (if the subject of
any unfavorable decision, ruling or finding) or invalidity or
inadequacy, singly or in the aggregate, would result in a
Material Adverse Effect.
(19) POSSESSION OF LICENSES AND PERMITS. The Company and
its subsidiaries possess such permits, licenses, approvals,
consents and other authorizations (collectively, "Governmental
Licenses") issued by the appropriate federal, state, local or
foreign regulatory agencies or bodies necessary to conduct the
business now operated by them except where the failure to possess
the same would not, individually or in the aggregate, have a
Material Adverse Effect. The Company and its subsidiaries are in
compliance with the terms and conditions of all such Governmental
Licenses, except where the failure so to comply would not, singly
or in the aggregate, result in a Material Adverse Effect. All of
the Governmental Licenses are valid and in full force and effect,
except where the invalidity of such Governmental Licenses or the
failure of such Governmental Licenses to be in full force and
effect would not result in a Material Adverse Effect. Neither
the Company nor any of its subsidiaries has received any notice
of proceedings relating to the revocation or modification of any
such Governmental Licenses which, singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding, would
result in a Material Adverse Effect.
(20) TITLE TO PROPERTY. The Company and its Subsidiaries
have good and marketable title to all real property owned by the
Company and its Subsidiaries and good title to all other
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properties owned by them, in each case, free and clear of all
mortgages, pledges, liens, security interests, claims,
restrictions or encumbrances of any kind, except (A) as otherwise
stated in the Registration Statement and the Prospectus or (B)
those which do not, singly or in the aggregate, materially affect
the value of such property and do not interfere with the use made
and proposed to be made of such property by the Company and its
Subsidiaries considered as one enterprise. All of the leases and
subleases material to the business of the Company and its
Subsidiaries considered as one enterprise, and under which the
Company or any of its Subsidiaries holds properties described in
the Prospectus, are in full force and effect, and neither the
Company nor any of its Subsidiaries has received any notice of
any material claim of any sort that has been asserted by anyone
adverse to the rights of the Company or any of its Subsidiaries
under any of the leases or subleases mentioned above, or
affecting or questioning the rights of the Company or such
Subsidiary to the continued possession of the leased or subleased
premises under any such lease or sublease.
(21) COMMODITY EXCHANGE ACT. The Securities, upon issuance,
will be excluded or exempted under, or beyond the purview of, the
Commodity Exchange Act, as amended (the "Commodity Exchange
Act"), and the rules and regulations of the Commodity Futures
Trading Commission under the Commodity Exchange Act (the
"Commodity Exchange Act Regulations").
(22) INVESTMENT COMPANY ACT. The Company is not, and upon
the issuance and sale of the Securities as herein contemplated
and the application of the net proceeds therefrom as described in
the Prospectus will not be, an "investment company" within the
meaning of the Investment Company Act of 1940, as amended (the
"1940 Act").
(23) ENVIRONMENTAL LAWS. Except as described in Schedule D
hereto, and except as would not, singly or in the aggregate,
result in a Material Adverse Effect, (A) neither the Company nor
any of its subsidiaries is in violation of any federal, state,
local or foreign statute, law, rule, regulation, ordinance, code,
policy or rule of common law or any judicial or administrative
interpretation thereof including any judicial or administrative
order, consent, decree or judgment, relating to pollution or
protection of human health, the environment (including, without
limitation, ambient air, surface water, groundwater, land surface
or subsurface strata) or wildlife, including, without limitation,
laws and regulations relating to the release or threatened
release of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture,
processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials (collectively,
"Environmental Laws"), (B) the Company and its subsidiaries have
all permits, authorizations and approvals required under any
15
applicable Environmental Laws and are each in compliance with
their requirements, (C) there are no pending or threatened
administrative, regulatory or judicial actions, suits, demands,
demand letters, claims, liens, notices of noncompliance or
violation, investigation or proceedings relating to any
Environmental Law against the Company or any of its subsidiaries
and (D) there are no events or circumstances that might
reasonably be expected to form the basis of an order for clean-up
or remediation, or an action, suit or proceeding by any private
party or governmental body or agency, against or affecting the
Company or any of its subsidiaries relating to Hazardous
Materials or any Environmental Laws.
(24) SOLVENCY. The Company is, and immediately after the
Closing Time will be, Solvent. As used herein, the term
"Solvent" means, with respect to the Company on a particular
date, that on such date (A) the fair market value of the assets
of the Company is greater than the total amount of liabilities
(including contingent liabilities) of the Company, (B) the
present fair salable value of the assets of the Company is
greater than the amount that will be required to pay the probable
liabilities of the Company on its debts as they become absolute
and matured, (C) the Company is able to realize upon its assets
and pay its debts and other liabilities, including contingent
obligations, as they mature, and (D) the Company does not have
unreasonably small capital.
(25) PRICE STABILIZATION. The Company has not taken and
will not take, directly or indirectly, any action designed to, or
that might be reasonably expected to, cause or result in
stabilization or manipulation of the price of the Securities.
(26) TAXES. The Company and each of its subsidiaries have
filed all federal, foreign, state and local income and franchise
tax returns required to be filed and have paid all taxes shown
thereon as due, and there is no material tax deficiency which has
been or is reasonably likely to be asserted against the Company
or any of its subsidiaries; all material tax liabilities of the
Company and its subsidiaries are adequately provided for on the
books of the Company and its subsidiaries.
(27) REGISTRATION RIGHTS. There are no contracts,
agreements or understandings between the Company and any person
granting such person the right to require the Company to file a
registration statement under the 1933 Act with respect to any
securities of the Company owned or to be owned by such person or
to require the Company to include such securities in the
securities registered pursuant to the Registration Statement or
in any securities being registered pursuant to any other
registration statement filed by the Company under the 1933 Act.
(b) OFFICERS' CERTIFICATES. Any certificate signed by any
officer of the Company or any of its subsidiaries and delivered to the
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Representatives or to counsel for the Underwriters in connection with
the offering of the Securities shall be deemed a representation and
warranty by the Company to each Underwriter as to the matters covered
thereby on the date of such certificate.
SECTION 2. SALE AND DELIVERY TO UNDERWRITERS; CLOSING.
(a) UNDERWRITTEN SECURITIES. 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 set forth in Schedule B, the aggregate principal amount of
Securities set forth in Schedule A opposite the name of such
Underwriter, plus any additional principal amount of Securities which
such Underwriter may become obligated to purchase pursuant to the
provisions of Section 10 hereof.
(b) PAYMENT. Payment of the purchase price for, and delivery of
certificates for, the Securities shall be made at the offices of
▇▇▇▇▇, Brown & ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, or at such other place as shall be agreed upon by the
Representatives and the Company, at 10:00 A.M. (Eastern time) on the
third (fourth, if the pricing occurs after 4:30 P.M. (Eastern time) on
any given day) business day after the date hereof (unless postponed in
accordance with the provisions of Section 10 hereof), 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").
Payment shall be made to the Company by wire transfer of
immediately available funds to a bank account designated by the
Company, against delivery to the Representatives for the respective
accounts of the Underwriters of certificates for the Securities to be
purchased by them. 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
Securities which it has agreed to purchase. ▇▇▇▇▇▇▇ ▇▇▇▇▇,
individually and not as representative of the Underwriters, may (but
shall not be obligated to) make payment of the purchase price for the
Securities to be purchased by any Underwriter whose funds have not
been received by the Closing Time but such payment shall not relieve
such Underwriter from its obligations hereunder.
(c) DENOMINATIONS; REGISTRATION. Certificates for the
Securities shall be in such denominations ($1,000 or integral
multiples thereof) and registered in such names as the Representatives
may request in writing at least one full business day prior to the
Closing Time. Certificates for the Securities will be made available
for examination and packaging by the Representatives in The City of
New York not later than 10:00 A.M. (Eastern time) on the business day
prior to the Closing Time.
17
SECTION 3. COVENANTS OF THE COMPANY. The Company covenants with
each Underwriter as follows:
(a) COMPLIANCE WITH SECURITIES REGULATIONS AND COMMISSION
REQUESTS. The Company, subject to Section 3(b), will comply with the
requirements of Rule 434 of the 1933 Act Regulations, if and as
applicable, and will notify the Representative(s) immediately, and
confirm the notice in writing, of (i) the effectiveness of any post-
effective amendment to the Registration Statement or the filing of any
supplement or amendment to the Prospectus, (ii) the receipt of any
comments from the Commission, (iii) 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) the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing
or suspending the use of any preliminary prospectus, or of the
suspension of the qualification of the Securities for offering or sale
in any jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes. The Company will promptly
effect the filings necessary pursuant to Rule 424 and will take such
steps as it deems necessary to ascertain promptly whether the
Prospectus transmitted for filing under Rule 424 was received for
filing by the Commission and, in the event that it was not, it will
promptly file the Prospectus. 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) FILING OF AMENDMENTS. The Company will give the
Representatives notice of its intention to file or prepare any
amendment to the Registration Statement (including any filing under
Rule 462(b) of the 1933 Act Regulations), any Term Sheet or any
amendment, supplement or revision to either the prospectus included in
the Registration Statement at the time it became effective or to the
Prospectus, whether pursuant to the 1933 Act, the 1934 Act or
otherwise, will furnish the Representatives with copies of any such
documents a reasonable amount of time prior to such proposed filing or
use, as the case may be, and will not file or use any such document to
which the Representatives or counsel for the Underwriters shall
reasonably object.
(c) DELIVERY OF REGISTRATION STATEMENTS. The Company has
furnished or will deliver to the Representatives and counsel for the
Underwriters, without charge, 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) and signed copies of all consents and certificates of
experts, and will also deliver to the Representatives, without charge,
a conformed copy of the Registration Statement as originally filed and
of each amendment thereto (without exhibits) for each of the
Underwriters. The Registration Statement and each amendment thereto
furnished to the Underwriters will be identical to any electronically
18
transmitted copies thereof filed with the Commission pursuant to
▇▇▇▇▇, except to the extent permitted by Regulation S-T.
(d) DELIVERY OF PROSPECTUSES. The Company will furnish to each
Underwriter, without charge, 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. The Prospectus and any
amendments or supplements thereto furnished to the Underwriters will
be identical to any electronically transmitted copies thereof filed
with the Commission pursuant to ▇▇▇▇▇, except to the extent permitted
by Regulation S-T.
(e) CONTINUED COMPLIANCE WITH SECURITIES LAWS. The Company will
comply with the 1933 Act and the 1933 Act Regulations, the 1934 Act
and the 1934 Act Regulations and the 1939 Act and the 1939 Act
Regulations so as to permit the completion of the distribution of the
Securities as contemplated in this Agreement and in the Registration
Statement and the Prospectus. If at any time when the Prospectus is
required by the 1933 Act or the 1934 Act to be delivered in connection
with sales of the Securities, any event shall occur or condition shall
exist as a result of which it is necessary, in the opinion of counsel
for the Underwriters or for the Company, to amend the Registration
Statement in order that the Registration Statement 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 or 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 a material fact necessary in order to
make the statements therein not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, or
if it shall be necessary, in the opinion of such counsel, at any such
time to amend the Registration Statement or amend or supplement the
Prospectus in order to comply with the requirements of the 1933 Act or
the 1933 Act Regulations, the Company will promptly prepare and file
with the Commission, subject to Section 3(b), such amendment or
supplement as may be necessary to correct such statement or omission
or to make the Registration Statement or the Prospectus comply with
such requirements, and the Company will furnish to the Underwriters,
without charge, such number of copies of such amendment or supplement
as the Underwriters may reasonably request.
(f) BLUE SKY QUALIFICATIONS. The Company will use its best
efforts, in cooperation with the Underwriters, to qualify the
Securities for offering and sale under the applicable securities laws
of such states and other jurisdictions as the Representatives may
designate and to maintain such qualifications in effect for a period
of not less than one year from the later of the effective date of the
Registration Statement and any Rule 462(b) Registration Statement;
provided, however, that the Company shall not be obligated to file any
general consent to service of process or to qualify as a foreign
corporation or as a dealer in securities in any jurisdiction in which
it is not so qualified or to subject itself to taxation in respect of
19
doing business in any jurisdiction in which it is not otherwise so
subject. In each jurisdiction in which the Securities have been so
qualified, the Company 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 and any Rule 462(b)
Registration Statement.
(g) EARNINGS STATEMENT. The Company will timely file such
reports pursuant to the 1934 Act as are necessary in order to make
generally available to its securityholders as soon as practicable an
earnings statement for the purposes of, and to provide the benefits
contemplated by, the last paragraph of Section 11(a) of the 1933 Act.
(h) USE OF PROCEEDS. The Company will use the net proceeds
received by it from the sale of the Securities in the manner specified
in the Prospectus under "Use of Proceeds."
(i) RESTRICTION ON SALE OF SECURITIES. During a period of 30
days from the date of the Prospectus, the Company will not, without
the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇, directly or indirectly,
issue, sell, offer or contract to sell, grant any option for the sale
of, or otherwise transfer or dispose of, any debt securities of the
Company.
(j) REPORTING REQUIREMENTS. 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 the 1934 Act within the time periods required
by the 1934 Act and the 1934 Act Regulations.
SECTION 4. PAYMENT OF EXPENSES. (a) EXPENSES. The Company will
pay all expenses incident to the performance of its obligations under
this Agreement, including, but not limited to, (i) the preparation,
printing and filing of the Registration Statement (including financial
statements and exhibits) as originally filed and of each amendment
thereto, (ii) the preparation, printing and delivery to the
Underwriters of this Agreement, any Agreement among Underwriters, the
Indenture and such other documents as may be required in connection
with the offering, purchase, sale, issuance or delivery of the
Securities, (iii) the preparation, issuance and delivery of the
Securities, any certificates for the Securities to the Underwriters,
including any transfer taxes and any stamp or other duties payable
upon the sale, issuance or delivery of the Securities to the
Underwriters, (iv) the fees and disbursements of the Company's
counsel, accountants and other advisors or agents (including transfer
agents and registrars), as well as the fees and disbursements of the
Trustee for the Securities and its counsel, (v) the qualification of
the Securities under state 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, printing
and delivery of the Blue Sky Survey, and any amendment thereto, (vi)
20
the printing and delivery to the Underwriters of copies of each
preliminary prospectus, any Term Sheet, and the Prospectus and any
amendments or supplements thereto, (vii) the fees charged by
nationally recognized statistical rating organizations for the rating
of the Securities, or (viii) the cost of qualifying the Securities
with the Depository Trust Company.
(b) TERMINATION OF AGREEMENT. If this Agreement is terminated
by the Representatives, in accordance with the provisions of Section 5
or Section 9(a)(i) hereof, the Company shall reimburse the
Underwriters for all of their 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
contained in Section 1 hereof or in certificates of any officer of the
Company or any of its subsidiaries delivered pursuant to the
provisions hereof, to the performance by the Company of its covenants
and other obligations hereunder, and to the following further
conditions:
(a) EFFECTIVENESS OF REGISTRATION STATEMENT. The Registration
Statement, including any Rule 462(b) Registration Statement, shall
have become effective under the 1933 Act and at Closing Time no stop
order suspending the effectiveness of the Registration Statement shall
have been issued under the 1933 Act and no proceedings for that
purpose shall have been instituted or be pending or threatened by the
Commission, and any request on the part of the Commission for
additional information shall have been complied with to the reasonable
satisfaction of counsel to the Underwriters. A prospectus shall have
been filed with the Commission in accordance with Rule 424(b) or a
post-effective amendment providing such information shall have been
filed and declared effective, or, if the Company has elected to rely
upon Rule 434 of the 1933 Act Regulations, a Term Sheet including the
Rule 434 Information shall have been filed with the Commission in
accordance with Rule 424(b)(7).
(b) OPINION OF COUNSEL FOR COMPANY. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of
Closing Time, of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇, counsel for the Company, in
form and substance satisfactory to counsel for the Underwriters,
together with signed or reproduced copies of such letter for each of
the other Underwriters, to the effect set forth in Exhibit A hereto.
(c) OPINION OF GENERAL COUNSEL FOR COMPANY. At Closing Time,
the Underwriters shall have received the favorable opinion, dated as
of Closing Time, of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President, General Counsel,
and Secretary for the Company, in form and substance satisfactory to
counsel for the Underwriters, together with signed or reproduced
copies of such letter for each of the other Underwriters to the effect
set forth in Exhibit B hereto.
21
(d) OPINION OF COUNSEL FOR UNDERWRITERS. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of
Closing Time, of ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇, counsel for the Underwriters,
together with signed or reproduced copies of such letter for each of
the other Underwriters, with respect to the validity of the
Securities, the Registration Statement, the Prospectus and other
related matters as the Underwriters may reasonably request. In giving
such opinion, such counsel may rely, as to all matters governed by the
laws of jurisdictions other than the law of the State of New York, the
federal law of the United States and the General Corporation Law of
the State of Delaware, upon the opinions of counsel satisfactory to
the Representatives. Such counsel may also state that, insofar as
such opinion involves factual matters, they have relied, to the extent
they deem proper, upon certificates of officers of the Company and its
subsidiaries and certificates of public officials.
(e) OFFICERS' CERTIFICATE. 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 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 President or a Vice President or the
Treasurer of the Company and of the chief financial officer or chief
accounting officer of the Company, dated as of Closing Time, to the
effect that (i) there has been no such material adverse change, (ii)
the representations and warranties in Section 1(a) are true and
correct with the same force and effect as though expressly made at and
as of the Closing Time, (iii) the Company has complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to the Closing Time, and (iv) no stop order
suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been instituted, are
pending or, to the best of such officer's knowledge, are threatened by
the Commission.
(f) ACCOUNTANTS' COMFORT LETTER. At the time of the execution
of this Agreement, the Representatives shall have received from Price
Waterhouse LLP, a letter dated as of the date hereof, in form and
substance satisfactory to ▇▇▇▇▇▇▇ ▇▇▇▇▇, together with signed or
reproduced copies of such letter for each of the other Underwriters,
containing statements and information of the type ordinarily included
in accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in
the Registration Statement and the Prospectus.
(g) BRING-DOWN COMFORT LETTER. At Closing Time, the
Representatives shall have received from Price Waterhouse LLP, a
letter, dated as of Closing Time, to the effect that they reaffirm the
statements made in the letter furnished pursuant to subsection (f) of
this Section 5, except that the specified date referred to shall be a
date not more than three business days prior to the Closing Time.
22
(h) RATINGS. At Closing Time, the Securities shall have an
investment grade rating by a "nationally recognized statistical rating
organization", as defined by the Commission for purposes of Rule
436(g)(2) of the 1933 Act Regulations, and the Company shall have
delivered to the Representatives a letter, dated as of such date, from
each such rating organization, or other evidence satisfactory to the
Representatives, confirming that the Securities have such rating.
Since the time of execution of this Agreement, there shall not have
occurred a downgrading in, or withdrawal of, the rating assigned to
the Securities or any of the Company's other securities by any such
rating organization, and no such rating organization shall have
publicly announced that it has under surveillance or review its rating
of the Securities or any of the Company's other securities.
(i) ADDITIONAL DOCUMENTS. At Closing Time, counsel for the
Underwriters shall have been furnished with such documents and
opinions as they may require for the purpose of enabling them to pass
upon the issuance and sale of the Securities as herein contemplated,
or in order to evidence the accuracy of any of the representations or
warranties, or the fulfillment of any of the conditions, herein
contained; and all proceedings taken by the Company in connection with
the issuance and sale of the Securities as herein contemplated shall
be satisfactory in form and substance to the Representatives and
counsel for the Underwriters.
(j) NO OBJECTION. The NASD has confirmed that it has not raised
any objection with respect to the fairness and reasonableness of the
underwriting terms and arrangements.
(k) TERMINATION OF AGREEMENT. If any condition specified in
this Section 5 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 the Closing Time,
and such termination shall be without liability of any party to any
other party except as provided in Section 4 and except that Sections
1, 6, 7 and 8 shall survive any such termination and remain in full
force and effect.
SECTION 6. INDEMNIFICATION.
(a) INDEMNIFICATION OF UNDERWRITERS. 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 or Section 20 of the 1934 Act as follows:
(1) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact
contained in the Registration Statement (or any amendment
thereto), including the Rule 434 Information or the Rule 430A
Information deemed to be a part thereof, if applicable, or the
omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the statements
23
therein not misleading or arising out of any untrue statement or
alleged untrue statement of a material fact included in any
preliminary prospectus or 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;
(2) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or any investigation
or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission; provided that (subject to Section 6(d) below) any such
settlement is effected with the written consent of the Company;
and
(3) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by
▇▇▇▇▇▇▇ ▇▇▇▇▇), reasonably incurred in investigating, preparing
or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under
(1) or (2) 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
▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in the Registration Statement (or any
amendment thereto), including the Rule 434 Information or the Rule
430A Information deemed to be a part thereof, if applicable, or any
preliminary prospectus or the Prospectus (or any amendment or
supplement thereto), and PROVIDED, FURTHER, that the foregoing
indemnity with respect to any untrue statement contained in or any
omission from the preliminary prospectus shall not inure to the
benefit of any Underwriter (or any person controlling such
Underwriter) from whom the person asserting any such loss, liability,
claim, damage or expense purchased any of the Securities that are the
subject thereof if the Company shall sustain the burden of proving
that (i) the untrue statement or omission contained in the preliminary
prospectus (excluding documents incorporated by reference) was
corrected, (ii) such person was not sent or given a copy of the
Prospectus (excluding documents incorporated by reference) which
corrected the untrue statement or omission at or prior to the written
confirmation of the sale of such Securities to such person if required
by applicable law, and (iii) the Company satisfied its obligation
pursuant to Section 3(d) of this Agreement to provide a sufficient
number of copies of the Prospectus to the Underwriters.
24
(b) INDEMNIFICATION OF COMPANY, DIRECTORS AND OFFICERS. Each
Underwriter severally agrees 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 or Section 20
of the 1934 Act against any and all loss, liability, claim, damage and
expense described in the indemnity contained in subsection (a) of this
Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto), including the Rule
434 Information or the Rule 430A Information deemed to be a part
thereof, if applicable, or any preliminary prospectus 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 ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary
prospectus or the Prospectus (or any amendment or supplement thereto).
(c) ACTIONS AGAINST PARTIES; NOTIFICATION. Each indemnified
party shall give notice as promptly as reasonably practicable to each
indemnifying party of any action commenced against it in respect of
which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any
liability hereunder to the extent it is not materially prejudiced as a
result thereof and in any event shall not relieve it from any
liability which it may have otherwise than on account of this
indemnity agreement. In the case of parties indemnified pursuant to
Section 6(a) above, counsel to the indemnified parties shall be
selected by ▇▇▇▇▇▇▇ ▇▇▇▇▇, and, in the case of parties indemnified
pursuant to Section 6(b) above, counsel to the indemnified parties
shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any such action;
provided, however, that counsel to the indemnifying party shall not
(except with the consent of the indemnified party) also be counsel to
the indemnified party. In no event shall the indemnifying parties be
liable for fees and expenses of more than one counsel (in addition to
any local counsel) separate from their own counsel for all indemnified
parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same
general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle
or compromise or consent to the entry of any judgment with respect to
any litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or contribution could be sought under
this Section 6 or Section 7 hereof (whether or not the indemnified
parties are actual or potential parties thereto), unless such
settlement, compromise or consent (i) includes an unconditional
release of each indemnified party from all liability arising out of
such litigation, investigation, proceeding or claim and (ii) does not
include a statement as to or an admission of fault, culpability or a
failure to act by or on behalf of any indemnified party.
25
(d) SETTLEMENT WITHOUT CONSENT IF FAILURE TO REIMBURSE. If at
any time an indemnified party shall have requested an indemnifying
party to reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for
any settlement of the nature contemplated by Section 6(a)(2) effected
without its written consent if (i) such settlement is entered into
more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received
notice of the terms of such settlement at least 30 days prior to such
settlement being entered into and (iii) such indemnifying party shall
not have reimbursed such indemnified party in accordance with such
request prior to the date of such settlement.
SECTION 7. CONTRIBUTION. If the indemnification provided for in
Section 6 hereof is for any reason unavailable to or insufficient to
hold harmless an indemnified party in respect of any losses,
liabilities, claims, damages or expenses referred to therein, then
each indemnifying party shall contribute to the aggregate amount of
such losses, liabilities, claims, damages and expenses incurred by
such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company,
on the one hand, and the Underwriters, on the other hand, from the
offering of the Securities pursuant to this Agreement or (ii) if the
allocation provided by clause (i) is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault
of the Company, on the one hand, and the Underwriters, on the other
hand, in connection with the statements or omissions which resulted in
such losses, liabilities, claims, damages or expenses, as well as any
other relevant equitable considerations.
The relative benefits received by the Company, on the one hand,
and the Underwriters, on the other hand, in connection with the
offering of the Securities pursuant to this Agreement shall be deemed
to be in the same respective proportions as the total net proceeds
from the offering of the Securities pursuant to this Agreement (before
deducting expenses) received by the Company and the total underwriting
discount received by the Underwriters, in each case as set forth on
the cover of the Prospectus, or, if Rule 434 is used, the
corresponding location on the Term Sheet bear to the aggregate initial
public offering price of the Securities as set forth on such cover.
The relative fault of the Company, on the one hand, and the
Underwriters, on the other hand, shall be determined by reference to,
among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to state
a material fact relates to information supplied by the Company or by
the Underwriters and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or
omission.
The Company and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section 7 were
26
determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations
referred to above in this Section 7. The aggregate amount of losses,
liabilities, claims, damages and expenses incurred by an indemnified
party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever based
upon any such untrue or alleged untrue statement or omission or
alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter
shall be required to contribute any amount in excess of the amount by
which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the
amount of any damages which such Underwriter has otherwise been
required to pay by reason of any 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 1933 Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
For purposes of this Section 7, each person, if any, who controls
an Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution
as 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 or Section 20 of the 1934 Act shall have the same rights to
contribution as the Company. The Underwriters' respective obligations
to contribute pursuant to this Section 7 are several in proportion to
the principal amount of Securities set forth opposite their respective
names in Schedule A hereto and not joint.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. All representations, warranties and agreements contained in
this Agreement or in certificates of officers of the Company or any of
its subsidiaries 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 Securities to the
Underwriters.
SECTION 9. TERMINATION OF AGREEMENT.
(a) TERMINATION; GENERAL. The Representatives may terminate
this Agreement, by notice to the Company, at any time at or prior to
the Closing Time if (i) there has been, since the time of execution of
this Agreement or since the respective dates as of which information
27
is given in 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, or (ii) there has occurred any material adverse
change in the financial markets in the United States or any outbreak
of hostilities or escalation thereof or other calamity or crisis or
any change or development involving a prospective change in national
or international political, financial or economic conditions, in each
case the effect of which is such as to make it, in the judgment of the
Representatives, impracticable to market the Securities or to enforce
contracts for the sale of the Securities, or (iii) trading in any
securities of the Company has been suspended or materially limited by
the Commission or the New York Stock Exchange or the Chicago Stock
Exchange, or if trading generally on the New York Stock Exchange or
the American Stock Exchange or in the Nasdaq National Market has been
suspended or materially limited, or minimum or maximum prices for
trading have been fixed, or maximum ranges for prices have been
required, by either of said exchanges or by such system or by order of
the Commission, the NASD or any other governmental authority, or (iv)
a banking moratorium has been declared by either Federal or New York
authorities.
(b) LIABILITIES. If this Agreement is terminated pursuant to
this Section 9, such termination shall be without liability of any
party to any other party except as provided in Section 4 hereof, and
provided further that Sections 1, 6, 7 and 8 shall survive such
termination and remain in full force and effect.
SECTION 10. DEFAULT BY ONE OR MORE OF THE UNDERWRITERS. If one
or more of the Underwriters shall fail at the Closing Time to purchase
the Securities which it or they are obligated to purchase under this
Agreement (the "Defaulted Securities"), then 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
Securities 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 or aggregate principal amount, as the case may
be, of Defaulted Securities does not exceed 10% of the number or
aggregate principal amount, as the case may be, of Securities to be
purchased hereunder, 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 or aggregate principal amount, as the case may
be, of Defaulted Securities exceeds 10% of the number or aggregate
principal amount, as the case may be, of Securities to be purchased
28
hereunder, this Agreement shall terminate without liability on the
part of any non-defaulting Underwriter.
No action taken pursuant to this Section 10 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 the Closing Time for a period
not exceeding seven days in order to effect any required changes in
the Registration Statement or the Prospectus or in any other documents
or arrangements. As used herein, the term "Underwriter" includes any
person substituted for an Underwriter under this Section 10.
SECTION 11. NOTICES. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly
given if mailed or transmitted by any standard form of
telecommunication. Notices to the Underwriters shall be directed to
▇▇▇▇▇▇▇ ▇▇▇▇▇ at World Financial Center, New York, New York
10281-1201, attention of ▇▇▇▇ ▇▇▇▇▇▇▇▇▇; and notices to the Company
shall be directed to it at ▇▇▇▇▇ Industries, Inc., One ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Vice President and General Counsel, with a copy to ▇▇▇▇▇▇ ▇▇▇▇▇▇ &
▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attn: ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇.
SECTION 12. PARTIES. This Agreement shall inure to the benefit
of and be binding upon the Company, the Underwriters and their
respective successors. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any person, firm
or corporation, other than the 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 heirs and legal
representatives, any legal or equitable right, remedy or claim under
or in respect of this Agreement or any provision herein contained.
This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the Underwriters and the
Company and their respective successors, and said controlling persons
and officers and directors and their heirs and legal representatives,
and for the benefit of no other person, firm or corporation. No
purchaser of Securities from any Underwriter shall be deemed to be a
successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 14. EFFECT OF HEADINGS. The Article and Section
headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof,
29
whereupon this Agreement, along with all counterparts, will become a
binding agreement between the Underwriters and the Company in
accordance with its terms.
Very truly yours,
▇▇▇▇▇ INDUSTRIES, INC.
By: /s/ A.R. Sales
--------------------------
Name: A.R. Sales
-------------------
Title: Treasurer
------------------
CONFIRMED AND ACCEPTED,
as of the date first
above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
▇▇▇▇▇▇ BROTHERS INC.
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Authorized Signatory
For themselves and as Representatives of the other Underwriter named
in Schedule A hereto.
30
SCHEDULE A
Principal
Amount of
NAME OF UNDERWRITER SECURITIES
------------------- -------------
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇
& ▇▇▇▇▇ Incorporated $50,000,000
▇▇▇▇▇▇ Brothers Inc. $50,000,000
-------------
Total $100,000,000
=============
31
SCHEDULE B
▇▇▇▇▇ Industries, Inc.
$100,000,000 6.75% Notes due March 15, 2008
1. The initial public offering price of the Securities shall be
99.609% of the principal amount thereof, plus accrued interest, if
any, from the date of issuance.
2. The purchase price to be paid by the Underwriters for the
Securities shall be 98.959% of the principal amount thereof.
3. The interest rate on the Securities shall be 6.75% per
annum.