Exhibit 1.2
GE GLOBAL INSURANCE HOLDING CORPORATION
UNDERWRITING AGREEMENT
STANDARD PROVISIONS
(DEBT SECURITIES)
February 21, 1996
From time to time, GE Global Insurance Holding Corporation, a Delaware
corporation (the "Company"), may enter into one or more underwriting agreements
that provide for the sale of designated debt securities to the several
underwriters named therein. The standard provisions set forth herein may be
incorporated by reference in any such underwriting agreement (with respect to
such designated debt securities, the "Underwriting Agreement"). The Underwriting
Agreement, including the provisions incorporated therein by reference, is herein
referred to as this Agreement. Terms defined in the Underwriting Agreement are
used herein as therein defined.
The Company has filed with the Securities and Exchange Commission (the
"Commission"), and there has become effective, a registration statement (the
file number of which will be set forth in the Underwriting Agreement), including
a prospectus, relating to debt securities of the Company, including the Notes,
and has filed with, or transmitted for filing to, or shall promptly hereafter
file with or transmit for filing to, the Commission a prospectus supplement (the
"Prospectus Supplement") specifically relating to the Notes pursuant to Rule 424
under the Securities Act of 1933, as amended (the "Securities Act"). The term
"Registration Statement" means such registration statement, including the
exhibits
thereto, as amended to the date of this Agreement. The term "Basic Prospectus"
means the prospectus included in the Registration Statement. The term
"Prospectus" means the Basic Prospectus together with the Prospectus Supplement.
The term "preliminary prospectus" means a preliminary prospectus supplement
specifically relating to the Notes, together with the Basic Prospectus. As used
herein, the terms "Basic Prospectus", "Prospectus" and "preliminary prospectus"
shall include in each case the documents incorporated by reference therein. The
terms "supplement" and "amendment" or "amend" as used herein shall include all
documents deemed to be incorporated by reference in the Prospectus that are
filed subsequent to the date of the Basic Prospectus by the Company with the
Commission pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
1. Public Offering. The Company is advised by the Manager that the
Underwriters propose to make a public offering of their respective portions of
the Notes as soon after this Agreement is entered into as in the Manager's
judgment is advisable. The terms of the public offering of the Notes are as
specified in the Underwriting Agreement.
2. Purchase and Delivery. Payment for the Notes shall be made by wire
transfer in immediately available funds (unless payment in other form of funds
is specified in the Underwriting Agreement) to the account specified by the
Company to the Manager the business day prior to the time of closing, on the
date and at the time specified in the Underwriting Agreement, upon delivery to
the nominee of The Depository Trust Company for the respective accounts of the
several Underwriters of one or more global notes representing the Notes.
3. Conditions to Closing. The several obligations of the Underwriters
hereunder are subject to the following conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall be in effect and no proceedings for such purpose shall be
pending before or (to the knowledge of the Company) threatened by the
Commission; there shall have been no material adverse change and no development
involving a prospective material adverse change in the condition of the Company
and its consolidated affiliates, taken as a whole, from that set forth in the
Registration Statement and the Prospectus, as amended or supplemented as of the
date of the Underwriting Agreement; and the representations and warranties of
the Company contained herein shall be true and correct on and as of the Closing
Date as if made on and as of the Closing Date; and the Manager shall have
received on the Closing Date a certificate, dated the Closing Date and signed by
an executive officer of the Company, to the effect that no stop order suspending
the effectiveness of the Registration Statement is in effect and no proceedings
for such purpose are
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pending before or (to the knowledge of such executive officer) threatened by the
Commission, there has been no material adverse change and no development
involving a prospective material adverse change in the condition of the Company
and its consolidated affiliates, taken as a whole, from that set forth in the
Registration Statement and the Prospectus, as amended or supplemented as of the
date of the Underwriting Agreement and the representations and warranties of the
Company contained herein are true and correct on and as of the Closing Date as
if made on and as of the Closing Date.
(b) The Manager shall have received on and as of the Closing Date an
opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Company, dated the
Closing Date, to the effect that:
(i) the Company has been duly incorporated and is validly existing and
in good standing as a corporation under the laws of the State of Delaware
with all requisite corporate power and authority to own its properties and
conduct its business as described in the Prospectus;
(ii) the Indenture has been duly authorized, executed and delivered by
the Company and duly qualified under the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act") and, assuming due authorization,
execution and delivery thereof by the Trustee, constitutes a valid and
legally binding instrument of the Company enforceable against the Company
in accordance with its terms;
(iii) the Notes have been duly authorized, executed and issued by the
Company and, assuming due authentication thereof by the Trustee and upon
payment and delivery in accordance with the Underwriting Agreement, will
constitute valid and binding obligations of the Company enforceable against
the Company in accordance with their terms and entitled to the benefits of
the Indenture;
(iv) this Agreement has been duly authorized, executed and delivered
by the Company;
(v) no consent, approval, authorization, order, registration or
qualification of or with any Federal or New York court or governmental
agency or body or any Delaware court or governmental agency or body acting
pursuant to the Delaware General Corporation Law is required for the issue
and sale of the Notes by the Company or the consummation by the Company of
the other transactions contemplated by this Agreement and the Indenture
except for the registration under the Securities Act and such as may be
required under the securities or blue sky laws in
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connection with the purchase and distribution of the Notes by the
Underwriters, nor will the issue and sale of the Notes by the Company or
the compliance by the Company with all of the provisions of this Agreement
or the Indenture or the consummation of the transactions herein and therein
contemplated violate the Company's Certificate of Incorporation or By-laws
or any Federal or New York statute or the Delaware General Corporation Law
or any rule or regulation or any judgment, order or decree known to such
counsel that has been issued pursuant to any Federal or New York statute or
the Delaware General Corporation Law by any court or governmental agency or
body having jurisdiction over the Company or any of its subsidiaries or any
of their properties or breach or result in any default under any indenture,
mortgage or other agreement or instrument known to such counsel;
(vi) the statements made in the Prospectus under the captions
"Description of Debt Securities" and "Certain Terms of Notes", insofar as
they purport to constitute summaries of certain terms of documents referred
to therein, constitute accurate summaries of the terms of such documents in
all material respects;
(vii) there are no contracts or other documents known to such counsel
that are required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement or
incorporated by reference therein that are not described and filed or
incorporated by reference as required; and
(viii) the Registration Statement has become effective under the
Securities Act, and to the best of such counsel's knowledge, no stop order
suspending the effectiveness of the Registration Statement has been issued
and no proceeding for that purpose has been instituted or threatened by the
Commission; the Prospectus was filed with the Commission pursuant to Rule
424(b) of the rules and regulations under the Securities Act.
In addition, such counsel shall state that they have participated in
conferences with certain officers and employees of the Company, representatives
of the Company's independent public accountants, the Underwriters and their
counsel, and although such counsel is not passing upon, and does not assume any
responsibility for, the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus and has not made any
independent check or verification thereof except to the extent described in (vi)
and (vii) above, on the basis of the foregoing, based upon their examination of
the Registration Statement and the Prospectus (including the documents
incorporated by reference therein), their investigations made in connection with
the preparation
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of the Registration Statement and the Prospectus (including the documents
incorporated by reference therein) and their participation in the conferences
referred to above, (i) such counsel is of the opinion that the Registration
Statement, as of its effective date, or if the Registration Statement has been
amended, as of the effective date of such amendment, and the Prospectus, as of
the date of the Prospectus Supplement relating to the Notes, complied as to form
in all material respects with the requirements of the Securities Act, the Trust
Indenture Act and the applicable rules and regulations of the Commission
thereunder, except that in each case such counsel expresses no opinion with
respect to the financial statements or other financial or statistical data
contained in the Registration Statement or the Prospectus, or with respect to
the Statement of Eligibility on Form T-1 of the Trustee, (ii) such counsel is of
the opinion that each document incorporated by reference in the Prospectus
pursuant to Item 12 of Form S-3, when such document was filed or became
effective, or if any incorporated documents was amended, when such amendment was
filed or became effective, complied as to form in all material respects with the
requirements of the Exchange Act and the applicable rules and regulations of the
Commission thereunder, except that in each case such counsel expresses no
opinion with respect to the financial statements or other financial or
statistical data contained in any such document, and (iii) such counsel has no
reason to believe that the Registration Statement, as of its effective date and
as of the date of the Prospectus Supplement relating to the Notes, contained any
untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading or that the Prospectus, as of the date of the Prospectus Supplement
relating to the Notes, contained, and the Prospectus (as amended or
supplemented) contains any untrue statement of a material fact or omitted or
omits to state any material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading,
except that in each case such counsel expresses no opinion or belief with
respect to the financial statements or other financial or statistical data
contained in the Registration Statement or the Prospectus, or with respect to
the Statement of Eligibility on Form T-1 of the Trustee.
(c) The Manager shall have received on and as of the Closing Date an
opinion of ▇▇▇▇ ▇▇▇▇▇▇▇▇, Senior Vice President, General Counsel and Secretary
of the Company (and, in the case of the opinions relating to (1) ERC
International Reinsurance Holding GmbH, Frankona
Ruckversicherungs-Aktiengesellschaft and Aachener Ruckversicherungs-Gesellschaft
Aktiengesellschaft, German counsel reasonably satisfactory to the Manager, (2)
Employers Re Corporation (UK) Ltd. and Employers Reassurance International
Limited, United Kingdom counsel reasonably satisfactory to the Manager and (3)
Employers Reinsurance International, Danish counsel reasonably satisfactory to
the Manager) dated the Closing Date, to the effect that:
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(i) each of Employers Reinsurance Corporation, Employers Reassurance
Corporation, ERC Life Reinsurance Corporation, Puritan Excess and Surplus
Lines Insurance Company, ERC International Reinsurance Holding GmbH,
Employers Reinsurance International, Employers Reassurance International
Limited, Frankona Ruckversicherungs-Aktiengesellschaft, Aachener
Ruckversicherungs- Gesellschaft Aktiengesellschaft and Employer Re
Corporation (UK) Ltd. (collectively, the "Subsidiaries") has been duly
incorporated and is validly existing and in good standing as a corporation
under the laws of its jurisdiction of incorporation with all requisite
corporate power and authority to own its properties and conduct its
business as described in the Prospectus;
(ii) each of the Company and the Subsidiaries is duly qualified to
transact business and is in good standing in the jurisdictions in which the
conduct of its business or the ownership of its property requires such
qualification, except where the failure to be so qualified or in good
standing would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole;
(iii) all of the issued shares of capital stock of or other ownership
interests in each Subsidiary have been duly and validly authorized and
issued and are fully paid and non-assessable and, except as set forth in
the Prospectus or for directors' qualifying shares, are owned directly or
indirectly by the Company, free and clear of all liens, encumbrances,
equities or claims;
(iv) the issuance and sale of the Notes by the Company as provided
herein, the compliance by the Company with all of the provisions of the
Notes, the Indenture and this Agreement and the consummation of the
transactions contemplated herein and therein will not contravene the
organizational documents of any of the Subsidiaries or result in any
violation of any of the terms or provisions of (x) any law, order, rule or
regulation (other than with respect to applicable state securities or Blue
Sky laws or state insurance securities laws, as to which such counsel need
not express any opinion) or (y) any indenture, mortgage or other agreement
or instrument known to such counsel by which the Company or any of its
subsidiaries is bound, except, in the case of this clause (y), for such
violations that would not, individually or in the aggregate, have a
material adverse affect on the Company and its subsidiaries, taken as a
whole;
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(v) each of the Company and the Subsidiaries has all licenses,
consents, approvals, authorizations, orders, registrations and
qualifications of or from, and has made all filings with, all courts and
governmental agencies and bodies necessary to own, lease, license and use
its properties and conduct its business as described or contemplated by the
Prospectus and is in compliance with all laws, orders, rules and
regulations of all courts and governmental agencies and bodies having
jurisdiction over it and any of its properties, except where the failure to
have any such license, consent, approval, authorization, order,
registration or qualification, or so to comply, would not, individually or
in the aggregate with all other such failures, have a material adverse
effect on the Company and its subsidiaries, taken as a whole; and, to the
best of such counsel's knowledge, after due inquiry, there is no pending or
threatened action, suit, proceeding or investigation that reasonably could
lead to the revocation, termination or suspension of, or render invalid or
otherwise ineffective, any such license, consent, approval, authorization,
order, registration or qualification, other than any such revocation,
termination, suspension, invalidity or ineffectiveness that would not,
individually or in the aggregate with all other such revocations,
terminations, suspensions, invalidities and ineffectiveness, have a
material adverse effect on the Company and its subsidiaries, taken as a
whole;
(vi) the statements contained in the Prospectus under the caption "The
Company -- Regulatory Matters" and in Item 8 of the Company's Registration
Statement on Form 10/A as filed with the Commission on February 8, 1996,
insofar as they purport to constitute summaries of certain proceedings,
legal matters or terms of documents referred to therein, constitute
accurate summaries of such proceedings, legal matters or terms of such
documents in all material respects; and
(vii) except as disclosed in the Prospectus, there are no pending or
threatened actions, suits or proceedings known to such counsel against the
Company or any of its subsidiaries that are required to be disclosed in the
Registration Statement that are not so disclosed.
In addition, such counsel shall state that he has participated in
conferences with certain officers and employees of the Company, representatives
of the Company's independent public accountants, the Underwriters and their
counsel, and although such counsel is not passing upon, and does not assume any
responsibility for, the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus and has not made any
independent check or verification thereof except to the extent described in (vi)
and (vii) above, on the basis of the foregoing, based upon his examination of
the
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Registration Statement and the Prospectus (including the documents incorporated
by reference therein), his investigations made in connection with the
preparation of the Registration Statement and the Prospectus (including the
documents incorporated by reference therein) and his participation in the
conferences referred to above, such counsel has no reason to believe that the
Registration Statement, as of its effective date and as of the date of the
Prospectus Supplement relating to the Notes, contained any untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading or that the
Prospectus, as of the date of the Prospectus Supplement relating to the Notes,
contained, and the Prospectus (as amended or supplemented) contains any untrue
statement of a material fact or omitted or omits to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that in each case such
counsel expresses no opinion or belief with respect to the financial statements
or other financial or statistical data contained in the Registration Statement
or the Prospectus, or with respect to the Statement of Eligibility on Form T-1
of the Trustee.
(d) The Manager shall have received on and as of the Closing Date an
opinion of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Underwriters, dated the
Closing Date, covering the matters in (ii), (iii), (iv) and (vi) of paragraph
(b) above.
In addition, such counsel shall state that they have participated in
conferences with certain officers and employees of the Company, representatives
of the Company's independent public accountants, the Underwriters and their
counsel, and although such counsel is not passing upon, and does not assume any
responsibility for, the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus and has not made any
independent check or verification thereof except to the extent described in (vi)
of paragraph (b) above, on the basis of the foregoing, based upon their
consideration of the Registration Statement and the Prospectus and their
participation in the conferences referred to above, (i) such counsel is of the
opinion that the Registration Statement, as of its effective date, or if the
Registration Statement has been amended, as of the effective date of such
amendment, and the Prospectus as of the date of the Prospectus Supplement
relating to the Notes, complied as to form in all material respects with the
requirements of the Securities Act, the Trust Indenture Act and the applicable
rules and regulations of the Commission thereunder, except that in each case
such counsel expresses no opinion with respect to the financial statements or
other financial or statistical data contained in the Registration Statement or
the Prospectus, or with respect to the Statement of Eligibility on Form T-1 of
the Trustee and (ii) such counsel has no reason to believe that the Registration
Statement, as of its effective date and as of the date
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of the Prospectus Supplement relating to the Notes, contained any untrue
statement of a material fact or omitted to state any material fact required to
be stated therein or necessary to make the statements therein not misleading or
that the Prospectus, as of the date of the Prospectus Supplement relating to the
Notes, contained, and the Prospectus (as amended or supplemented) contains any
untrue statement of a material fact or omitted or omits to state any material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that in each case such
counsel expresses no opinion or belief with respect to the financial statements
or other financial or statistical data contained in the Registration Statement
or the Prospectus, or with respect to the Statement of Eligibility on Form T-1
of the Trustee.
In rendering the opinions referred to in paragraphs (b) and (d) above, such
counsel may state that the opinions set forth in (ii) and (iii) of paragraph (b)
are subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles (whether considered in
a proceedings in equity or at law) and an implied covenant of good faith and
fair dealing.
(e) The Manager shall have received on the date of this Agreement, letters
dated such date, from each of Ernst & Young LLP, KPMG Peat Marwick LLP and C&L
Treuhand-Vereingung Deutsche Revision, independent public accountants, and on
the Closing Date, a letter dated the Closing Date from KPMG Peat Marwick LLP, in
each case in form and substance satisfactory to the Manager, containing
statements and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements and
certain financial and pro forma information contained in or incorporated by
reference into the Registration Statement and the Prospectus.
4. Covenants of the Company. In further consideration of the agreements of
the Underwriters herein contained, the Company covenants as follows:
(a) To furnish to the Manager, without charge (i) upon the request of the
Manager, two conformed copies of the Registration Statement (including exhibits
and documents incorporated by reference), and for delivery to each other
Underwriter a conformed copy of the Registration Statement (without exhibits but
including documents incorporated by reference) and (ii) during the period
mentioned in paragraph (c) below, as many copies of the Prospectus and any
amendments or supplements thereto prepared pursuant to paragraph (c) below as
the Manager may reasonably request.
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(b) To prepare and file (or mail for filing) with the Commission pursuant
to Rule 424 under the Securities Act as promptly as practicable after the
execution of this Agreement, a prospectus supplement in a form approved by the
Manager setting forth such information as is necessary so that the Prospectus,
when delivered to a purchaser of the Notes, will comply with law and, before
amending the Registration Statement or supplementing the Prospectus with respect
to the Notes, to furnish the Manager a copy of each such proposed amendment or
supplement.
(c) If, during such period after the first date of the public offering of
the Notes as in the opinion of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇ a prospectus is required by
law to be delivered in connection with sales by an Underwriter or dealer, any
event shall occur as a result of which it is necessary 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 to amend or supplement the Prospectus to comply with law,
forthwith to prepare and furnish, at its own expense, to the Underwriters and to
the dealers (whose names and addresses the Manager shall furnish to the Company)
to which Notes may have been sold by the Manager on behalf of the Underwriters
and to any other dealers upon request, either amendments or supplements to the
Prospectus so that 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.
(d) To endeavor to qualify the Notes for offer and sale under the
securities or Blue Sky laws or insurance securities laws of such jurisdictions
as the Manager shall reasonably request and to pay all expenses (including fees
and disbursements of counsel) reasonably incurred in connection with such
qualification and in connection with the determination of the eligibility of the
Notes for investment under the laws of such jurisdictions as the Manager may so
designate; provided that the Company shall not be required to qualify to do
business in any jurisdiction where it is not now qualified, to take any action
which would subject it to general or unlimited service of process in any
jurisdiction where it is not now subject or to qualify the Notes for offer and
sale in any jurisdiction (notified to the Manager prior to the execution of the
Underwriting Agreement) in which the Company is unable or unwilling to comply
with disclosure or reporting requirements imposed by such jurisdiction.
(e) To make generally available to its security holders as soon as
practicable an earnings statement (which need not be audited) covering a twelve-
month period beginning after the date of this Agreement which shall satisfy the
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provisions of Section 11(a) of the Securities Act and the rules and regulations
of the Commission thereunder.
5. Representations and Warranties; Indemnification and Contribution. The
Company represents and warrants to each Underwriter that (i) each document filed
by the Company pursuant to the Exchange Act which is incorporated by reference
in the Prospectus complied when so filed in all material respects with the
Exchange Act and the rules and regulations thereunder, and each document, if
any, hereafter filed and so incorporated by reference in the Prospectus will
comply when so filed in all material respects with the Exchange Act and the
rules and regulations thereunder; (ii) the Registration Statement and the
Prospectus comply, and the Registration Statement and the Prospectus (and any
amendments and supplements thereto, other than supplements relating only to debt
securities other than the Notes) will on the Closing Date comply in all material
respects with the Securities Act and the rules and regulations of the Commission
thereunder; (iii) each preliminary prospectus, if any, filed pursuant to Rule
424 under the Securities Act complied when so filed in all material respects
with the Securities Act and the rules and regulations thereunder; (iv) the
Registration Statement, at the time it became effective and as of the date of
the Prospectus Supplement relating to the Notes, did not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
the Prospectus as of the date of the Prospectus Supplement relating to the Notes
did not, and the Prospectus (as amended or supplemented, other than as to
supplements relating only to debt securities other than the Notes) on the
Closing Date will not, contain any untrue statement of a material fact or omit
to state any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading; except
that these representations and warranties do not apply to statements or
omissions in the Registration Statement or the Prospectus based upon information
furnished to the Company in writing by any Underwriter expressly for use
therein; and (v) the Company has complied with all provisions of Section
517.075, Florida Statutes (Chapter 92-198, Laws of Florida).
The Company agrees to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act from and against any and
all losses, claims, damages and liabilities caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement, any preliminary prospectus or the Prospectus (if used within the
period set forth in paragraph (c) of Section 4 hereof and as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state
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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 such untrue statement or omission or
alleged untrue statement or omission based upon information furnished in writing
to the Company by any Underwriter expressly for use therein; provided, however,
that the foregoing indemnity agreement with respect to any preliminary
prospectus shall not inure to the benefit of any Underwriter from whom the
person asserting any such losses, claims, damages or liabilities purchased
Notes, or any person controlling such Underwriter, if a copy of the Prospectus
(as then amended or supplemented if the Company shall have furnished any
amendment or supplements thereto) was not sent or given by or on behalf of such
Underwriter to such person, if required by law so to have been delivered, at or
prior to the written confirmation of the sale of the Notes to such person, and
if the Prospectus (as so amended or supplemented) would have cured the defect
giving rise to such loss, claim, damage or liability.
Each Underwriter agrees, severally and not jointly, to indemnify and hold
harmless the Company, its directors, its officers who sign the Registration
Statement and any person who controls the Company within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act to the same extent as
the foregoing indemnity from the Company to each Underwriter, but only with
reference to information relating to such Underwriter furnished in writing by
such Underwriter expressly for use in the Registration Statement, the Prospectus
or any preliminary prospectus.
In case any proceeding (including any governmental investigation) shall be
instituted involving any person in respect of which indemnity may be sought
pursuant to either of the two preceding paragraphs, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party, and any others the indemnifying party may designate in such proceeding
and shall pay the reasonable fees and expenses of such counsel related to such
proceeding. In any such proceeding, any indemnified party 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 party unless (i) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of such counsel or
(ii) the named parties to any proceeding (including any impleaded parties)
include both the indemnifying party and the indemnified party 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 party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be
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liable for the reasonable fees and expenses of more than one separate firm (in
addition to local counsel) for all such indemnified parties and that all such
fees and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by the Manager in the case of parties indemnified pursuant
to the second preceding paragraph and by the Company in the case of parties
indemnified pursuant to the first preceding paragraph. The indemnifying party
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 party agrees to indemnify the indemnified
party from and against any loss or liability by reason of such settlement or
judgment. No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened proceeding
in respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party, unless
such settlement includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such proceeding.
If the indemnification provided for in this Section 5 is unavailable to an
indemnified party under the second or third paragraphs hereof in respect of any
losses, claims, damages or liabilities referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriters on the other hand from the offering of the Notes or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company on the one hand and the Underwriters on the other in connection with
the statements or omissions 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 the Underwriters
on the other shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by the Company
and the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the Prospectus, bear to the aggregate
public offering price of the Notes. 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 statement of a material fact or the
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 5 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 which does not take account of the
equitable considerations provided for in the immediately preceding paragraph.
The amount paid or payable by an indemnified party 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 party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 5, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Notes underwritten by such Underwriter and distributed to the
public were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of 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 5 are several, in proportion to the
respective amounts of the Notes underwritten by each of such Underwriters, and
not joint. The remedies provided for in this Section 5 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
The indemnity and contribution agreements contained in this Section 5 and
the representations and warranties of the Company 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 by or on behalf of the Company, its
directors or officers or any person controlling the Company and (iii) acceptance
of and payment for any of the Notes.
6. Termination. Unless otherwise provided in the Underwriting Agreement,
this Agreement shall be subject to termination in the discretion of the Manager
at any time prior to the Closing Date, by notice given by the Manager to the
Company, if (i) trading in securities generally on the New York Stock Exchange
shall have been suspended or materially limited; (ii) a general moratorium on
commercial banking activities in the State of New York or the United States
shall have been declared by Federal or New York State authorities; or (iii)
there shall have occurred any material outbreak, or material escalation, of
hostilities or other national or international calamity or crisis, of such
magnitude and severity in its effect on the financial markets of the United
States, in the
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reasonable judgment of the Manager, as to prevent or materially impair the
marketing, or enforcement of contracts for sale, of the Notes.
If this Agreement shall be terminated by the Underwriters, or any of them,
because (a) 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 (b) for any
reason the Company shall be unable to perform its obligations under this
Agreement, the Company will 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 disbursements of their counsel)
reasonably incurred by such Underwriters in connection with the Notes.
7. Defaulting Underwriters. If, on the Closing Date any one or more of the
Underwriters shall fail or refuse to purchase Notes which it or they have agreed
to purchase hereunder on such date, and the aggregate principal amount of Notes
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 the
Notes to be purchased on such date, the other Underwriters shall be obligated
severally in the proportions that the principal amount of Notes set forth
opposite their respective names in the Underwriting Agreement bears to the
aggregate principal amount of Notes set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as the Manager may
specify, to purchase the Notes which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase on such date; provided that in no event
shall the principal amount of Notes that any Underwriter has agreed to purchase
be increased pursuant to this Section by an amount in excess of one-ninth of
such principal amount of Notes without the written consent of such Underwriter.
If, on the Closing Date any Underwriter or Underwriters shall fail or refuse to
purchase Notes which it or they have agreed to purchase hereunder on such date,
and the aggregate principal amount of Notes with respect to which such default
occurs is more than one-tenth of the aggregate principal amount of Notes to be
purchased on such date, and arrangements satisfactory to the Manager and the
Company for the purchase of such Notes are not made within 36 hours after such
default, this Agreement shall terminate without liability on the part of any
non-defaulting Underwriter or the Company. In any such case either the Manager
or the Company shall have the right to postpone the Closing Date but in no event
for longer than seven days, in order that the required changes, if any, 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.
8. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
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9. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
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