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UNDERWRITING AGREEMENT
SERVICE CORPORATION INTERNATIONAL
Debt Securities
April 15, 1997
To the Underwriter or
Underwriters named in
the within mentioned
Terms Agreement
Ladies and Gentlemen:
Service Corporation International, a Texas corporation (the
"Company"), may issue and sell from time to time its debt securities,
consisting of (i) unsecured senior debt securities (the "Senior Debt
Securities"), (ii) unsecured senior subordinated debt securities (the "Senior
Subordinated Debt Securities") and (iii) subordinated debt securities (the
"Subordinated Debt Securities" and, together with the Senior Debt Securities
and the Senior Subordinated Debt Securities, the "Debt Securities"). The Debt
Securities are registered under the registration statement referred to in
Section 4(i) hereof. The Debt Securities may be issued in one or more series
and may have varying designations, denominations, interest rates and payment
dates, maturities, redemption provisions, conversion provisions, exchange
provisions and selling prices. The Senior Debt Securities will be issued under
an indenture (the "Senior Indenture") dated February 1, 1993 entered into
between the Company and The Bank of New York, as trustee (the "Senior
Trustee"). The Senior Subordinated Debt Securities will be issued under an
indenture (the "Senior Subordinated Indenture") to be entered into between the
Company and Texas Commerce Bank National Association, as trustee (the "Senior
Subordinated Trustee"). The Subordinated Debt Securities will be issued under
an indenture (as amended by the First Amendment thereto dated as of August 23,
1996, the "Subordinated Indenture" and, together with the Senior Indenture and
the Senior Subordinated Indenture, the "Indentures") dated September 1, 1991
between the Company and Texas Commerce Bank National Association, as trustee
(the "Subordinated Trustee" and, together with the Senior Trustee and the
Senior Subordinated Trustee, the "Trustees"). The Senior Subordinated Debt
Securities and
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the Subordinated Debt Securities may be convertible into shares of common
stock, par value $1.00 per share, of the Company (the "Common Stock"). The
basic provisions set forth herein are intended to be incorporated by reference
in a terms agreement of the type referred to below relating to, among other
things, the designation and series of Debt Securities and the aggregate
principal amount of Debt Securities (the "Underwritten Securities") to be
issued and sold by the Company pursuant thereto and to be purchased, severally,
by the underwriter or several underwriters named therein (the "Underwriters").
The Terms Agreement, which shall be in the form of Exhibit I hereto (the "Terms
Agreement"), relating to the Underwritten Securities and such additional
aggregate principal amount of Debt Securities that the Underwriters may be
granted an option to purchase by the Company to cover over-allotments in
connection with any offering of Underwritten Securities (the "Option
Securities" and together with the Underwritten Securities, the "Offered
Securities"), together with the provisions hereof incorporated therein by
reference (which provisions shall not become effective until so incorporated by
reference), is herein referred to as this "Agreement." The Terms Agreement may
reflect that a portion of the Underwritten Securities are to be sold to the
several U.S. underwriters named therein (the "U.S. Underwriters") in connection
with the offering and sale of a portion of the Underwritten Securities in the
United States and Canada (the "U.S. Underwritten Securities") to United States
and Canadian persons (as defined in the instruments governing the coordination
of the offering by the U.S. Underwriters and the International Managers (as
defined below) named therein) and that the balance of the Underwritten
Securities (the "International Underwritten Securities") are to be sold to the
several international managers named therein (the "International Managers") in
connection with the offering and sale of such International Underwritten
Securities outside the United States and Canada to persons other than United
States and Canadian persons. In such event, as used herein, the term
"Underwriters" refers to the U.S. Underwriters and the International Managers,
and the term "Representatives" refers to the U.S. Representatives named therein
of the U.S. Underwriters and the International Representatives named therein of
the International Managers. If the Underwriters consist only of the firm or
firms referred to in the Terms Agreement as the Representative or
Representatives, then the terms "Underwriters" and "Representatives," as used
herein, shall be deemed to refer to such firm or firms.
The obligations of the Underwriters to purchase, and the Company to
sell, the Offered Securities are evidenced by the Terms Agreement delivered at
the time the Company
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determines to sell the Offered Securities and, without the execution and
delivery of the Terms Agreement, the Company shall not be obligated to sell,
and the Underwriters shall not be obligated to purchase, any Debt Securities
pursuant to this Agreement. The Terms Agreement specifies the firm or firms
which will be Underwriters, the aggregate principal amount of the Offered
Securities to be purchased by each Underwriter, the purchase price to be paid
by the Underwriters for the Offered Securities, the public offering price, if
any, of the Offered Securities and any terms of the Offered Securities not
otherwise specified in the applicable Indenture (including, but not limited to,
designations, denominations, conversion or exchange provisions, covenants,
interest rates and payment dates, maturity, redemption provisions and sinking
fund requirements). The Terms Agreement specifies any details of the terms of
the offering that should be reflected in a post-effective amendment to the
applicable Registration Statement or the Prospectus Supplement (each as
hereinafter defined).
The terms which follow, when used in this Agreement, shall have the
meanings indicated. "Registration Statement" shall mean the registration
statement or registration statements relating to the Offered Securities (and
such other securities of the Company as may be included therein), which shall
be the registration statement on Form S-3 filed under the Securities Act of
1933, as amended (collectively with the rules and regulations of the Securities
and Exchange Commission (the "Commission") thereunder, the "Securities Act"),
referred to in Section 4(i) below, including all documents incorporated therein
by reference and all exhibits thereto, as from time to time amended or
supplemented pursuant to the Securities Act, the Securities Exchange Act of
1934, as amended (collectively with the rules and regulations of the Commission
thereunder, the "Exchange Act"), or otherwise, including as supplemented by the
Prospectus Supplement, on or prior to the date of execution and delivery of the
Terms Agreement (the "Representation Date") and, in the event any such
amendment or supplement is filed prior to the Closing Date (as defined in
Section 3 hereof), including by the filing of any Prospectus Supplement or
document incorporated by reference, shall also mean such registration statement
as so amended or supplemented. "Prospectus" shall mean the prospectus
(including the related Prospectus Supplement with respect to the Offered
Securities) relating to the Debt Securities (and such other securities of the
Company as may be covered thereby), including all documents incorporated
therein by reference, as from time to time amended or supplemented pursuant to
the Securities Act, the Exchange Act or otherwise; provided, however, that a
Prospectus Supplement shall
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be deemed to have supplemented the Prospectus only with respect to the Offered
Securities to which it relates. Any reference herein to the terms "amend,"
"amendment" or "supplement" with respect to the Registration Statement, any
preliminary prospectus or the Prospectus shall be deemed to refer to and
include the filing of any document under the Exchange Act after the effective
date of the Registration Statement, or the issue date of any preliminary
prospectus or the Prospectus, as the case may be, and on or prior to the
completion of the applicable offering (which shall be deemed to be not earlier
than such time as no Underwriter or dealer is required by law to deliver a
prospectus in connection with sales of the Offered Securities) and which is
deemed to be incorporated therein by reference.
1. Agreements to Sell and Purchase. The Company agrees to issue and
sell to each Underwriter as hereinafter provided, and each Underwriter, upon
the basis of the representations and warranties herein contained, but subject
to the conditions hereinafter stated, agrees to purchase at the purchase price
set forth in the Terms Agreement, severally and not jointly, from the Company
the respective aggregate principal amount of Underwritten Securities set forth
opposite the name of such Underwriter on the annex or annexes to Exhibit I
hereto (or such aggregate principal amount of Underwritten Securities, as the
case may be, increased as set forth in Section 9 hereof, subject to such
adjustments to eliminate any fractional Offered Securities as the
Representatives in their sole discretion may make).
If, pursuant to the Terms Agreement, the Company shall have granted
the option to the Underwriters to purchase Option Securities, the Company
agrees to sell to the Underwriters designated in the Terms Agreement to
purchase Option Securities (each an "Option Securities Underwriter" and
collectively, the "Option Securities Underwriters") the Option Securities, and
the Option Securities Underwriters shall have a one-time right to purchase,
severally and not jointly, the Option Securities on the terms set forth in the
Terms Agreement. Option Securities may be purchased as provided below solely
for the purpose of covering over-allotments made in connection with the
offering of the Underwritten Securities. If any Option Securities are to be
purchased, subject to the conditions hereinafter stated, each Option Securities
Underwriter agrees, severally and not jointly, to purchase the number of Option
Securities (subject to such adjustments to eliminate any fractional Offered
Securities as the Representatives designated in the Terms Agreement in their
sole discretion may make) that bears the same proportion to the total number of
Option Securities to
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be purchased as the number of Underwritten Securities set forth in the annex
or annexes to Exhibit I hereto opposite the name of such Option Securities
Underwriter bears to the total number of Underwritten Securities to be
purchased by all Option Securities Underwriters.
The Option Securities Underwriters may exercise the option to
purchase the Option Securities at any time on or before the thirtieth day
following the Representation Date, by written notice from the Representatives
designated in the Terms Agreement to the Company. Such notice shall set forth
the aggregate number of Option Securities as to which the option is being
exercised and the date and time when the Option Securities are to be delivered
and paid for, which may be the same date and time as the Closing Date (as
hereinafter defined) but shall not be earlier than the Closing Date nor later
than the tenth full Business Day (as hereinafter defined) after the date of
such notice (unless such time and date are postponed in accordance with the
provisions of Section 9 hereof). Such notice shall be given at least two
Business Days prior to the date and time of delivery specified therein.
2. Terms of Public Offering. The Company understands that the
Underwriters intend (i) to make a public offering of the Offered Securities as
soon after the Prospectus Supplement has been filed and the Terms Agreement has
been executed and delivered as in the judgment of the Representatives is
advisable and (ii) initially to offer the Offered Securities upon the terms set
forth in the Prospectus Supplement and the Underwriters will advise the Company
as to any alteration in the terms of such offering that would require, pursuant
to the Securities Act, any amendment or supplement to the Prospectus
Supplement.
3. Delivery of the Offered Securities and Payment Therefor. Payment
for the Offered Securities shall be made to the Company or to the Company's
order by wire transfer of immediately available funds in such location as the
Representatives shall designate in the Terms Agreement at, in the case of the
Underwritten Securities, such time and date as are specified in the Terms
Agreement, or at such other time on the same or such other date, not later than
the fifth Business Day (as hereinafter defined) thereafter, as the
Representatives and the Company may agree upon in writing or, in the case of
the Option Securities, on the date and at the time specified by the
Representatives designated in the Terms Agreement to exercise such option in
the written notice by such Representatives of the election to purchase such
Option Securities by the Option Securities
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Underwriters. The time and date of such payment for the Underwritten Securities
are referred to herein as the "Closing Date" and the time and date for such
payment for the Option Securities, if other than the Closing Date, are herein
referred to as the "Additional Closing Date." As used herein, the term
"Business Day" means any day other than a day on which banks are permitted or
required to be closed in New York City.
Payment for the Offered Securities to be purchased on the Closing
Date or the Additional Closing Date, as the case may be, shall be made against
delivery to the Representatives for the respective accounts of the several
Underwriters of the Offered Securities to be purchased on such date registered
in such names and in such denominations as the Representatives shall request in
writing not later than two full Business Days prior to the Closing Date or the
Additional Closing Date, as the case may be, with any transfer taxes payable in
connection with the transfer to the Underwriters of the Offered Securities duly
paid by the Company. The Company hereby agrees to pay any such transfer taxes.
The certificates for the Offered Securities will be made available for
inspection and packaging by the Representatives not later than 1:00 P.M., New
York City time, on the Business Day prior to the Closing Date or the Additional
Closing Date, as the case may be.
4. Representations and Warranties of the Company. The Company
represents and warrants to each Underwriter as of the Representation Date and
as of the Closing Date that:
(i) A registration statement on Form S-3 (Registration No.
333-10867), including a prospectus, with respect to the Debt Securities
(and such other securities of the Company as may be covered thereby), (i)
has been prepared by the Company in conformity with the requirements of
the Securities Act, (ii) has been filed with the Commission and (iii) has
become effective. Such Registration Statement and the related prospectus
may have been amended or supplemented from time to time prior to the
Representation Date; any such amendment to the applicable Registration
Statement was so prepared and filed and any such amendment has become
effective. A prospectus supplement (the "Prospectus Supplement"),
including a prospectus, relating to the Offered Securities has been
prepared. The Prospectus Supplement and, if not previously filed, such
prospectus will be filed pursuant to Rule 424 under the Securities Act. If
the offering of the Offered Securities is to be made by U.S. Underwriters
and International Managers, two such prospectus supplements, one
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relating to the Offered Securities to be sold by the U.S. Underwriters
and one relating to the Underwritten Securities to be sold by the
International Managers, and each identical to the other except for the
cover page, have been so prepared and filed. In such event, the term
"Prospectus Supplement" refers to such international and U.S. prospectus
supplements. Copies of such Registration Statement and the Prospectus
relating thereto, any such amendment or supplement, the Prospectus
Supplement and all documents incorporated by reference therein which were
filed with the Commission on or prior to the Representation Date
(including one fully executed copy of the Registration Statement and of
each amendment thereto for counsel for the Underwriters) have been
delivered to each of the Representatives. The Company has included in the
Registration Statement, as amended at the date the Registration Statement
was declared effective (the "Effective Date"), all information (other than
information relating specifically to the terms of any particular series of
Debt Securities and the offering thereof) required by the Securities Act
to be included in the Prospectus with respect to the Offered Securities
(and the Common Stock, if applicable) and the offering and sale thereof.
Except to the extent that the Underwriters shall agree in writing to a
modification, the Registration Statement and the Prospectus shall be in
all substantive respects in the form furnished to the Underwriters prior
to the Representation Date or, to the extent not completed at the
Representation Date, shall contain only such specific additional
information and other changes as the Company has advised the Underwriters,
a reasonable time prior to the Representation Date, is to be included or
made therein and as to which the Underwriters have not reasonably
objected.
(ii) The Registration Statement, at the time it became effective, any
post-effective amendment thereto, at the time it became effective, the
Registration Statement and the Prospectus, as of the Representation Date
and at the Closing Date, and any amendment or supplement thereto,
conformed or will conform in all material respects to the requirements of
the Securities Act and the Trust Indenture Act of 1939, as amended, and
the Rules and Regulations of the Commission thereunder (the "Trust
Indenture Act"); and no such document included or will include an untrue
statement of a material fact or omitted or will omit to state a material
fact required to be stated therein or necessary to make the statements
therein (in the case of the Prospectus, in the light of the circumstances
under which
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they were made) not misleading; provided, however, that the Company
makes no representation or warranty as to (a) information contained in or
omitted from the Registration Statement or the Prospectus in reliance upon
and in conformity with written information relating to any Underwriter
furnished to the Company by or on behalf of any Underwriter expressly for
use therein and (b) that part of the Registration Statement that
constitutes the Statement of Eligibility on Form T-1 of any of the
Trustees under the Trust Indenture Act filed as an exhibit to the
Registration Statement (the "Form T-1").
(iii) No order preventing or suspending the use of any preliminary
prospectus has been issued by the Commission.
(iv) (A) No stop order suspending the effectiveness of the
Registration Statement is in effect and no proceedings for that purpose
are pending before or threatened by the Commission and (B) each document,
if any, filed or to be filed pursuant to the Exchange Act and incorporated
by reference in the Prospectus complied or will comply when so filed in
all material respects with the Exchange Act and did not, or will not when
so filed, 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.
(v) Coopers & ▇▇▇▇▇▇▇ L.L.P., who are reporting upon the audited
financial statements and the supporting schedules of the Company included
or incorporated by reference in the Registration Statement and the
Prospectus, are independent public accountants within the meaning of the
Securities Act. The financial statements, and the related notes thereto,
included or incorporated by reference in the Registration Statement and
the Prospectus, present fairly the consolidated financial position of the
Company and its consolidated subsidiaries as of the dates indicated and
the results of their operations and the changes in their consolidated cash
flows for the periods specified; and said financial statements have been
prepared in conformity with United States generally accepted accounting
principles applied on a consistent basis, except as set forth therein, and
the supporting schedules included or incorporated by reference in the
Registration Statement present fairly the information required to be
stated therein. If pro forma financial information is included in or
incorporated by reference into the Registration Statement and the
Prospectus, such pro forma financial
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information (including, without limitation, the notes thereto) as of
the date presented (A) presented fairly in all material respects the
information shown therein, (B) was prepared in accordance with applicable
requirements of Regulation S-X promulgated under the Exchange Act, (C) was
prepared in accordance with the Commission's rules and guidelines with
respect to pro forma financial statements and (D) was properly computed on
the bases described therein. In the opinion of the Company, the
assumptions used in the preparation of any such pro forma financial
information (including, without limitation, the notes thereto) were fair
and reasonable and the adjustments used therein were appropriate to give
effect to the transactions or circumstances referred to therein. No pro
forma financial statements or other pro forma financial information is
required to be included or incorporated by reference in the Registration
Statement and the Prospectus other than those included or incorporated by
reference therein.
(vi) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the State of Texas, has the
corporate power and authority to own its property and to conduct its
business as described in the Registration Statement and the Prospectus and
to enter into this Agreement and the Terms Agreement, and is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that
the failure to be so qualified or be in good standing could not, singly or
in the aggregate, reasonably be expected to have a material adverse effect
on the condition (financial or otherwise), earnings, business affairs or
business prospects of the Company and its subsidiaries, taken as a whole
(each, a "Material Adverse Effect").
(vii) Each direct and indirect foreign and domestic subsidiary of the
Company listed on Schedule I hereto, which constitute all of the
significant subsidiaries of the Company within the meaning of Rule 1-02 of
Regulation S-X under the Exchange Act (each, a "Subsidiary" and
collectively, the "Subsidiaries") has been duly incorporated or organized,
is validly existing as a corporation or entity in good standing under the
laws of the jurisdiction of its incorporation or organization, has the
corporate or other power and authority to own its property and to conduct
its business as described in the Registration
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Statement and the Prospectus and is duly qualified to transact
business and is in good standing in each jurisdiction in which the conduct
of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so
incorporated, be in existence, have such power and authority, be so
qualified or be in good standing could not, singly or in the aggregate,
reasonably be expected to have a Material Adverse Effect. All of the
outstanding shares of capital stock of each Subsidiary have been duly
authorized and validly issued, are fully paid and nonassessable, and,
except as set forth in the Registration Statement and the Prospectus, are
owned by the Company, directly or indirectly, free and clear of all liens,
encumbrances, security interests (other than liens or encumbrances on or
security interests in the capital stock of Service Corporation
International PLC existing in connection with the $3.125 Term Convertible
Shares, Series A of SCI Finance LLC), claims and restrictions on
transferability and voting (other than any restrictions on transferability
as may arise under state and federal securities laws). Except as set forth
in the Registration Statement and the Prospectus, there are no outstanding
(i) securities or obligations convertible into or exchangeable or
exercisable for any shares of capital stock of, or other interest in, the
Company or any Subsidiary, (ii) rights, warrants or options to acquire or
purchase any shares of capital stock of, or other interest in, the Company
or any Subsidiary or any such convertible, exchangeable or exercisable
securities or obligations, or (iii) obligations or understandings to issue
or sell any shares of capital stock of, or other interest in, the Company
or any Subsidiary, any such convertible, exchangeable or exercisable
securities or obligations, or any such warrants, rights or options, except
as have been disclosed to the Underwriters in writing prior to the date
hereof and except for (A) issuances of shares of Common Stock and options
to acquire Common Stock after the date of the most recent information set
forth in the Registration Statement and the Prospectus pursuant to the
Company's employee benefit plans as in effect on the date hereof and (B)
issuances after the date of the most recent information set forth in the
Registration Statement and the Prospectus of convertible debentures of the
Company and Common Stock pursuant to the Company's Registration Statement
on Form S-4 (Registration No. 33-54996) and the Company's Registration
Statement on Form S-4 (Registration No. 333-01857) (together, the "S-4").
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(viii) There are no partnerships in which the Company or any of the
Subsidiaries has any direct or indirect controlling interest that would
constitute a significant subsidiary within the meaning of Rule 1-02 of
Regulation S-X under the Exchange Act. Except for the capital stock of the
Subsidiaries and except as set forth in the Registration Statement and the
Prospectus, the Company does not own, directly or indirectly, any shares
of stock or any other equity or long-term debt securities or have any
equity interest in any firm, partnership, joint venture or other entity.
(ix) This Agreement and the Terms Agreement have been duly and
validly authorized, executed and delivered by the Company.
(x) Since the date of the latest consolidated financial statements of
the Company and its subsidiaries included in the Registration Statement
and the Prospectus, except as set forth in or expressly contemplated by
the Registration Statement and the Prospectus, there has not been (A) any
change in the Company's issued capital stock or options, except (I)
pursuant to the exercise of options or the conversion or exchange of
outstanding convertible or exchangeable securities of the Company or any
of its subsidiaries, (II) issuances of shares of Common Stock and options
to acquire Common Stock issued after the date of such financial statements
pursuant to the Company's employee benefit plans as in effect on the date
hereof and (III) issuances after the date of such financial statements of
convertible debentures of the Company and Common Stock pursuant to the
S-4, or (B) any material adverse change in the management, condition
(financial or otherwise), earnings, business affairs or business prospects
of the Company and its subsidiaries, taken as a whole (each, a "Material
Adverse Change," and any event or state of facts which could, singly or in
the aggregate, reasonably be expected to result in a Material Adverse
Change is herein referred to as a "Prospective Material Adverse Change"),
whether or not arising from transactions or events occurring in the
ordinary course of business.
(xi) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as set forth
therein, (A) there have been no transactions or contracts (written or
oral) entered into or agreed to be entered into by the Company or any of
the Subsidiaries (other than those in the ordinary course
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of business) which are material to the Company and its subsidiaries,
taken as a whole and (B) there has been no dividend or distribution of any
kind declared, paid or made by the Company on any class of its capital
stock, other than regularly scheduled quarterly dividends in accordance
with the past practice of the Company.
(xii) If the Prospectus contains a section entitled "Capitalization,"
as of the date of the Prospectus Supplement, the Company has the
authorized, issued and outstanding capitalization set forth in the
Prospectus under "Capitalization." The authorized capital stock of the
Company (including, without limitation, the Common Stock issuable upon
conversion or exchange of the Offered Securities, if applicable) conforms
as to legal matters to the description thereof contained in the
Registration Statement and the Prospectus, and all of the outstanding
shares of capital stock of the Company have been duly authorized and
validly issued, are fully paid and nonassessable and are not subject to
any preemptive or similar rights. The rights agreement dated as of July
18, 1988 between the Company and Texas Commerce Bank National Association
as rights agent, as amended to date (the "Rights Agreement"), has been
duly authorized, executed and delivered by the Company; the rights (the
"Rights") to purchase the Company's Series C Junior Participating
Preferred Stock (the "Series C Preferred Stock") outstanding thereunder
and, if the Offered Securities are convertible into shares of Common
Stock, to be issued upon issuance of the Common Stock upon conversion of
such Offered Securities, have been duly authorized; the Series C Preferred
Stock to be issued upon exercise of the Rights has been duly authorized;
and the description of the Rights Agreement and the Rights set forth in
the Registration Statement and the Prospectus is accurate in all material
respects.
(xiii) All corporate action required to be taken for the
authorization, issuance and sale of the Offered Securities pursuant to
this Agreement and the Terms Agreement has been validly and sufficiently
taken. The Offered Securities, when executed by the Company and
authenticated by the applicable Trustee in accordance with the terms of
the applicable Indenture (assuming the due authorization, execution and
delivery of such Indenture by the Trustee thereunder), and delivered to
and paid for by the Underwriters in accordance with the terms of this
Agreement and the Terms Agreement and the applicable Indenture (assuming
the due authorization, execution and delivery thereof by
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the Trustee thereunder), will constitute the valid and binding
obligations of the Company entitled to the benefits of the applicable
Indenture and enforceable against the Company in accordance with their
terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium and similar laws affecting creditors' rights and remedies
generally and subject to general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law). The
Company has all the requisite corporate power and authority to execute and
deliver the applicable Indenture and any supplemental indenture to such
Indenture relating to the Offered Securities (the "Supplemental
Indenture") and to incur and perform its obligations provided for therein.
Each of the Indenture and the Supplemental Indenture relating to the
Offered Securities, when executed by the Company and the Trustee
thereunder (assuming the due authorization, execution and delivery of such
Indenture and Supplemental Indenture by the Trustee thereunder), will
constitute the valid and binding obligations of the Company enforceable
against the Company in accordance with their terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally and subject to general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law). If the Offered Securities are convertible
into Common Stock, the Offered Securities are convertible into Common
Stock in accordance with their terms and the terms of the applicable
Supplemental Indenture relating to the Offered Securities.
(xiv) If the Offered Securities are convertible into Common Stock,
the Common Stock issuable upon conversion of the Offered Securities
pursuant to the terms of the Supplemental Indenture has been duly
authorized and validly reserved for issuance upon such conversion by all
necessary corporate action and such Common Stock, when duly issued upon
such conversion will be validly issued and fully paid and nonassessable;
no holder thereof will be subject to personal liability solely by reason
of being such a holder; and the issuance of such Common Stock upon such
conversion will not be subject to preemptive rights.
(xv) The Offered Securities and the Indenture and Supplemental
Indenture relating thereto conform in all material respects to the
descriptions thereof in the Prospectus.
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(xvi) The execution and delivery by the Company of, and the full and
timely performance by the Company of its obligations under, this Agreement
and the Terms Agreement, the Indenture relating to the Offered Securities,
the Supplemental Indenture relating to the Offered Securities and the
Offered Securities, the compliance by the Company with the terms thereof,
and the consummation of each of the transactions contemplated herein and
therein, (A) have been duly authorized by all necessary corporate action
on the part of the Company, (B) do not and will not result in any
violation of the articles of incorporation or by-laws of the Company and
(C) do not and will not conflict with, or result in a breach or violation
of, any of the terms or provisions of, or constitute a default (or an
event which, with notice or lapse of time, or both, would constitute a
default) under, or give rise to any right to accelerate the maturity or
require the prepayment of any indebtedness under, or result in the
creation or imposition of any lien, charge or encumbrance upon any
material property or assets of the Company or of any Subsidiary under (I)
any indenture, mortgage, loan agreement, note, lease, license, partnership
agreement, franchise agreement or other agreement or instrument to which
the Company or any Subsidiary is a party or by which any of them may be
bound or affected or to which any of their respective properties or assets
may be subject (each, a "Contract" and collectively, the "Contracts"),
other than any such conflict, breach, default, acceleration, prepayment,
lien, charge or encumbrance that, could not individually or in the
aggregate, reasonably be expected to result in any Material Adverse
Effect, (II) any existing applicable law, rule or regulation (other than
the securities or Blue Sky laws of the various states and other
jurisdictions of the United States of America) or (III) any judgment,
order or decree of any government, governmental instrumentality or court,
domestic or foreign, having jurisdiction over the Company or any
Subsidiary or any of their respective properties or assets.
(xvii) No authorization, approval, consent or license of, or filing
with, any government, governmental instrumentality or court, domestic or
foreign (other than as have been made and obtained and are in full force
and effect under the Securities Act and the Trust Indenture Act or as may
be required under the securities or Blue Sky laws of the various states
and other jurisdictions of the United States of America) is required for
the valid authorization, issuance, sale and delivery of the Offered
15
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Securities by the Company, the execution and delivery by the Company
of, or the full and timely performance by the Company of each of its
obligations under, this Agreement, the Terms Agreement, the Indenture
relating to the Offered Securities, the Supplemental Indenture relating to
the Offered Securities, and the compliance by the Company with its
obligations thereunder.
(xviii) There are no contracts or other documents that are required
to be described in the Registration Statement or the Prospectus or to be
filed or incorporated by reference as exhibits to the Registration
Statement that are not described, filed or incorporated as required.
(xix) No holder of any securities of the Company has any rights, not
effectively satisfied or waived, to require the Company to register the
sale of any securities under the Securities Act in connection with the
filing of the Registration Statement or the consummation of the
transactions contemplated therein or pursuant to this Agreement or the
Terms Agreement.
(xx) The Company and its subsidiaries are in compliance with any and
all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health, or the environment or imposing
liability or standards of conduct concerning Hazardous Material
(collectively, "Environmental Laws"), except where such noncompliance with
Environmental Laws could not, singly or in the aggregate, reasonably be
expected to have a Material Adverse Effect. The term "Hazardous Material"
means (i) any "hazardous substance" as defined by the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as
amended, (ii) any "hazardous waste" as defined by the Resource
Conservation and Recovery Act, as amended, (iii) any petroleum or
petroleum product, (iv) any polychlorinated biphenyl and (v) any pollutant
or contaminant or hazardous, dangerous, or toxic chemical, material, waste
or substance regulated under or within the meaning of any other
Environmental Law.
(xxi) Each of the Company and each of its subsidiaries owns,
possesses or has obtained all licenses, permits, certificates, consents,
orders, approvals and other authorizations from, and has made all
declarations and filings with, all federal, state, local and other
governmental authorities (including foreign regulatory agencies), all
self-regulatory organizations and all courts
16
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and other tribunals, domestic or foreign, necessary to own or lease,
as the case may be, and to operate its properties and to carry on its
business as conducted as of the date hereof, except in each case where the
failure to obtain licenses, permits, certificates, consents, orders,
approvals and other authorizations, or to make all declarations and
filings, could not, singly or in the aggregate, reasonably be expected to
have a Material Adverse Effect, and neither the Company nor any such
subsidiary has received any notice of any proceeding relating to
revocation or modification of any such license, permit, certificate,
consent, order, approval or other authorization, except as described in
the Registration Statement and the Prospectus and except, in each case,
where such revocation or modification could not, reasonably be expected to
singly or in the aggregate, have a Material Adverse Effect; and the
Company and each of its subsidiaries are in compliance with all laws and
regulations relating to the conduct of their respective businesses as
conducted as set forth in the Registration Statement and the Prospectus,
except where noncompliance with such laws or regulations could not, singly
or in the aggregate, reasonably be expected to have a Material Adverse
Effect.
(xxii) To the best knowledge of the Company, each of the Company and
each of its subsidiaries owns or possesses the patents, patent licenses,
trademarks, service marks, trade names, copyrights and know-how (including
trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures) (collectively, the
"Intellectual Property") reasonably necessary to carry on the business
conducted by each as conducted on the date hereof, except to the extent
that the failure to own or possess such Intellectual Property could not,
singly or in the aggregate, reasonably be expected to have a Material
Adverse Effect, and, except as set forth in the Registration Statement and
the Prospectus, neither the Company nor any Subsidiary has received any
notice of infringement of or conflict with asserted rights of others with
respect to any Intellectual Property, except for notices the content of
which if accurate could not, singly or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(xxiii) Except as set forth in the Registration Statement and the
Prospectus, no authorization, approval or consent of any governmental
authority or agency is required (other than those which have already been
obtained)
17
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under the laws of any jurisdiction in which the Company or any of the
Subsidiaries conduct their respective businesses in connection with the
ownership by the Company of capital stock of any Subsidiary, any foreign
exchange controls or the repatriation of any amount from or to the Company
and the Subsidiaries, except to the extent such authorizations, approvals
or consents have been obtained and are in full force and effect and except
to the extent that the failure to obtain such authorization, approval or
consent could not, singly or in the aggregate, reasonably be expected to
have a Material Adverse Effect.
(xxiv) 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
Offered Securities (or the Common Stock, if applicable), and the Company
has not distributed and will not distribute any prospectus or other
offering material in connection with the offering and sale of the Offered
Securities other than any preliminary prospectus filed with the Commission
or the Prospectus or other materials permitted under the Securities Act.
(xxv) Except as set forth in the Registration Statement and the
Prospectus, there is no action, suit or proceeding before or by any
government, governmental or regulatory instrumentality, agency or body or
court, domestic or foreign, or any arbitrator, now pending or, to the best
knowledge of the Company, threatened, against or affecting the Company or
any subsidiary of the Company or any affiliate of the Company that, singly
or in the aggregate with all such actions, suits and proceedings (i) could
reasonably be expected to have a Material Adverse Effect or could
reasonably be expected to have a material adverse effect on the
consummation of the transactions contemplated by this Agreement and the
Terms Agreement or (ii) is required to be described in the Registration
Statement or the Prospectus that is not so described.
(xxvi) Neither the Company nor any subsidiary of the Company (i) is
in violation of its articles of incorporation, by-laws or other
organizational documents or (ii) is or with the giving of notice or lapse
of time or both would be in violation of, or in breach of or in default
under or in the performance or observance of, any obligation, agreement,
covenant or condition contained in this Agreement, the Terms Agreement or
any Contract or of any
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permit, order, decree, judgment, statute, rule or regulation, foreign
or domestic, applicable to the Company or any Subsidiary, except for such
violations, breaches or defaults that, could not singly or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
(xxvii) The Company is not an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended or a holding company or a
subsidiary of a holding company under the Public Utility Holding Company
Act of 1935.
(xxviii) The Company has complied with all provisions of Section
517.075, Florida Statutes (Chapter 92-1933 8, Laws of Florida).
(xxix) The statistical and market-related data included or
incorporated by reference in the Registration Statement and the Prospectus
are based on or derived from sources which the Company believes to be
reliable and accurate or represent the Company's good faith estimates that
are made on the basis of data derived from such sources.
(xxx) The Company knows of no outstanding claims for services, either
in the nature of a finder's fee or origination fee, with respect to the
transactions contemplated hereby and by the Terms Agreement, other than
the underwriting fees and compensation to be paid to the Underwriters in
accordance with this Agreement.
(xxxi) No labor disputes exist with employees of the Company or of
the Subsidiaries that could, singly or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
Any certificate signed by any officer of the Company and delivered to
the Underwriters or to counsel for the Underwriters shall be deemed a
representation and warranty by the Company to each Underwriter as to the
matters covered thereby.
5. Agreements of the Company. The Company covenants and agrees with
each Underwriter as follows:
(a) To use its reasonable best efforts to cause any amendment to the
Registration Statement to become effective at the earliest possible time.
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(b) To furnish to each of the Representatives, without charge, as
many signed copies of the Registration Statement (as originally filed) and
each amendment thereto and each document incorporated or deemed
incorporated therein, in each case including exhibits filed therewith or
incorporated therein, as the Representatives may reasonably request, and
to each other Underwriter a conformed copy of the Registration Statement
(as originally filed) and each amendment thereto, in each case without
exhibits and, during the period mentioned in paragraph (e) below, to each
of the Underwriters as many copies of the Prospectus (including all
amendments and supplements thereto and documents incorporated by reference
therein) as the Representatives may reasonably request.
(c) To give the Underwriters prompt notice of the Company's intention
to file or prepare any amendment to the Registration Statement or any
amendment or supplement to the Prospectus, whether pursuant to the
Securities Act, the Exchange Act or otherwise, to furnish the Underwriters
and their counsel with copies of any such amendment or supplement a
reasonable amount of time prior to such proposed filing or use, as the
case may be, and not to file any such amendment or supplement or use any
such prospectus to which the Underwriters or counsel for the Underwriters
shall object. Subject to the foregoing sentence, the Company will cause
each Prospectus Supplement relating to the Offered Securities to be filed
with the Commission pursuant to the applicable paragraph of Rule 424 under
the Securities Act within the time period prescribed and will provide
evidence satisfactory to the Underwriters of such timely filing.
(d) To advise the Representatives and their counsel promptly, and to
confirm such advice in writing, (i) when any Prospectus Supplement
relating to the Offered Securities shall have been filed with the
Commission pursuant to Rule 424 under the Securities Act, (ii) when, prior
to the termination of the offering of the Offered Securities, any
amendment to the Registration Statement shall have been filed with the
Commission or become effective, (iii) of the receipt of any comments from
the Commission or of any request by the Commission for any amendment to
the Registration Statement or any amendment or supplement to the
Prospectus or for any additional information, (iv) of 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 Prospectus
20
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or Prospectus Supplement or the initiation or threatening of any
proceeding for that purpose and (v) of the receipt by the Company of any
notification with respect to any suspension of the qualification of the
Offered Securities for offer and sale in any jurisdiction or the
initiation of any proceeding for such purpose; and to use its reasonable
best efforts to prevent the issuance of any such stop order or
notification and, if issued, to obtain as soon as possible the withdrawal
thereof.
(e) If, during such period after the first date of the public
offering of the Offered Securities as in the opinion of the Underwriters'
counsel a prospectus relating to the Offered Securities is required by law
to be delivered in connection with sales by an Underwriter or dealer, any
event shall occur, information shall become known or condition exist as a
result of which it is necessary or advisable to amend or supplement the
Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if it is necessary or advisable to amend or supplement the
Prospectus to comply with law, forthwith, at the sole expense of the
Company, to prepare, and, subject to Section 5(c) above, file with the
Commission and furnish, without charge, to the Underwriters and to the
dealers (whose names and addresses the Representatives will furnish to the
Company) to which Offered Securities may have been sold by the
Representatives on behalf of the Underwriters and to any other dealers,
upon request, such amendments or supplements to the Prospectus as may be
necessary so that the statements in the Prospectus as so amended or
supplemented will not, in the light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus will comply with law.
(f) To endeavor to qualify the Offered Securities (and, if
applicable, the Common Stock) for offer and sale under the securities or
Blue Sky laws of such jurisdictions as the Representatives shall request
and to continue such qualification in effect so long as required for
distribution of the Offered Securities and to pay all fees and expenses
(including fees and disbursements of counsel to the Underwriters) incurred
in connection with such qualification; provided, however, that the Company
shall not be required to file a general consent to service of process in
any jurisdiction or subject itself to general taxation in any
jurisdiction.
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(g) To make generally available to its security holders and to the
Representatives as soon as practicable, but not later than 15 months after
the date of each Terms Agreement, an earnings statement, covering a period
of at least 12 months beginning after the later of (i) the effective date
of the Registration Statement, (ii) the effective date of the most recent
post-effective amendment to the Registration Statement to become effective
prior to the date of such Terms Agreement and (iii) the date of the
Company's most recent Annual Report on Form 10-K filed with the Commission
prior to the date of such Terms Agreement, which will satisfy the
provisions of Rule 158 under the Securities Act and Section 11(a) of the
Securities Act.
(h) For a period of 90 days after the Representation Date, without
the prior written consent of the Representative designated in the Terms
Agreement, not to, and not cause or permit any subsidiary of the Company
to, directly or indirectly, effect any offer, sale or other disposition
of, or registration of, any Debt Securities or any other long term debt,
notes or debentures of or guaranteed by the Company or any of its
subsidiaries or any securities convertible into or exchangeable or
exercisable for Debt Securities or any such long-term debt, notes or
debentures, other than the Offered Securities to be sold pursuant to the
Terms Agreement and other than pursuant to such other exceptions, if any,
as are agreed to by the Representatives and set forth in the Terms
Agreement. If the Offered Securities are convertible into Common Stock,
during a period of 90 days from the Representation Date, the Company will
not, without the prior written consent of the Representative designated in
the Terms Agreement, directly or indirectly, effect any offer, sale or
other disposition of, or registration of, shares of Common Stock or any
right to purchase or other security convertible into or exchangeable or
exercisable for or any securities of the Company substantially similar to
any such shares, other than (A) the Offered Securities to be sold pursuant
to the Terms Agreement, (B) shares of Common Stock issued upon conversion,
exercise or exchange of convertible, exchangeable or exercisable
securities of the Company or of any subsidiary of the Company outstanding
on the Representation Date and (C) shares of Common Stock and options
thereunder issued pursuant to employee benefit plans of the Company in
place on the Representation Date as in effect on the Representation Date,
and other than pursuant
22
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to such other exceptions, if any, as are agreed to by the
Representatives and set forth in the Terms Agreement.
(i) Whether or not the transactions contemplated hereby or by the
Terms Agreement are consummated or this Agreement is terminated or shall
not become effective, to pay all costs and expenses incident or relating
to the performance of the Company's obligations hereunder, including,
without limiting the generality of the foregoing, all costs and expenses
(i) incurred in connection with the preparation, issuance, execution and
delivery of the Offered Securities (including, if applicable, the Common
Stock issuable upon conversion thereof), (ii) incurred in connection with
the preparation, printing and filing under the Securities Act and the
Exchange Act of the Registration Statement, the Prospectus, any
preliminary prospectus and each Prospectus Supplement (including in each
case all exhibits, amendments and supplements thereto and all documents
incorporated therein by reference), (iii) incurred in connection with the
registration or qualification of the Offered Securities (including, if
applicable, the Common Stock issuable upon conversion or exchange thereof)
under the laws of such jurisdictions as the Representatives may request
(including filing fees and the fees of counsel for the Underwriters and
their disbursements), (iv) relating to any filing with the National
Association of Securities Dealers, Inc. (the "NASD") in connection with
the offering of the Offered Securities, (v) incurred in connection with
the engagement of any qualified independent underwriter as may be required
by NASD rules and regulations, (vi) incurred in connection with the rating
of the Offered Securities, (vii) incurred in connection with advertising
relating to the Offered Securities approved by the Company (which approval
shall not be unreasonably withheld or delayed), (viii) relating to the
fees and expenses of the applicable Trustee, including the fees and
expenses of counsel to the applicable Trustee, and of the transfer agent
and registrar for the Common Stock if the Offered Securities are
convertible into the Common Stock and (ix) relating to or in connection
with the printing (including word processing and duplication costs) and
delivery of this Agreement, the Terms Agreement, the Indenture relating to
the Offered Securities, any Supplemental Indenture relating thereto, the
agreement among underwriters, each other document or instrument relating
to the underwriting arrangements and the coordination of the offering of
the Offered Securities by the U.S. Underwriters and the International
Managers, if applicable, any
23
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dealer agreements, the Preliminary and Supplemental Blue Sky Memoranda and
the furnishing to the Underwriters and dealers of copies of the
Registration Statement, the Prospectus and each Prospectus Supplement,
including mailing and shipping, as herein provided.
(j) To furnish to the Representatives for a period of five years
after the Representation Date copies of all reports or other
communications (financial or other) furnished to holders of the Company's
capital stock, and copies of any reports and financial statements
furnished to or filed with the Commission.
(k) To use the net proceeds of the offering of the Offered Securities
as set forth in the Prospectus Supplement under the caption "Use of
Proceeds."
(l) During the period when the Prospectus is required to be delivered
under the Securities Act or the Exchange Act in connection with sales
(including resales) of the Offered Securities, to file all documents
required to be filed with the Commission pursuant to Section 13, 14 or 15
of the Exchange Act within the time period required by the Exchange Act
and the Exchange Act Regulations.
(m) If the Offered Securities are convertible into Common Stock, the
Company will use its best efforts to effect the listing of the shares of
Common Stock issuable upon conversion of the Offered Securities on the New
York Stock Exchange on the Representation Date.
(n) To reserve and keep available at all times, free of preemptive
rights, sufficient shares of Common Stock to satisfy any obligations to
issue shares of Common Stock upon conversion of all of the Offered
Securities that are convertible into the Common Stock.
(o) To deliver copies of the Prospectus to such place or places as
shall be designated by the Representatives not later than 1:00 p.m., New
York City time, on the day after the date of the Terms Agreement.
6. Conditions of Underwriters' Obligations. The several obligations
of the Underwriters hereunder to purchase the Underwritten Securities are
subject to the following conditions:
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(a) If any amendment to the Registration Statement filed prior to the
Closing Date has not been declared effective as of the Representation
Date, such amendment shall have become effective not later than 5:30 P.M.,
New York City time, on the Representation Date; and at the Closing Date no
stop order suspending the effectiveness of the Registration Statement
shall have been issued under the Securities Act or proceedings therefor
initiated or threatened by the Commission. The price of the Offered
Securities and any price-related information previously omitted from the
effective Registration Statement and the Prospectus Supplement shall have
been transmitted to the Commission for filing pursuant to Rule 424 under
the Securities Act within the prescribed time period and prior to the
Closing Date the Company shall have provided to the Representatives
evidence satisfactory to the Representatives of such timely filing.
(b) The representations and warranties of the Company contained
herein and in the Terms Agreement shall be true and correct on and as of
the Closing Date as if made on and as of the Closing Date and the Company
shall have complied with all agreements and satisfied all conditions on
its part to be performed or satisfied hereunder at or prior to the Closing
Date.
(c) Subsequent to the Representation Date and prior to payment for
the Underwritten Securities on the Closing Date, there shall not have
occurred or become known any Material Adverse Change or any development
involving a Prospective Material Adverse Change other than as set forth in
the Registration Statement and the Prospectus, the effect of which in the
judgment of the Representatives makes it impracticable or inadvisable to
proceed with the public offering or the delivery of the Underwritten
Securities on the terms and in the manner contemplated in the Registration
Statement and the Prospectus. As used in this Section 6(c), "Prospectus"
shall mean the Prospectus first used to confirm sales of the Offered
Securities exclusive of any amendment or supplement thereto thereafter.
(d) The Representatives shall have received on and as of the Closing
Date a certificate of the Company signed by the Chief Executive Officer,
the Chief Operating Officer or the Chief Financial Officer of the Company
to the effect set forth in subsections (a) and (b) of this Section 6 and
to the further effect that since the most recent date as of which
information is given in the
25
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Prospectus to the Closing Date there shall not have occurred any
Material Adverse Change, or any development involving a Prospective
Material Adverse Change. As used in this Section 6(d), "Prospectus" shall
mean the Prospectus first used to confirm sales of the Offered Securities
exclusive of any amendment or supplement thereto thereafter.
(e) The Representatives shall have received on the Closing Date a
signed opinion of Liddell, Sapp, Zivley, Hill & ▇▇▇▇▇▇, L.L.P ("LSZHL"),
special counsel for the Company, addressed to the Underwriters and dated
the Closing Date and satisfactory to counsel for the Underwriters, to the
effect that:
(i) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation and has the corporate power and
authority to own its property and to conduct its business as
described in the Prospectus.
(ii) Each of this Agreement and the Terms Agreement has
been duly authorized, executed and delivered by the Company.
(iii) The Company has the requisite corporate power and
authority to execute, deliver and perform its obligations under the
Indenture relating to the Offered Securities, and such Indenture has
been duly authorized, executed and delivered by the Company and has
been duly qualified under the Trust Indenture Act and (assuming the
due authorization, execution and delivery by the Trustee thereunder)
constitutes a valid and legally binding instrument of the Company,
enforceable against the Company in accordance with its terms, subject
to applicable bankruptcy, insolvency, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally and
subject to the effect of general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law)
and the discretion of the court before which any proceeding therefor
may be brought.
(iv) The Company has the requisite corporate power and
authority to issue and deliver the Offered Securities, and the
Offered Securities have been duly authorized by the Company for
issuance. The Offered
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Securities, when executed by the Company and authenticated
by the Trustee in accordance with the Indenture relating to the
Offered Securities (assuming the due authorization, execution and
delivery of the Indenture by the Trustee thereunder) and delivered to
and paid for by the Underwriters in accordance with the terms of this
Agreement and the Terms Agreement 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, subject to applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or transfer and
similar laws affecting creditors' rights and remedies generally and
subject, as to enforceability, to general principles of equity
(regardless of whether enforcement is sought in a proceeding in
equity or at law) and the discretion of the court before which any
proceeding therefor may be brought.
(v) The Company has the requisite corporate power and
authority to execute, deliver and perform its obligations under the
Supplemental Indenture (if applicable) relating to the Offered
Securities, and the Supplemental Indenture (if applicable) has been
duly authorized, executed and delivered by the Company and (assuming
the due authorization, execution and delivery by the Trustee under
the Indenture relating to the Offered Securities) constitutes a valid
and legally binding instrument of the Company, enforceable against
the Company in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or transfer and similar laws affecting creditors' rights
and remedies generally and subject, as to enforceability, to general
principles of equity (regardless of whether enforcement is sought in
a proceeding in equity or at law) and the discretion of the court
before which any proceeding therefor may be brought.
(vi) The statements set forth or incorporated by reference
in the Registration Statement and the Prospectus insofar as such
statements purport to summarize certain provisions of the Offered
Securities (and the Common Stock, if applicable), the Indenture and
the Supplemental Indenture provide a fair summary of such provisions.
27
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(vii) If the Prospectus contains a section entitled
"Capitalization", the number of authorized shares of capital stock of
the Company is as set forth in the Prospectus under "Capitalization".
The authorized capital stock of the Company conforms as to legal
matters in all material respects to the description thereof contained
in the Prospectus.
(viii) If the Offered Securities are convertible into
Common Stock, upon issuance and delivery of the Offered Securities,
the Offered Securities shall be convertible at the option of the
holder thereof into Common Stock in accordance with the terms of the
Offered Securities and the Supplemental Indenture (if applicable)
relating thereto; the Common Stock issuable upon conversion of the
Offered Securities have been duly authorized and validly reserved for
issuance upon such conversion by all necessary corporate action, and
such Common Stock, when issued upon such conversion, will be validly
issued, fully paid and nonassessable; no holder of the Common Stock
will be subject to personal liability solely by reason of being such
a holder; and the issuance of such shares upon such conversion will
not be subject to preemptive rights arising by operation of law or
under the charter or by-laws of the Company.
(ix) At the time the Registration Statement and each
amendment thereto became effective and at the Representation Date,
the Registration Statement and the Prospectus (other than the Form
T-1 and the financial statements and schedules and other financial
and statistical data included or incorporated by reference therein,
as to which such counsel need express no opinion) appear on their
face to be appropriately responsive to the applicable requirements of
the Securities Act. The applicable Indenture, as amended by the
Supplemental Indenture, complies with the requirements of the Trust
Indenture Act.
(x) Such counsel does not know of any legal or governmental
actions, suits or proceedings, pending or threatened, required to be
disclosed in the Registration Statement which are not disclosed
therein as required (provided that for such purpose such counsel need
not regard any action, suit or proceeding to be "threatened" unless
the potential litigant has manifested to the management of the
Company or to such
28
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counsel a present intention to initiate such suit or
proceeding).
(xi) Based upon such counsel's review of applicable law, no
authorization, approval, consent or order of any court or
governmental or regulatory authority, body or agency or third party
is required in connection with (A) the offering, issuance or sale of
the Offered Securities or, if applicable, the valid authorization,
issuance and delivery of the Common Stock issuable upon conversion of
the Offered Securities, or (B) the execution, delivery or full and
timely performance of this Agreement, the Terms Agreement, the
Indenture, the Supplemental Indenture (if applicable) or the Offered
Securities by the Company, except such as may be required under the
Securities Act, the Trust Indenture Act or state securities laws.
(xii) To the best of such counsel's knowledge and
information, after due inquiry, the execution, delivery and the full
and timely performance of this Agreement, the Terms Agreement, the
Indenture and the Supplemental Indenture (if applicable) and the
Offered Securities and the consummation of the transactions
contemplated herein (including the issuance, sale and delivery of the
Offered Securities and, if applicable, the issuance of the Common
Stock upon conversion of the Offered Securities), will not constitute
a breach of, or default under (including, without limitation, any
event which with notice or lapse of time, or both, would constitute a
breach of or 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 the Subsidiaries pursuant to, any
contract identified on a schedule to such opinion (the scope of which
list of contracts being reasonably acceptable to the
Representatives), nor will such action result in any violation of the
provisions of the charter or by-laws of the Company, or any
applicable law, rule, regulation or administrative, regulatory or
court judgment, order or decree, except for any breach, default,
lien, charge or encumbrance under any such contract as could not,
singly or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
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(xiii) Each document filed pursuant to the Exchange Act
(other than the financial statements, schedules and other financial
and statistical data included therein, as to which such counsel need
express no opinion) and incorporated or deemed to be incorporated by
reference in the Prospectus appears on its face to be appropriately
responsive to the applicable requirements of the Exchange Act.
(xiv) The Company is not an investment company under the
Investment Company Act of 1940, nor a holding company or a subsidiary
of a holding company under the Public Utility Holding Company Act of
1935.
Such counsel shall also state that they have been advised by the
Commission that the Indenture has been qualified under the Trust Indenture
Act and that the Registration Statement became effective under the
Securities Act; that any required filings of the Prospectus pursuant to
Rule 424(b) have been made in the manner and within the time period
required by Rule 424(b); and that, based solely on conversations with the
Commission, 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 such counsel's knowledge, are contemplated
under the Securities Act.
In addition, such counsel shall also include a statement to the
effect that nothing has come to the attention of such counsel which leads
such counsel to believe that (1) the Registration Statement (other than
the financial statements and schedules and other financial and statistical
data included or incorporated by reference therein, as to which such
counsel need not make any statement or express any opinion), when it
became effective and at the Representation Date contained and, as of the
date such opinion is delivered, contains any untrue statement of a
material fact or omitted or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading
and (2) the Prospectus (other than the financial statements and schedules
and other financial and statistical data included or incorporated by
reference therein, as to which such counsel need not make any statement or
express any opinion) as of its date or at the Representation Date
contained and, as of the date such opinion is delivered, contains any
untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements
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therein, in the light of the circumstances under which they were
made, not misleading.
Such counsel in rendering such opinion may rely as to certain matters
of fact on certificates of officers of the Company and of public
officials; provided, however, that (a) such counsel shall state that such
counsel, the Underwriters and counsel for the Underwriters are justified
in relying upon such certificates and (b) such certificates shall have
been delivered to the Representatives prior to the Closing Date. In
rendering such opinion, such counsel may rely as to matters involving the
application of laws of any jurisdiction other than the State of Texas or
the United States or the General Corporation Law of the State of Delaware,
to the extent they deem proper and specified in such opinion, upon the
opinion of other counsel who are reasonably satisfactory to counsel for
the Underwriters; provided, however, that LSZHL shall state that LSZHL,
the Underwriters and counsel for the Underwriters are justified in relying
upon such opinion. In addition, such counsel may assume for purposes of
such opinion that the laws of the State of New York are identical to the
laws of the State of Texas.
(f) The Representatives shall have received on the Closing Date a
signed opinion of ▇▇▇▇▇ ▇. Shelger, General Counsel of the Company,
addressed to the Underwriters and dated the Closing Date and satisfactory
to counsel for the Underwriters, to the effect that:
(i) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as
described in the Prospectus and to the best of such counsel's
knowledge and information, after due inquiry, is duly qualified to
transact business and is in good standing in each jurisdiction in
which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the
failure to be so qualified or be in good standing could not, singly
or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(ii) Each Subsidiary has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its
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incorporation, has the corporate power and authority to own
its property and to conduct its business as described in the
Prospectus and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or
its ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be in
good standing could not, singly or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(iii) Each of this Agreement and the Terms Agreement has
been duly authorized, executed and delivered by the Company.
(iv) The Company has the requisite corporate power and
authority to execute, deliver and perform its obligations under the
Indenture relating to the Offered Securities, and such Indenture has
been duly authorized, executed and delivered by the Company and has
been duly qualified under the Trust Indenture Act and (assuming the
due authorization, execution and delivery by the Trustee thereunder)
constitutes a valid and legally binding instrument of the Company,
enforceable against the Company in accordance with its terms, subject
to applicable bankruptcy, insolvency, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally and
subject to the effect of general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law)
and the discretion of the court before which any proceeding therefor
may be brought.
(v) The Company has the requisite corporate power and
authority to issue and deliver the Offered Securities, and the
Offered Securities have been duly authorized by the Company for
issuance. The Offered Securities, when executed by the Company and
authenticated by the Trustee in accordance with the Indenture
relating to the Offered Securities (assuming the due authorization,
execution and delivery of the Indenture by the Trustee thereunder)
and delivered to and paid for by the Underwriters in
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accordance with the terms of this Agreement and the Terms
Agreement 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, subject to
applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or transfer and similar laws affecting
creditors' rights and remedies generally and subject, as to
enforceability, to general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law)
and the discretion of the court before which any proceeding therefor
may be brought.
(vi) The Company has the requisite corporate power and
authority to execute, deliver and perform its obligations under the
Supplemental Indenture (if applicable) relating to the Offered
Securities, and the Supplemental Indenture (if applicable) has been
duly authorized, executed and delivered by the Company and (assuming
the due authorization, execution and delivery by the Trustee under
the Indenture relating to the Offered Securities) constitutes a valid
and legally binding instrument of the Company, enforceable against
the Company in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or transfer and similar laws affecting creditors' rights
and remedies generally and subject, as to enforceability, to general
principles of equity (regardless of whether enforcement is sought in
a proceeding in equity or at law) and the discretion of the court
before which any proceeding therefor may be brought.
(vii) The statements set forth or incorporated by reference
in the Registration Statement and the Prospectus insofar as such
statements purport to summarize certain provisions of the Offered
Securities (and the Common Stock, if applicable), the Indenture and
the Supplemental Indenture provide a fair summary of such provisions.
(viii) If the Prospectus contains a section entitled
"Capitalization", the number of authorized shares of capital stock of
the Company is as set forth in the Prospectus under "Capitalization".
The authorized capital stock of the Company conforms as to legal
matters in all material respects to the description thereof contained
in the Prospectus.
(ix) If the Offered Securities are convertible into Common
Stock, upon issuance and delivery of the
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Offered Securities, the Offered Securities shall be
convertible at the option of the holder thereof into Common Stock in
accordance with the terms of the Offered Securities and the
Supplemental Indenture (if applicable) relating thereto; the Common
Stock issuable upon conversion of the Offered Securities have been
duly authorized and validly reserved for issuance upon such
conversion by all necessary corporate action, and such Common Stock,
when issued upon such conversion, will be validly issued, fully paid
and nonassessable; no holder of the Common Stock will be subject to
personal liability solely by reason of being such a holder; and the
issuance of such shares upon such conversion will not be subject to
preemptive rights arising by operation of law or under the charter or
by-laws of the Company.
(x) All of the issued and outstanding capital stock of each
Subsidiary has been duly authorized and validly issued, is fully paid
and nonassessable and, to the best of such counsel's knowledge and
information, after due inquiry, except as set forth in the
Registration Statement and the Prospectus, is owned by the Company,
directly or indirectly, free and clear of any perfected security
interest, and, to the best of such counsel's knowledge and
information, after due inquiry, any other security interests or
claims.
(xi) Such counsel does not know of any legal or
governmental actions, suits or proceedings, pending or threatened,
required to be disclosed in the Registration Statement which are not
disclosed therein as required (provided that for such purpose such
counsel need not regard any action, suit or proceeding to be
"threatened" unless the potential litigant has manifested to the
management of the Company or to such counsel a present intention to
initiate such suit or proceeding).
(xii) To the best of such counsel's knowledge and
information, after due inquiry, there are no Contracts or other
instruments required to be described or referred to in the
Registration Statement or to be filed as exhibits thereto other than
those described or referred to therein or filed or incorporated by
reference as exhibits thereto.
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(xiii) Based upon such counsel's review of applicable law,
no authorization, approval, consent or order of any court or
governmental or regulatory authority, body or agency or third party
is required in connection with (A) the offering, issuance or sale of
the Offered Securities or, if applicable, the valid authorization,
issuance and delivery of the Common Stock issuable upon conversion of
the Offered Securities, or (B) the execution, delivery or full and
timely performance of this Agreement, the Terms Agreement, the
Indenture, the Supplemental Indenture (if applicable) or the Offered
Securities by the Company, except such as may be required under the
Securities Act, the Trust Indenture Act or state securities laws.
(xiv) To the best of such counsel's knowledge and
information, after due inquiry, the execution, delivery and the full
and timely performance of this Agreement, the Terms Agreement, the
Indenture, the Supplemental Indenture (if applicable) and the Offered
Securities, the consummation of the transactions contemplated herein
(including the issuance, sale and delivery of the Offered Securities
and, if applicable, the issuance of the Common Stock upon conversion
of the Offered Securities), and compliance by the Company with its
obligations hereunder and thereunder will not conflict with or
constitute a breach of, or default under (including, without
limitation, any event which, with notice or lapse of time, or both,
would constitute a breach of or 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 the Subsidiaries pursuant
to, any contract identified on a schedule to such opinion (the scope
of which list of contracts being reasonably acceptable to the
Representatives), nor will such action result in any violation of the
provisions of the charter or by-laws of the Company, or any
applicable law, rule, regulation or administrative, regulatory or
court judgment, order or decree, except for any breach, default,
lien, charge or encumbrance under any such contract as could not,
singly or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
In addition, such counsel shall also include a statement to the
effect that nothing has come to the attention
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of such counsel which leads such counsel to believe that (1) the
Registration Statement (other than the financial statements and schedules
and other financial and statistical data included or incorporated by
reference therein, as to which such counsel need not make any statement or
express any opinion), when it became effective and at the Representation
Date contained and, as of the date such opinion is delivered, contains any
untrue statement of a material fact or omitted on omits to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading and (2) the Prospectus (other than the
financial statements and schedules and other financial and statistical
data included or incorporated by reference therein, as to which such
counsel need not make any statement or express any opinion) as of its date
or at the Representation Date contained and, as of the date such opinion
is delivered, contains any untrue statement of a material fact or omitted
or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
Such counsel in rendering such opinion may rely as to certain matters
of fact on certificates of officers of the Company and of public
officials; provided, however, that (a) such counsel shall state that such
counsel, the Underwriters and counsel for the Underwriters are justified
in relying upon such certificates and (b) such certificates shall have
been delivered to the Representatives prior to the Closing Date. In
rendering such opinion, such counsel may rely as to matters involving the
application of laws of (1) the General Corporation Law of the State of
Delaware upon the written opinion of LSZHL delivered pursuant to clause
(e) above of this Section 6 and (2) any jurisdiction other than the State
of Texas or the United States, to the extent they deem proper and
specified in such opinion, upon the opinion of other counsel who are
reasonably satisfactory to counsel for the Underwriters; provided,
however, that ▇▇▇▇▇ ▇. Shelger shall state that ▇▇▇▇▇ ▇. Shelger, the
Underwriters and counsel for the Underwriters are justified in relying
upon such opinion. In addition, such counsel may assume for purposes of
such opinion that the laws of the State of New York are identical to the
laws of the State of Texas.
(g) On the Representation Date and also on the Closing Date, Coopers
& ▇▇▇▇▇▇▇ L.L.P. shall have furnished to the Representatives signed
letters, addressed to the
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Underwriters and dated the respective dates of delivery thereof, in
form and substance satisfactory to the Representatives, containing
statements and information of the type customarily included in
accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information included or
incorporated by reference in the Registration Statement and the
Prospectus.
(h) The Representatives shall have received on and as of the Closing
Date a favorable opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel to the
Underwriters, with respect to the Registration Statement, the Prospectus
and other related matters as the Representatives may reasonably request,
and such counsel shall have received such papers and information as they
may reasonably request to enable them to pass upon such matters.
(i) If the Offered Securities are convertible into Common Stock, on
the Representation Date, the Common Stock issuable upon conversion of the
Offered Securities shall have been approved for listing on the New York
Stock Exchange upon notice of issuance.
(j) At the Closing Date, 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 Offered
Securities as herein contemplated and related proceedings, 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 Offered Securities (and, if applicable, the Common Stock) as herein
contemplated shall be satisfactory in form and substance to the
Underwriters and counsel for the Underwriters.
(k) On or prior to the Closing Date the Company shall have furnished
to the Representatives such further certificates and documents as the
Representatives shall reasonably request.
(l) Subsequent to the execution and delivery of the Terms Agreement
and prior to the Closing Date, there shall not have occurred any
downgrading, nor shall any notice have been given of (i) any intended or
potential downgrading or (ii) any review or possible change that does not
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indicate an improvement, in the rating accorded any securities of or
guaranteed by the Company by any "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule 436(g)(2)
under the Securities Act.
(m) If the Offered Securities are convertible into Common Stock, the
Company shall have delivered to the Representatives written agreements, in
form and substance satisfactory to the Representative designated in the
Terms Agreement, with each of its executive officers who owns Common Stock
that no offer, sale or other disposition, or request or demand for
registration under the Securities Act or inclusion in any other
registration statement filed by the Company under the Securities Act, of
any Common Stock or other capital stock of the Company, or warrants,
options, convertible, exercisable or exchangeable securities, or other
rights to purchase or acquire, Common Stock or other capital stock (or any
such right or exchangeable, exercisable or convertible security) owned by
such person, or with respect to which such person has the power of
disposition, will be made for a period of 90 days after the date of this
Agreement, directly or indirectly, by such executive officer, otherwise
than (i) with the prior written consent of the Representative designated
in the Terms Agreement and (ii) pursuant to such exceptions, if any, as
are agreed to by the Representative designated in the Terms Agreement and
set forth in the Terms Agreement.
(n) There shall not have been any amendment or supplement to the
Registration Statement or the Prospectus to which the Underwriters shall
have objected.
(o) The Company shall have complied with its obligations under
Section 5(o).
The several obligations of the Underwriters designated in the Terms
Agreement to purchase Option Securities hereunder on the Additional Closing
Date are, unless otherwise agreed by the Underwriters designated in the Terms
Agreement, subject to the conditions set forth in paragraph (a) to and
including paragraph (n) above on and as of the Additional Closing Date
(references therein to the Closing Date shall be deemed references to the
Additional Closing Date for this purpose), except that the certificate called
for by paragraph (d), the opinions called for by paragraphs (e), (f) and (h)
and the letters called for by paragraph (g) shall be dated as of, and delivered
on, the Additional Closing Date, and to the delivery to
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the Representatives on the Additional Closing Date of such other documents as
they may reasonably request.
7. Indemnification and Contribution. The Company agrees to indemnify
and hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, from and against any and all losses, claims,
damages and liabilities (including, without limitation the legal fees and other
expenses reasonably incurred in connection with defending or investigating any
such action or claim) caused by any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or the
Prospectus (as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) or any preliminary prospectus, or caused by
any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages or liabilities are caused by any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with information relating to any Underwriter
furnished to the Company in writing by such Underwriter through the
Representatives expressly for use therein; provided, however, that the
foregoing indemnity with respect to any preliminary prospectus shall not inure
to the benefit of any Underwriter (or the benefit of any person controlling
such Underwriter) from whom the person asserting any such losses, claims,
damages or liabilities purchased Offered Securities if such untrue statement or
omission or alleged untrue statement or omission was made in such preliminary
prospectus and is eliminated or remedied in the Prospectus and the Company has
provided such Prospectus in accordance with Section 5(b) hereof (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) and if it shall be established in the related action or proceeding
that a copy of the Prospectus, if required by law (as so amended or
supplemented, but exclusive of any documents incorporated therein by
reference), shall not have been furnished to such person at or prior to the
written confirmation of the sale of such Offered Securities to such person,
except to the extent that such Prospectus contains any other untrue statement
or omission or alleged untrue statement or omission of a material fact that was
the subject matter of the related action or proceeding. For purposes of the
proviso to the immediately preceding sentence, the term "Prospectus" shall not
be deemed to include the documents incorporated therein by reference, and no
Underwriter shall be obligated to send or give any supplement or amendment to
any document incorporated by
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reference in any preliminary prospectus or the Prospectus to any person.
Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, the directors of the Company, the officers of the
Company who sign the Registration Statement and each person, if any, who
controls the Company within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act from and against any and all losses,
claims, damages and liabilities (including, without limitation, any legal or
other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or the Prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) or any preliminary
prospectus, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, but only with reference to information relating to such
Underwriter furnished to the Company in writing by such Underwriter through the
Representatives expressly for use in the Registration Statement, the
Prospectus, any amendment or supplement thereto, or any preliminary prospectus.
For purposes of this Section 7 and Section 4(ii), the only written information
furnished by the Underwriters to the Company expressly for use in the
Registration Statement and the Prospectus is the information in the last
paragraph of the cover page of the Prospectus Supplement and the second
paragraph under the table under the caption "Underwriting" in the Prospectus
Supplement.
If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any person in respect of which indemnity may be sought pursuant to any of the
two preceding paragraphs of this Section 7, such person (hereinafter called the
"Indemnified Person") shall promptly notify the person against whom such
indemnity may be sought (hereinafter called the "Indemnifying Person") in
writing, and the Indemnifying Person, upon request of the Indemnified Person,
shall promptly retain counsel satisfactory to the Indemnified Person to
represent the Indemnified Person and any others the Indemnifying Person may
designate in such proceeding and shall pay the fees and expenses of such
counsel related to such proceeding. In any such proceeding, any Indemnified
Person shall have the right to retain its own counsel, but the fees and
expenses of such counsel shall be at the expense of such Indemnified Person
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unless (i) the Indemnifying Person and the Indemnified Person shall have
mutually agreed to the contrary, (ii) there has been a failure by the
Indemnifying Person to retain promptly counsel reasonably satisfactory to the
Indemnified Person or (iii) the named parties to any such proceeding (including
any impleaded parties) include both the Indemnifying Person and the Indemnified
Person and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It
is understood that the Indemnifying Person shall not, in connection with any
proceeding or related proceeding in the same jurisdiction, be liable for (a)
the fees and expenses of more than one separate firm (in addition to any local
counsel) for all Underwriters and all persons, if any, who control any
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act and (b) the fees and expenses of more than one
separate firm (in addition to any local counsel) for the Company, its
directors, its officers who sign the Registration Statement and each person, if
any, who controls the Company within the meaning of either such Section, and
that all such fees and expenses shall be reimbursed as they are incurred. In
the case of any such separate firm for the Underwriters and such control
persons of Underwriters, such firm shall be designated in writing by the
Representatives. In the case of any such separate firm for the Company, and
such directors, officers and control persons of the Company, such firm shall be
designated in writing by the Company. The Indemnifying Person shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the Indemnifying Person agrees to indemnify any Indemnified
Person from and against any loss or liability by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an Indemnified
Person shall have requested an Indemnifying Person to reimburse the Indemnified
Person for fees and expenses of counsel as contemplated by the third sentence
of this paragraph, the Indemnifying Person agrees that it shall be liable for
any settlement of any proceeding effected without its written consent if (i)
such settlement is entered into more than 30 days after receipt by such
Indemnifying Person of the aforesaid request and (ii) such Indemnifying Person
shall not have reimbursed the Indemnified Person in accordance with such
request prior to the date of such settlement; provided, however, that the
Indemnifying Person shall not be liable for any settlement effected without its
consent pursuant to this sentence if the Indemnifying Person is contesting in
good faith the request for reimbursement and all other fees and expenses of
counsel not so contested shall have been
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reimbursed. No Indemnifying Person shall, without the prior written consent of
the Indemnified Person, effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Person is or could have been a
party and indemnity could have been sought hereunder by such Indemnified
Person, unless such settlement (1) includes an unconditional written release of
such Indemnified Person, in form and substance satisfactory to such Indemnified
Person, from all liability on claims that are the subject matter of such
proceeding and (2) does not include any statement as to an admission of fault,
culpability or failure to act by or on behalf of any Indemnified Person.
If the indemnification provided for in the first or second paragraph
of this Section 7 is unavailable to any extent to an Indemnified Person under
such paragraph in respect of any losses, claims, damages or liabilities
referred to therein, then each Indemnifying Person under such paragraph, in
lieu of indemnifying such Indemnified Person thereunder, shall contribute to
the amount paid or payable by such Indemnified Person as a result of such
losses, claims, damages or liabilities as follows: as between the Company on
the one hand and the Underwriters on the other (i) in such proportion as is
appropriate to reflect the aggregate relative benefits received by the Company
and by the Underwriters 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 and
of the Underwriters in connection with the statements or omissions that
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative benefits received by the
Company on the one hand and by the Underwriters on the other shall be deemed to
be in the same respective proportions as the net proceeds from the offering
(before deducting expenses) received by the Company and the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover of the Prospectus bear to the aggregate public
offering price of the Offered Securities. The relative fault of the Company on
the one hand and of the Underwriters on the other shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company or by the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
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The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an Indemnified Person as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such Indemnified
Person in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, in no event shall an
Underwriter be required to contribute any amount in excess of the amount by
which the total price at which the Offered Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages that 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 to contribute pursuant to this Section 7 are several in proportion
to the respective number of Offered Securities they have purchased hereunder,
and not joint.
The indemnity and contribution agreements contained in this Section 7
are in addition to any liability which the Indemnifying Persons may otherwise
have to the Indemnified Persons referred to above.
The indemnity and contribution agreements contained in this Section 7
and the representations and warranties of the Company contained in this
Agreement shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by or on behalf
of any Underwriter or any person controlling any Underwriter or the Company,
its officers or directors or any other person controlling the Company and (iii)
acceptance of and payment for any of the Offered Securities.
8. Termination of Agreement. Notwithstanding anything herein
contained, this Agreement (or the obligations of the several Option Securities
Underwriters with respect to the Option Securities) may be terminated in the
absolute discretion of the Representatives, by notice given to the Company, if
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after the execution and delivery of this Agreement and prior to the Closing
Date (or, in the case of the Option Securities, prior to the Additional Closing
Date) (i) trading generally shall have been suspended or materially limited on
or by, as the case may be, any of the New York Stock Exchange, the National
Association of Securities Dealers, Inc. or the American Stock Exchange, (ii)
trading of any securities of the Company shall have been suspended on any
exchange or in any over-the-counter market, (iii) a general moratorium on
commercial banking activities in New York shall have been declared by either
U.S. Federal or New York State authorities or exchange controls shall have been
imposed by the United States, or (iv) there shall have occurred any outbreak or
escalation of hostilities or any change in financial markets or any calamity or
crisis that, in the judgment of the Representatives, is material and adverse
and which, in the judgment of the Representatives, makes it impracticable to
market the Offered Securities on the terms and in the manner contemplated in
the Prospectus.
9. Effectiveness of Agreement; Additional Obligations of the
Underwriters. This Agreement shall become effective upon the later of (x) the
Representation Date and (y) release of notification by the Commission of the
effectiveness of the most recent amendment to the Registration Statement filed
prior to the Closing Date.
If, on the Closing Date or the Additional Closing Date, as the case
may be, any one or more of the Underwriters shall fail or refuse to purchase
the aggregate principal amount of Offered Securities which it or they have
agreed to purchase hereunder on such date, and the aggregate principal amount
of Offered Securities which such defaulting Underwriter or Underwriters agreed
but failed or refused to purchase is not more than one-tenth of the aggregate
principal amount of Offered Securities to be purchased on such date, the other
Underwriters (with respect to the Option Securities, to the extent such
Underwriters are Option Securities Underwriters) shall be obligated severally
in the proportions that (1) with respect to Underwritten Securities, the
aggregate principal amount of Underwritten Securities set forth opposite their
respective names in the annex or annexes to Exhibit I hereto bears to the
aggregate principal amount of Underwritten Securities set forth opposite the
names of all such non-defaulting Underwriters and (2) with respect to Option
Securities, the aggregate principal amount of Underwritten Securities set forth
opposite their respective names in the annex or annexes to Exhibit I hereto
bears to the aggregate principal amount of Underwritten Securities set forth
opposite the names of all such non-defaulting Underwriters who
44
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are Option Securities Underwriters, or in such other proportions as the
Representatives may specify, to purchase the aggregate principal amount of
Offered Securities which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase on such date; provided, however, that in no event
shall the aggregate principal amount of Offered Securities that any Underwriter
has agreed to purchase pursuant to Section 1 be increased pursuant to this
Section 9 by an amount in excess of one-ninth of such aggregate principal
amount of Offered Securities without the written consent of such Underwriter.
If, on the Closing Date or the Additional Closing Date, as the case may be, any
Underwriter or Underwriters shall fail or refuse to purchase the aggregate
principal amount of Offered Securities which it or they have agreed to purchase
hereunder on such date, and the aggregate principal amount of of Offered
Securities with respect to which such default occurs is more than one-tenth of
the aggregate principal amount of Offered Securities to be purchased on such
date, and arrangements satisfactory to the Representatives and the Company for
the purchase of such aggregate principal amount of Offered Securities are not
made within 36 hours after such default, this Agreement (or the obligations of
the several Underwriters to purchase the Option Securities, as the case may be)
shall terminate without liability on the part of any non-defaulting Underwriter
or the Company. In any such case either the Representatives or the Company
shall have the right to postpone the Closing Date (or, in the case of the
Option Securities, the Additional Closing Date), but in no event for longer
than seven days, in order that the required changes, if any, in the
Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
10. Reimbursement upon Occurrence of Certain Events. If this
Agreement shall be terminated by the Underwriters, or any of them, because of
any failure or refusal on the part of the Company to comply with the terms or
to fulfill any of the conditions of this Agreement, or if for any reason the
Company shall be unable to perform its obligations under this Agreement, the
Company agrees to reimburse the Underwriters or such Underwriters as have so
terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and expenses of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder and pursuant to the Terms Agreement. In no
event, however, shall the Company be
45
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responsible to the Underwriters for any loss of profits for failure to
consummate the offering and sale of the Offered Securities.
11. Miscellaneous. This Agreement shall inure to the benefit of and
be binding upon the Company, the Underwriters, any controlling persons referred
to herein and their respective successors and assigns. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any other
person, firm or corporation any legal or equitable right, remedy or claim under
or in respect of this Agreement or any provision herein contained. No purchaser
of Offered Securities from any Underwriter shall be deemed to be a successor by
reason merely of such purchase.
12. Notice. 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
given to the Representatives at the address as set forth in the Terms
Agreement. Notices to the Company shall be given to it at Service Corporation
International, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (facsimile: (713)
525-9067); Attention: ▇▇▇▇▇ ▇. Shelger.
13. Counterparts; Applicable Law. This Agreement may be signed in
counterparts, each of which shall be an original and all of which together
shall constitute one and the same instrument. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York
applicable to contracts made and to be performed wholly therein, without giving
effect to the conflicts of laws provisions thereof.
46
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If the foregoing is in accordance with your understanding, please
sign and return six counterparts hereof.
Very truly yours,
SERVICE CORPORATION INTERNATIONAL
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President/Treasurer
CONFIRMED AND ACCEPTED,
as of the date first above written
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ &
▇▇▇▇▇ INCORPORATED
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
UBS SECURITIES LLC
By: ▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Managing Director
47
EXHIBIT I
SERVICE CORPORATION INTERNATIONAL
$200,000,000
7.70% Notes due April 15, 2009
TERMS AGREEMENT
April 15, 1997
Service Corporation International
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. Shelger
Ladies and Gentlemen:
▇.▇. ▇▇▇▇▇▇ Securities Inc., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated and UBS Securities LLC (the
"Representatives") understand that Service Corporation International, a Texas
corporation (the "Company"), proposes to issue and sell $200,000,000 aggregate
principal amount of its 7.70% Notes due April 15, 2009 (the "Notes") (the
"Underwritten Securities"). The Notes are Senior Debt Securities and are to be
issued under the Senior Indenture. Subject to the terms and conditions set
forth herein or incorporated by reference herein, the Underwriters named in
Annex A attached hereto offer to purchase, severally and not jointly, the
aggregate principal amount of Underwritten Securities set forth opposite the
name of each such Underwriter on Annex A hereto at a price of 99.295% of the
principal amount thereof (the "Purchase Price"). The Closing Date shall be
April 18, 1997, at 9:00 A.M., New York City time, at the offices of ▇▇▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇.
The Underwritten Securities shall have the following terms:
Title: 7.70% Notes due April 15, 2009
Maturity: April 15, 2009
48
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Interest rate: 7.70% per annum
Interest payment dates: April 15 and October 15, commencing
October 15, 1997
Record Dates: April 1 and October 1
Redemption at option of Company: None
Sinking fund provisions: None
Public offering price: 99.970% of the principal amount
thereof
All the provisions contained in the document entitled "Underwriting
Agreement -- Service Corporation International -Debt Securities" (the
"Underwriting Agreement") and dated April 15, 1997, a copy of which you have
previously received, are herein incorporated by reference in their entirety and
shall be deemed to be a part of this Terms Agreement to the same extent as if
the Underwriting Agreement had been set forth in full herein. Terms defined in
the Underwriting Agreement are used herein as therein defined.
The Representative authorized to approve the form of agreement
specified in Section 6(m) of the Underwriting Agreement and to give the consent
specified in Section 5(h) and Section 6(m) of the Underwriting Agreement is
▇.▇. ▇▇▇▇▇▇ Securities Inc. The text of the first sentence of Section 5(h) of
the Underwriting Agreement is hereby deleted for purposes of the purchase and
sale of the Notes and the following shall be deemed inserted therein in lieu
thereof: "For a period beginning on the Representation Date to and including
the Business Day following the Closing Date, not to, and not to cause or permit
any subsidiary of the Company to, directly or indirectly, effect any offer,
sale or other disposition of, or registration of, any debt securities or any
other long-term debt, notes or debentures of or guaranteed by the Company or
any of its Subsidiaries which are substantially similar to the Notes (which
expressly shall be deemed not to include any debt securities or guarantees of
debt securities issued under the S-4) without the prior written consent of ▇.▇.
▇▇▇▇▇▇ Securities Inc." The additional exceptions to Section 5(h) of the
Underwriting Agreement are: (i) The Company may issue $250,000,000 aggregate
principal amount of its 7.375% Notes due April 15, 2004, pursuant to an
underwriting agreement, together with the terms agreement forming a part
thereof of even date therewith, dated April 15, 1997 among the Company and ▇.▇.
▇▇▇▇▇▇ Securities Inc., Chase Securities Inc., ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
Incorporated and NationsBanc Capital Markets, Inc. and (ii) the Company may
issue $200,000,000 aggregate principal amount of its Value Enhanced Put
Securities due 2011 to ▇▇▇▇▇▇ Guaranty Trust Company of New York and UBS
Securities LLC.
49
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Any action by the Representatives hereunder may be taken by the
Representatives jointly or by ▇.▇. ▇▇▇▇▇▇ Securities Inc. alone on behalf of
the Representatives, and any such action taken by ▇.▇. ▇▇▇▇▇▇ Securities Inc.
alone shall be binding upon the Representatives. Notices to the Underwriters
shall be given to the Representatives c/o ▇.▇. ▇▇▇▇▇▇ Securities Inc., ▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (facsimile: (▇▇▇) ▇▇▇-▇▇▇▇); Attention:
Syndicate Department.
This Agreement may be signed in counterparts, each of which shall be
an original and all of which together shall constitute one and the same
instrument. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York applicable to contracts made and to be
performed wholly in such state, without giving effect to the conflicts of laws
provisions thereof. Times referred to herein are to New York City time.
50
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Please accept this offer no later than 6:00 P.M. on April 15, 1997 by
signing a copy of this Terms Agreement in the space set forth below and
returning the signed copy to us, or by sending us a written acceptance in the
following form:
"We hereby accept your offer, set forth in the Terms Agreement, dated
April 15, 1997, to purchase the Underwritten Securities on the terms set forth
therein and agree to and accept all other terms and provisions of the Terms
Agreement."
Very truly yours,
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ &
▇▇▇▇▇ INCORPORATED
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
UBS SECURITIES LLC
By: ▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
By:
-----------------------------
Name:
Title:
Accepted as of the date first
above written:
SERVICE CORPORATION INTERNATIONAL
By:
-------------------------------
Name:
Title:
51
ANNEX A
Aggregate
Principal Amount
of Underwritten
Securities
Underwriters To Be Purchased
------------ ---------------
▇.▇. ▇▇▇▇▇▇ Securities Inc. ................................. $ 50,000,000
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ &
▇▇▇▇▇ Incorporated ........................................ 50,000,000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated ........................... 50,000,000
UBS Securities LLC .......................................... 50,000,000
------------
Total: ....................... $200,000,000
52
SCHEDULE I
Significant Subsidiaries of the Company
within the meaning of Rule 1-02 of
Regulation S-X under the Securities
Exchange Act of 1934.
----------------------------------------
SCI Funeral Services, Inc., an Iowa corporation
SCI International Limited, a Delaware corporation
SCI Texas Funeral Services, Inc., a Texas corporation
SCIT Holdings, Inc., a Delaware corporation
OGF-PFG, a French corporation
Service Corporation International France, a French corporation