EXHIBIT 1.1
CLECO CORPORATION
Debt Securities
UNDERWRITING AGREEMENT
1. Introduction. Cleco Corporation, a Louisiana corporation (the
"Company"), proposes to issue and sell from time to time certain of its
unsecured debt securities registered under the registration statement referred
to in Section 2(a) hereof (the "Registered Securities"). The Registered
Securities will be issued under an indenture, dated as of May 1, 2000 (as
supplemented to the date hereof, the "Indenture"), between the Company and Bank
One, N.A., as trustee (the "Trustee"), in one or more series, which series may
vary as to interest rates, maturities, redemption provisions, selling prices and
other terms, with all such terms for any particular series of the Registered
Securities to be determined at or prior to the time of sale. Particular series
of the Registered Securities will be sold pursuant to a Terms Agreement as
described in Section 3 hereof, for resale in accordance with the terms of
offering determined at the time of sale.
The Registered Securities involved in any such offering are hereinafter
referred to as the "Offered Securities." The firm or firms which agree to
purchase the Offered Securities are hereinafter referred to as the
"Underwriters" of such securities, and the representative or representatives of
the Underwriters, if any, specified in a Terms Agreement referred to in Section
3 are hereinafter referred to as the "Representatives"; provided, however, that
if the Terms Agreement does not specify any representative of the Underwriters,
the term "Representatives," as used in this Agreement (other than in Sections
2(b), 5(h) and 6 and the second sentence of Section 3), shall mean the
Underwriters.
2. Representations and Warranties of the Company. The Company, as of the
date of each Terms Agreement referred to in Section 3, represents and warrants
to, and agrees with, each Underwriter that:
(a) The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-3 (No. 333-33098)
relating to the Registered Securities, including a prospectus, pursuant to
the Securities Act of 1933, as amended (the "Securities Act"), and such
registration statement has been declared effective by the Commission. No
stop order suspending the effectiveness of such registration statement has
been issued and no proceeding for that purpose has been initiated or, to
the best knowledge of the Company, threatened by the Commission. Such
registration statement, as amended at the time of any Terms Agreement
referred to in Section 3 and including any documents incorporated therein
by reference (but excluding any Form T-1), is referred to herein as the
"Registration Statement," and the prospectus and/or prospectus supplement
included in such Registration Statement, as supplemented as contemplated by
Section 3 to reflect the terms of the Offered Securities and the terms of
the offering thereof, as first filed with the Commission pursuant to and in
accordance with Rule 424(b) ("Rule 424(b)") under the Securities Act,
including all material
incorporated by reference therein, is referred to herein as the
"Prospectus." If it is contemplated, at the time a Terms Agreement relating
to the Offered Securities is executed, that a registration statement will
be filed pursuant to Rule 462(b) under the Securities Act prior to the
Closing Date (hereinafter defined), the term "Registration Statement" as
used herein includes such registration statement. The terms "supplement"
and "amendment" as used in this Agreement include, without limitation, all
documents filed by the Company with the Commission subsequent to the date
of the Prospectus that are deemed to be incorporated by reference in the
Prospectus.
(b) On the effective date of the Registration Statement relating to
the Registered Securities (or the most recent post-effective amendment
thereto), such Registration Statement conformed in all material respects to
the requirements of the Securities Act, the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"), and the rules and regulations of the
Commission (the "Rules and Regulations") and did not include any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading, and on the date of each Terms Agreement referred to in Section
3, (i) the Registration Statement will conform in all material respects to
the requirements of the Securities Act, the Trust Indenture Act and the
Rules and Regulations, and will not include any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and
(ii) the Prospectus will conform in all material respects to the
requirements of the Securities Act and the Rules and Regulations and will
not include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that the
foregoing does not apply to statements in or omissions from any of such
documents based upon written information furnished to the Company by any
Underwriter through the Representatives, if any, specifically for use
therein.
(c) Each document filed or to be filed pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and incorporated by
reference, or deemed to be incorporated by reference in the Prospectus
(including any document to be filed pursuant to the Exchange Act which will
constitute an amendment to the Prospectus) conformed or, when so filed,
will conform in all material respects to the requirements of the Exchange
Act and the applicable Rules and Regulations, and none of such documents
included or, when so filed, will include any untrue statement of a material
fact or omitted or, when so filed, will omit to state any material fact
required to be stated therein or necessary to make the statements therein
(and, in the case of a document filed after the effective date of the
Registration Statement and not treated as a post-effective amendment to the
Registration Statement for purposes of the liability provisions of the
Securities Act, in the light of the circumstances under which they were
made at the time of the filing of such document with the Commission) not
misleading.
(d) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Louisiana,
with power and
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authority to own its properties and conduct the business in which it is
engaged as described in the Prospectus.
(e) The Company has all necessary corporate power and authority to
execute and deliver the Terms Agreement (including the provisions of this
Agreement), the Offered Securities and any supplemental indenture or other
document required under the Indenture to establish the Offered Securities
thereunder (the "Supplemental Indenture") (collectively, the "Transaction
Documents") and to perform its obligations under the Indenture and the
Transaction Documents; and all corporate action required to be taken for
the due and proper authorization, execution and delivery of each of the
Transaction Documents and the consummation of the transactions contemplated
thereby have been duly and validly taken.
(f) The Terms Agreement (including the provisions of this Agreement)
has been duly authorized, executed and delivered by the Company.
(g) The Indenture has been duly authorized, executed and delivered by
the Company and, assuming due authorization, execution and delivery by the
Trustee, constitutes a valid and legally binding agreement of the Company,
and the Supplemental Indenture has been duly authorized by the Company and
when executed and delivered by the Company, assuming due authorization,
execution and delivery by the Trustee, will constitute a valid and legally
binding agreement of the Company, each enforceable against the Company in
accordance with its terms, except to the extent that such enforceability
may be limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors'
rights generally and by general equitable principles (whether considered in
a proceeding in equity or at law); and the Indenture has been duly
qualified under the Trust Indenture Act.
(h) The Offered Securities have been duly authorized by the Company
and, when duly executed, authenticated, issued and delivered as provided in
the Indenture and the Supplemental Indenture and paid for as provided in
the Terms Agreement (including the provisions of this Agreement), will be
duly and validly issued and will constitute valid and legally binding
obligations of the Company entitled to the benefits of the Indenture and
enforceable against the Company in accordance with their terms, except to
the extent that such enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws affecting creditors' rights generally and by general
equitable principles (whether considered in a proceeding in equity or at
law); and the Offered Securities, when so executed, authenticated, issued
and delivered, will conform in all material respects to the description
thereof contained in the Prospectus.
(i) The execution and delivery by the Company of each of the
Transaction Documents and the issuance, authentication, sale and delivery
of the Offered Securities will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of its
"Significant
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Subsidiaries" as that term is defined in Regulation S-X (hereinafter,
"Significant Subsidiaries") pursuant to, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument for borrowed money
to which the Company or any of its Significant Subsidiaries is a party or
by which the Company or any of its Significant Subsidiaries is bound or to
which any of the property or assets of the Company or any of its
Significant Subsidiaries is subject, nor will such actions result in any
violation of the provisions of the charter or by-laws of the Company or any
statute or any judgment, order, decree, rule or regulation of any court or
arbitrator or governmental agency or body having jurisdiction over the
Company or any of its Significant Subsidiaries or any of their properties
or assets, except as would not have, in any case, a material adverse effect
on the condition (financial or otherwise), results of operations or
business of the Company and its Significant Subsidiaries taken as a whole
(a "Material Adverse Effect"); and no consent, approval, authorization or
order of, or filing or registration with, any such court or arbitrator or
governmental agency or body under any such statute, judgment, order,
decree, rule or regulation is required for the execution, delivery and
performance by the Company of each of the Transaction Documents, the
issuance, authentication, sale and delivery of the Offered Securities and
compliance by the Company with the terms thereof and the consummation of
the transactions contemplated by the Transaction Documents, except for such
consents, approvals, authorizations or orders, filings, registrations or
qualifications (i) which shall have been obtained or made prior to the
Closing Date, and (ii) except to the extent that the failure to obtain such
consents, approvals, authorizations or orders, filings, registrations or
qualifications would not have a Material Adverse Effect.
(j) No statute, rule, regulation or order has been enacted, adopted or
issued by any governmental agency or body which prevents the issuance of
the Offered Securities or suspends the sale of the Offered Securities in
any jurisdiction and no injunction or restraining order by any federal or
state court of competent jurisdiction has been issued with respect to the
Company which would prevent or suspend the issuance or sale of the Offered
Securities or the use of the Prospectus in any jurisdiction.
(k) Based upon the timely filing by the Company with the Commission of
an exemption statement pursuant to Rule 2 under the Public Utility Holding
Company Act of 1935, as amended (the "1935 Act"), the Company is exempt
from regulation as a public utility holding company under the 1935 Act,
except with respect to the acquisition of certain voting securities of
other domestic public utility companies and utility holding companies.
3. Purchase and Offering of Offered Securities. The obligation of the
Underwriters to purchase the Offered Securities will be evidenced by an
agreement or exchange of other written communications ("Terms Agreement") at the
time the Company determines to sell the Offered Securities. The Terms Agreement
will incorporate by reference the provisions of this Agreement, except as
otherwise provided therein, and will specify the firm or firms which will be
Underwriters, the names of any Representatives, the principal amount to be
purchased by each Underwriter, the purchase price to be paid by the Underwriters
and the terms of the Offered Securities not already specified in the Indenture
(as supplemented by the Supplemental
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Indenture), including, but not limited to, interest rate, maturity, any
redemption provisions and any sinking fund requirements. The Terms Agreement
will also specify the time and date of delivery and payment (such time and date,
or such other time thereafter as the Representatives and the Company agree as
the time for payment and delivery, being herein and in the Terms Agreement
referred to as the "Closing Date"), the place of delivery and payment and any
details of the terms of offering that should be reflected in the prospectus
supplement relating to the offering of the Offered Securities. The obligations
of the Underwriters to purchase the Offered Securities will be several and not
joint. It is understood that the Underwriters propose to offer the Offered
Securities for sale as set forth in the Prospectus.
If the Terms Agreement specifies "Book-Entry Only" settlement or otherwise
states that the provisions of this paragraph shall apply, the Company will
deliver against payment of the purchase price the Offered Securities in the form
of one or more permanent global securities in definitive form ("Global
Securities") deposited with The Depository Trust Company ("DTC") or its
designated custodian and registered in the name of the DTC or its nominee.
Interests in any permanent Global Securities will be held only in book-entry
form through DTC, except in the limited circumstances described in the
Prospectus. Payment for the Offered Securities shall be made on the Closing Date
by the Underwriters in federal (same day) funds by wire transfer to an account
previously designated by the Company against delivery to DTC or its designated
custodian of the Global Securities representing all of the Offered Securities.
4. Covenants of the Company. The Company agrees with the several
Underwriters that, in connection with each offering of Offered Securities:
(a) The Company will furnish to the Representatives copies of the
Registration Statement, including all exhibits, any related preliminary
prospectus, any related preliminary prospectus supplement, the Prospectus
and all amendments and supplements to such documents, in each case as soon
as available and in such quantities as the Representatives reasonably
request.
(b) The Company will file the Prospectus with the Commission pursuant
to and in accordance with Rule 424(b) not later than the second business
day following the execution and delivery of the Terms Agreement.
(c) The Company will advise the Representatives promptly of any
proposal to amend or supplement the Registration Statement or the
Prospectus and will not effect any such amendment or supplement in a form
to which the Representatives shall reasonably object by notice to the
Company after a reasonable period to review; provided, however, that the
Company shall be permitted in any case to make all applicable filings under
the Exchange Act; and the Company will also advise the Representatives
promptly of the filing of any such amendment or supplement and of the
institution by the Commission of any stop order proceedings in respect of
the Registration Statement or of any part thereof and will use its best
efforts to prevent the issuance of any such stop order and to obtain as
soon as possible its lifting, if issued.
(d) The Company will pay all expenses incident to the performance of
its obligations under the Terms Agreement (including the provisions of this
Agreement), for
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any filing fees or other expenses (including fees and disbursements of
counsel) in connection with qualifying the Offered Securities for sale and
determination of their eligibility for investment under the laws of such
jurisdictions as the Representatives may designate and the printing of
memoranda relating thereto, for any fees charged by investment rating
agencies for the rating of the Offered Securities, for any travel expenses
of the Company's officers and employees and any other expenses of the
Company in connection with attending or hosting meetings with prospective
purchasers of Offered Securities and for expenses incurred in preparing,
printing and distributing the Prospectus, any preliminary prospectuses, any
preliminary prospectus supplements or any other amendments or supplements
to the Prospectus to the Underwriters. It is understood, however, that,
except as provided in this Section, and Sections 6 and 8 hereof, the
Underwriters will pay all of their own costs and expenses, including the
fees of their counsel and any advertising fees connected with any offers
they make.
(e) If, at any time when, in the reasonable opinion of counsel for the
Representatives, a prospectus relating to the Offered Securities is
required to be delivered under the Securities Act in connection with sales
by any Underwriter or dealer, any event relating to or affecting the
Company shall occur as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or omit
to state any material fact necessary to make the statements therein not
misleading in the light of the circumstances under which they were made, or
if it is necessary at any time to amend the Prospectus to comply with the
Securities Act, the Company will promptly notify the Representatives of
such event and will promptly prepare and file with the Commission, at its
own expense, an amendment or supplement that will correct such statement or
omission or an amendment that will effect such compliance.
(f) The Company will make generally available to its security holders
as soon as practicable an earnings statement of the Company covering a
12-month period beginning after the Closing Date which will satisfy the
provisions of Section 11(a) of the Securities Act and the Rules and
Regulations (including Rule 158).
(g) The Company will cooperate in good faith with the Representatives
in qualifying the Offered Securities for sale under the applicable
securities or "blue sky" laws of such jurisdictions as the Representatives
may designate; 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.
(h) The Company will apply the net proceeds from the sale of the
Offered Securities as set forth in the Prospectus under the heading "Use of
Proceeds."
5. Conditions of the Obligations of the Underwriters. The obligations of
the several Underwriters to purchase and pay for the Offered Securities shall be
subject to the accuracy of the representations and warranties of the Company
contained herein, to the performance by the Company of its obligations to be
performed hereunder and to the following additional conditions precedent:
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(a) The Prospectus shall have been filed with the Commission in accordance
with the Rules and Regulations and Section 4(b) of this Agreement. No stop order
suspending the effectiveness of the Registration Statement or any part thereof
shall be in effect and no proceedings for that purpose shall be pending before
or, to the knowledge of the Company or any Underwriter, threatened by, the
Commission.
(b) The Representatives, on behalf of the Underwriters, shall have received
an opinion, dated the Closing Date, of R. O'▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇., General Counsel
of the Company, to the effect that:
(i) The Company is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Louisiana and has all
power and authority necessary to own its properties and to conduct the
business in which it is engaged as described in the Prospectus.
(ii) The Company has all necessary corporate power and authority to
execute and deliver each of the Transaction Documents and to perform its
obligations thereunder; all corporate action required to be taken for the
due authorization, execution and delivery of each of the Transaction
Documents and the consummation of the transactions contemplated thereby
have been duly and validly taken; and the Terms Agreement (including the
provisions of this Agreement) has been duly authorized, executed and
delivered by the Company.
(iii) The Indenture has been duly authorized, executed and delivered
by the Company.
(iv) The Offered Securities have been duly executed and delivered by
the Company.
(v) The execution and delivery of each of the Transaction Documents
and the issuance and sale of the Offered Securities will not result in a
breach or violation of any of the terms and provisions of, or constitute a
default under, any Louisiana statute, rule, regulation or order of any
Louisiana governmental agency or body or any Louisiana court having
jurisdiction over the Company, any of its Significant Subsidiaries or their
respective properties, or the charter or by-laws of the Company or any of
its Significant Subsidiaries or, to such counsel's knowledge, any agreement
or instrument for borrowed money to which the Company or any of its
Significant Subsidiaries is bound or to which any of the properties of the
Company or any of its Significant Subsidiaries is subject, except in each
instance for such breach, violation or default that would not have a
Material Adverse Effect.
(vi) No approval, authorization, consent or order of any public
board, body or agency of the State of Louisiana is legally required for the
issuance and sale of the Offered Securities, or the performance by the
Company of its agreements in this Agreement or in the Indenture.
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(c) The Representatives, on behalf of the Underwriters, shall have received
an opinion, dated the Closing Date, of ▇▇▇▇▇ ▇▇▇▇▇ L.L.P., special counsel to
the Company, to the effect that:
(i) The Registration Statement has become effective under the
Securities Act and, to their knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or are pending or
threatened under the Securities Act; the Registration Statement and the
Prospectus (other than (i) the financial statements and schedules,
including the notes thereto, the accountants' report thereon and the
related summary of accounting policies, contained or incorporated by
reference therein, (ii) the other financial and statistical information
contained or incorporated by reference therein and (iii) the exhibits
thereto, as to which no opinion need be rendered) appear on their face to
comply as to form in all material respects with the requirements of Form
S-3, the related published Rules and Regulations and the Trust Indenture
Act.
(ii) They do not know of any contracts of a character required to be
described in the Registration Statement or Prospectus or to be filed or
incorporated by reference as exhibits to the Registration Statement which
are not described, filed or incorporated by reference as required.
(iii) Based upon the timely filing by the Company with the Commission
of an exemption statement pursuant to Rule 2 under the 1935 Act which, to
the best of such counsel's knowledge, is not the subject of any
notification provided for in Rule 6 under the 1935 Act, the Company is
exempt from regulation as a public utility holding company under the 1935
Act, except with respect to the acquisition of certain voting securities of
other domestic public utility companies and utility holding companies.
(iv) The Indenture has been duly qualified under the Trust Indenture
Act and, assuming the due execution and delivery thereof by the Trustee,
constitutes a valid and legally binding agreement of the Company
enforceable against the Company in accordance with its terms, except to the
extent that such enforceability may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws affecting creditors' rights generally and by general equitable
principles (whether considered in a proceeding in equity or at law).
(v) Assuming the due authentication of the Offered Securities by the
Trustee, the Offered Securities, upon payment and delivery in accordance
with the Terms Agreement (including the provisions of this Agreement),
constitute valid and legally binding obligations of the Company entitled to
the benefits of the Indenture and enforceable against the Company in
accordance with their terms, except to the extent that such enforceability
may be limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and
8
other similar laws affecting creditors' rights generally and by
general equitable principles (whether considered in a proceeding in
equity or at law).
(vi) The Offered Securities conform in all material respects to
the description thereof contained in the Prospectus.
(vii) To the best of such counsel's knowledge, there are no legal
proceedings pending or threatened against the Company of a character
which are required to be disclosed in the Registration Statement and
Prospectus which have not been disclosed therein or which question the
validity or enforceability of any of the Transaction Documents or the
Indenture or any action taken or to be taken pursuant thereto.
In giving such opinion, ▇▇▇▇▇ ▇▇▇▇▇ L.L.P. may rely as to matters of Louisiana
law upon the opinion of R. O'▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇., referred to above.
In addition, ▇▇▇▇▇ ▇▇▇▇▇ L.L.P. shall state that such counsel has
participated in conferences with officers and other representatives of the
Company, representatives of the independent public accountants of the Company,
representatives of the Underwriters and counsel to the Underwriters at which the
contents of the Registration Statement and the Prospectus were discussed and,
although such counsel did not independently verify such information and is not
passing upon and does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement and the Prospectus, on the basis of the foregoing (relying as to
materiality to a large extent upon officers and other representatives of the
Company), no facts came to such counsel's attention that led such counsel to
believe that the Registration Statement (other than the financial statements and
schedules, the notes thereto and the auditor's reports thereon, the other
financial, numerical, statistical and accounting data included or incorporated
by reference therein, or omitted therefrom, and the exhibits thereto, as to
which such counsel need express no belief) as of its effective date contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein not
misleading, or that the Prospectus (other than the financial statements, the
notes thereto and the auditor's report thereon and the other financial,
numerical, statistical and accounting data included or incorporated by reference
therein, or omitted therefrom, as to which such counsel need express no belief)
as of its issue date or as of the Closing Date included an untrue statement of a
material fact or omitted 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.
(d) The Representatives, on behalf of the Underwriters, shall have
received from counsel to the Underwriters such opinion or opinions, dated
the Closing Date, as the Representatives may require. In giving such
opinion, such counsel may rely as to matters of Louisiana law upon the
opinion of R. O'▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇., referred to above.
(e) On or prior to the date of the Terms Agreement, the
Representatives, on behalf of the Underwriters, shall have received a
letter, dated the date of delivery thereof, of PricewaterhouseCoopers LLP
confirming that they are independent public accountants
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within the meaning of the Securities Act and the applicable published Rules
and Regulations thereunder and stating to the effect that:
(i) in their opinion the audited financial statements and any
schedules reported on by them and included in the Prospectus comply as
to form in all material respects with the applicable accounting
requirements of the Securities Act and the Exchange Act and the
related published Rules and Regulations;
(ii) they have performed the procedures specified by the
American Institute of Certified Public Accountants for a review of
interim financial information as described in Statement of Auditing
Standards No. 71, Interim Financial Information, on any unaudited
financial statements included in the Registration Statement;
(iii) on the basis of the review referred to in clause (ii)
above, a reading of the latest available interim financial statements
of the Company, inquiries of officials of the Company who have
responsibility for financial and accounting matters and other
specified procedures, nothing came to their attention that caused them
to believe that:
(A) the unaudited financial statements, if any, included in
the Prospectus do not comply as to form in all material respects
with the applicable accounting requirements of the Exchange Act
and the related published Rules and Regulations or any material
modifications should be made to such unaudited financial
statements for them to be in conformity with generally accepted
accounting principles applied on a basis substantially consistent
with that of the audited financial statements included in the
Prospectus;
(B) if any unaudited "capsule" information is contained in
the Prospectus, the unaudited consolidated total revenues, net
income and net income per share amounts or other amounts
constituting such "capsule" information and described in such
letter do not agree with the corresponding amounts set forth in
the unaudited consolidated financial statements or were not
determined on a basis substantially consistent with that of the
corresponding amounts in the audited statements of income;
(C) at the date of the latest available balance sheet read
by such accountants, or at a subsequent specified date not more
than three business days prior to the date of the such letter,
there was any change in the capital stock or any increase in
long-term debt of the Company and its consolidated subsidiaries
or, at the date of the latest available balance sheet read by
such accountants, there was any decrease in consolidated net
current assets, as compared with amounts shown on the latest
balance sheet included in the Prospectus; or
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(D) for the period from the closing date of the latest
income statement included in the Prospectus to the closing date
of the latest available income statement read by such accountants
there were any decreases, as compared with the corresponding
period of the previous year in net sales, income from operations
or net income;
except in all cases set forth in clauses (C) and (D) above for
changes, increases or decreases that the Prospectus discloses
have occurred or may occur or which are described in such letter;
and
(iv) they have compared specified dollar amounts (or percentages
derived from such dollar amounts) and other financial information
included in the Prospectus (in each case to the extent that such
dollar amounts, percentages and other financial information are
derived from the general accounting records of the Company and its
subsidiaries subject to the internal controls of the Company's
accounting system or are derived directly from such records by
analysis or computation) with the results obtained from inquiries, a
reading of such general accounting records and other procedures
specified in such letter and have found such dollar amounts,
percentages and other financial information to be in agreement with
such results, except as otherwise specified in such letter.
All financial statements and schedules included in material
incorporated by reference into the Prospectus shall be deemed to be
included in the Prospectus for purposes of this subsection.
(f) The Representatives, on behalf of the Underwriters, shall have
received a letter, dated the Closing Date, of PricewaterhouseCoopers LLP to
the effect that such accountants reaffirm, as of the Closing Date and as
though made on the Closing Date, the statements made by the accountants in
the letter furnished pursuant to paragraph (e) of this Section 5, except
that the specified date referred to in such letter will be a date not more
than three days prior to the Closing Date for the purposes of this
Subsection.
(g) The Representatives, on behalf of the Underwriters, shall have
received a certificate, dated the Closing Date, of the President, the Chief
Financial Officer or the Treasurer of the Company in which such officer, to
the best of his or her knowledge after reasonable investigation, shall
state that the representations and warranties of the Company in this
Agreement are true and correct, that the Company has complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied hereunder at or prior to the Closing Date, that no stop order
suspending the effectiveness of the Registration Statement or of any part
thereof has been issued and no proceedings for that purpose have been
instituted or are contemplated by the Commission and that, subsequent to
the date of the most recent financial statements in the Prospectus, there
has been no material adverse change, nor any development involving a
prospective material adverse change, in the condition (financial or other),
business, properties or results of operations of the Company and its
subsidiaries taken as one enterprise except as set forth in or contemplated
by the Prospectus or as described in such certificate.
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(h) Subsequent to the execution of the Terms Agreement, there shall
not have occurred (i) any change, or any development involving a
prospective change, in the condition (financial or other), or in the
earnings, business affairs or business prospects, properties or results of
operations of the Company and its subsidiaries taken as one enterprise,
whether or not arising in the ordinary course of business, which, in the
judgment of a majority in interest of the Underwriters, including any
Representatives, is so material and adverse as to make it impracticable to
proceed with completion of the sale of and payment for the Offered
Securities; (ii) any downgrading in the rating of any debt securities of
the Company by any "nationally recognized statistical rating organization"
(as defined for purposes of Rule 436(g)(2) under the Securities Act) or any
public announcement by such nationally recognized statistical rating
organization that it has under surveillance or review, with possible
negative implications, its rating of any debt securities of the Company;
(iii) any material suspension or material limitation of trading in
securities generally on any national securities exchange or the Nasdaq
National Market, any setting of minimum or maximum prices or maximum ranges
for prices for trading on such exchange or any suspension of trading of any
securities of the Company on any such exchanges, by such system, order of
the Commission, the National Association of Securities Dealers, Inc. or any
other governmental authority or in the over-the-counter market or any
material disruption in commercial banking, securities settlement or
clearance services in the United States; (iv) any banking moratorium
declared by U.S. Federal or New York authorities; or (v) any outbreak or
escalation of major hostilities in which the United States is involved, any
declaration of war by Congress or any other substantial national or
international calamity or emergency if, in the judgment of a majority in
interest of the Underwriters, including any Representatives, the effect of
any such outbreak, escalation, declaration, calamity or emergency is so
material and adverse as to make it impracticable to proceed with completion
of the sale of and payment for the Offered Securities.
6. Indemnification and Contribution. (a) The Company will indemnify and
hold harmless each Underwriter, its partners, directors and officers and each
person, if any, who controls such Underwriter within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act, against any losses,
claims, damages or liabilities, joint or several, to which such Underwriter may
become subject, under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement, the Prospectus, or any amendment
or supplement thereto, or any related preliminary prospectus or preliminary
prospectus supplement, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse each
Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending or preparing to defend
against, or appearing as a third-party witness in connection with, any such
loss, claim, damage, liability or action as such expenses are incurred;
provided, however, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement in or omission or alleged
omission from any of such documents in reliance upon and in conformity with
written information furnished to the Company by any Underwriter
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through the Representatives, if any, specifically for use therein, it being
understood and agreed that the only such information furnished by any
Underwriter consists of the information described as such in the Terms
Agreement; and provided, further, that with respect to any untrue statement or
alleged untrue statement in or omission or alleged omission from any preliminary
prospectus or preliminary prospectus supplement the indemnity agreement
contained in this subsection (a) shall not inure to the benefit of any
Underwriter from whom the person asserting any such losses, claims, damages or
liabilities purchased the Offered Securities concerned, to the extent that a
prospectus supplement relating to such Offered Securities was required to be
delivered by such Underwriter under the Securities Act in connection with such
purchase and any such loss, claim, damage or liability of such Underwriter
arises out of or is based upon the fact that there was not sent or given to such
person, at or prior to the written confirmation of the sale of such Offered
Securities to such person, a copy of the Prospectus (exclusive of material
incorporated by reference). Anything in this paragraph to the contrary
notwithstanding, the Company shall not be liable for any settlement of any claim
or action effected without its written consent.
(b) Each Underwriter will severally and not jointly indemnify and hold
harmless the Company, its directors and officers and each person, if any,
who controls the Company within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act, against any losses, claims, damages
or liabilities to which the Company may become subject, under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon
(i) any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, the Prospectus, or any amendment
or supplement thereto, or any related preliminary prospectus or preliminary
prospectus supplement, or the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent, but only
to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity
with written information furnished to the Company by such Underwriter
through the Representatives, if any, specifically for use therein, it being
understood and agreed that the only such information furnished by any
Underwriter consists of the information described as such in the Terms
Agreement, or (ii) the failure of such Underwriter to send or give to a
purchaser of the Offered Securities, at or prior to the written
confirmation of the sale of such Offered Securities to such person, a copy
of the Prospectus (exclusive of material incorporated by reference) where
such delivery was required under the Securities Act, and will reimburse any
legal or other expenses reasonably incurred by the Company in connection
with investigating or defending any such loss, claim, damage, liability or
action as such expenses are incurred. Anything in this paragraph to the
contrary notwithstanding, no Underwriter shall be liable for any settlement
of any claim or action effected without the written consent of such
Underwriter.
(c) Promptly after receipt by an indemnified party under this Section
6 of notice of the commencement of any action for which such indemnified
party is entitled to indemnification under this Section 6, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 6, notify the
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indemnifying party of the commencement thereof in writing; but the omission
so to notify the indemnifying party will not relieve it from any liability
which it may have to any indemnified party otherwise than under subsection
(a) or (b) above. In case any such action is brought against any
indemnified party and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with counsel reasonably satisfactory to such indemnified party (who shall
not, except with the consent of the indemnified party, which consent shall
not be unreasonably withheld, be counsel to the indemnifying party), and
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party will not
be liable to such indemnified party under this Section for any legal or
other expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation. In no event shall the indemnifying party be liable for the
fees and expenses of more than one 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 party (which consent shall not be unreasonably
withheld), effect any settlement of any pending or threatened action in
respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party unless
such settlement includes an unconditional release of such indemnified party
from all liability on any claims that are the subject matter of such
action.
(d) If the indemnification provided for in this Section is unavailable
or insufficient to hold harmless an indemnified party under subsection (a)
or (b) above, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above
(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
from the offering of the Offered Securities or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company
on the one hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities 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 shall be deemed to be in the same proportion as
the total net proceeds from the offering (before deducting expenses)
received by the Company bear to the total underwriting discounts and
commissions received by the Underwriters. The relative fault shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company or the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission. The amount paid by an indemnified party as a result
of the losses, claims, damages or liabilities referred to in the first
sentence of this subsection (d) shall be deemed to include
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any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any action or claim which is
the subject of this subsection (d). Notwithstanding the provisions of this
subsection (d), no Underwriter shall be required to contribute any amount
in excess of the amount by which the total discounts and commissions
received by the Underwriters exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The Underwriters'
obligations in this subsection (d) to contribute are several in proportion
to their respective underwriting obligations and not joint.
(e) The obligations of the Company under this Section shall be in
addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Securities Act or the
Exchange Act; and the obligations of the Underwriters under this Section
shall be in addition to any liability which the respective Underwriters may
otherwise have and shall extend, upon the same terms and conditions, to
each director of the Company, to each officer of the Company who has signed
the Registration Statement and to each person, if any, who controls the
Company within the meaning of the Securities Act or the Exchange Act.
7. Default of Underwriters. If any Underwriter or Underwriters default in
their obligations to purchase Offered Securities under the Terms Agreement and
the aggregate principal amount of Offered Securities which such defaulting
Underwriter or Underwriters agreed but failed to purchase does not exceed 10% of
the total principal amount of Offered Securities, the Representatives may make
arrangements satisfactory to the Company for the purchase of such Offered
Securities by other persons, including any of the Underwriters, but if no such
arrangements are made by the Closing Date, the non-defaulting Underwriters shall
be obligated severally, in proportion to their respective commitments under the
Terms Agreement (including the provisions of this Agreement), to purchase the
Offered Securities that such defaulting Underwriters agreed but failed to
purchase. If any Underwriter or Underwriters so default and the aggregate
principal amount of Offered Securities with respect to which such default or
defaults occur exceeds 10% of the total principal amount of Offered Securities
and arrangements satisfactory to the Representatives and the Company for the
purchase of such Offered Securities by other persons are not made within 36
hours after such default, the Terms Agreement will terminate without liability
on the part of any non-defaulting Underwriter or the Company, except as provided
in Sections 6 and 8. As used in this Agreement, the term "Underwriter" includes
any person substituted for an Underwriter under this Section. Nothing herein
will relieve a defaulting Underwriter from liability for its default.
The foregoing obligations and agreements set forth in this Section will not
apply if the Terms Agreement specifies that such obligations and agreements will
not apply.
8. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Company or its officers and
15
of the several Underwriters set forth in or made pursuant to the Terms Agreement
(including the provisions of this Agreement) will remain in full force and
effect, regardless of any investigation, or statement as to the results thereof,
made by or on behalf of any Underwriter, the Company or any of their respective
representatives, officers or directors or any controlling person, and will
survive delivery of and payment for the Offered Securities. If the Terms
Agreement is terminated pursuant to Section 7 or if for any reason the purchase
of the Offered Securities by the Underwriters is not consummated, the respective
obligations of the Company and the Underwriters pursuant to Section 6 shall
remain in effect. If the purchase of the Offered Securities by the Underwriters
is not consummated for any reason other than solely because of the termination
of the Terms Agreement pursuant to Section 7 or the occurrence of any event
specified in clause (iii), (iv) or (v) of Section 5(h), the Company will
reimburse the Underwriters for all out-of-pocket expenses (including fees and
disbursements of counsel) reasonably incurred by them in connection with the
offering of the Offered Securities.
9. Notices. All communications hereunder shall be in writing and, if sent
to the Underwriters, shall be mailed, delivered or telecopied and confirmed to
the Representatives at the address furnished to the Company in writing for the
purpose of communications hereunder or, if sent to the Company, shall be mailed,
delivered or telecopied and confirmed to it at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Treasurer.
10. Parties. The Terms Agreement (including the provisions of this
Agreement) shall inure to the benefit of and be binding upon the Company and
such Underwriters as are identified in the Terms Agreement and their respective
successors and the partners, directors and officers referred to in Section 6,
and no other person will have any right or obligation hereunder.
11. Representation of Underwriters. Any Representatives will act for the
several Underwriters in connection with the offering described in the Terms
Agreement, and any action under such Terms Agreement (including the provisions
of this Agreement) taken by the Representatives will be binding upon all the
Underwriters.
12. Counterparts. The Terms Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
13. Applicable Law. This Agreement and the Terms Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York, without regard to principles of conflicts of laws.
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