$200,000,000
SNAP-ON INCORPORATED
$200,000,000 6.25% Notes due August 15, 2011
Terms Agreement
New York, New York
August 14, 2001
Snap-on Incorporated
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Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Ladies and Gentlemen:
We (the "Representatives") understand that Snap-on Incorporated, a Delaware
corporation (the "Company"), proposes to issue and sell the Securities set forth
below (the "Underwritten Securities"). Subject to the terms and conditions set
forth or incorporated by reference herein, the underwriters named below (the
"Underwriters") offer to purchase, severally and not jointly, the respective
amounts of Underwritten Securities set forth below opposite their respective
names at the purchase price set forth below.
Principal
Amount of
Underwriters Debt Securities
------------ ---------------
Banc One Capital Markets, Inc. ........................ $85,000,000
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc............................... 85,000,000
Banc of America Securities LLC......................... 7,000,000
Barclays Capital Inc................................... 7,000,000
Mizuho International plc............................... 7,000,000
U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc......................... 7,000,000
Banco Bilbao Vizcaya Argentaria S.A.................... 2,000,000
Total................................ $200,000,000
============
The Underwritten Securities shall have the following terms:
Title of Debt Securities: $200,000,000 6.25% Notes due August 15,
2011
Currency: United States Dollars
Principal amount to be issued: $200,000,000
Current ratings:
▇▇▇▇▇'▇ Investors Service, Inc.: A1
Standard & Poor's Corporation: A+
Interest rate: 6.25%
Interest payment dates: February 15 and August 15
Date of maturity: August 15, 2011
Redemption provisions: Make whole, T + 20 basis points
Sinking fund requirements: None
Delayed Delivery Contracts: Not authorized
Price to public: 99.429%, plus accrued interest, if any,
from August 17, 2001
Purchase price: 98.779%, plus accrued interest, if any,
from August 17, 2001 (payable in
same-day funds)
Other terms:
Closing date and location: August 17, 2001
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▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
All the provisions contained in the document attached as Annex A hereto
entitled "Snap-on Incorporated--Debt Securities, Debt Warrants, Preferred Stock,
Preferred Warrants and Currency Warrants-Underwriting Agreement Basic
Provisions" are hereby incorporated by reference in their entirety herein and
shall be deemed to be a part of this Terms Agreement to the same extent as if
such provisions had been set forth in full herein. Terms defined in such
document are used herein as therein defined.
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Please accept this offer no later than 11:59 o'clock P.M. (New York
City time) on August 14, 2001 by signing a copy of this Terms Agreement in the
space set forth below and returning the signed copy to us.
Very truly yours,
BANC ONE CAPITAL MARKETS, INC.
▇▇▇▇▇▇▇ ▇▇▇▇▇ BARNEY INC.
BY: ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
Acting on behalf of themselves and the
other named Underwriters
Accepted:
SNAP-ON INCORPORATED
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Senior Vice President-Finance
And Chief Financial Officer
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ANNEX A
SNAP-ON INCORPORATED
(a Delaware corporation)
Debt Securities, Debt Warrants, Preferred Stock,
Preferred Warrants and Currency Warrants
UNDERWRITING AGREEMENT BASIC PROVISIONS
Snap-on Incorporated, a Delaware corporation (the "Company"), proposes
to issue and sell, from time to time in one or more offerings and on terms and
in the respective amounts to be determined at the time of sale, its senior debt
securities (the "Debt Securities"), warrants to purchase Debt Securities (the
"Debt Warrants"), preferred stock, par value $1.00 per share (the "Preferred
Stock"), warrants to purchase Preferred Stock (the "Preferred Warrants") or
currency warrants (the "Currency Warrants"). As used herein, "Securities" shall
mean the Debt Securities, Debt Warrants, Preferred Stock, Preferred Warrants,
Currency Warrants or any combination thereof; and "Warrant Securities" shall
mean the Debt Securities or Preferred Stock issuable upon exercise of Debt
Warrants or Preferred Warrants, respectively. The Debt Warrants may be offered
together with Debt Securities or separately. The Preferred Warrants may be
offered together with Preferred Stock or separately.
The Debt Securities will be issued under an indenture dated as of
September 15, 1995 (the "Indenture") between the Company and U.S. Bank, National
Association (successor in interest to Firstar Trust Company), as trustee (the
"Trustee). The Debt Warrants, Preferred Warrants and Currency Warrants will be
issued under one or more warrant agreements (each a "Debt Warrant Agreement,"
"Preferred Warrant Agreement" or "Currency Warrant Agreement," respectively),
between the Company and the warrant agent identified therein (each a "Warrant
Agent"). The terms and rights of any particular issue of Securities shall be as
specified in the Terms Agreement (as defined below) relating thereto and in or
pursuant to the Indenture, Debt Warrant Agreement, Preferred Warrant Agreement
or Currency Warrant Agreement or, with respect to the Preferred Stock, the
Restated Certificate of Incorporation, as amended, of the Company (including the
Certificate of Designation with respect to any Preferred Stock (the "Certificate
of Designation")) (the "Certificate of Incorporation"), as the case may be (each
a "Securities Agreement"). Each issue of Securities may vary, as applicable, as
to aggregate principal amount, number of shares or warrants, maturity date,
duration and exercise price of warrants, interest or dividend rate or formula
and timing of payments thereof, redemption provisions and sinking fund
requirements, if any, and any other variable terms which the applicable
Securities Agreement contemplates may be set forth in the Securities as issued
from time to time.
This is to confirm the arrangements with respect to the purchase of
Securities (the "Underwritten Securities") from the Company by the
Representatives and the several Underwriters listed in the applicable terms
agreement entered into between the Representatives and the Company to which this
Underwriting Agreement is attached as Annex A (the "Terms Agreement"). With
respect to any particular Terms Agreement, the Terms Agreement, together with
the provisions hereof incorporated therein by reference, is herein referred to
as the "Agreement." Terms defined in the Terms Agreement are used herein as
therein defined.
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The Company meets the requirements for the use of Form S-3 under the
Securities Act of 1933, as amended (the "1933 Act"), and has filed with the
Securities and Exchange Commission (the "Commission") a registration statement
on Form S-3 (No. 33-55607) for the registration of the Securities and the
offering thereof from time to time in accordance with Rule 415 under the 1933
Act, and has filed such amendments thereto as may have been required to the date
of the Terms Agreement. Such registration statement, as amended, has been
declared effective by the Commission, and the Indenture has been qualified under
the Trust Indenture Act of 1939, as amended (the "1939 Act"). Such registration
statement, as amended, including all documents incorporated therein by reference
and the information deemed to be part of the registration statement pursuant to
Rule 430A of the 1933 Act Regulations (defined below), as from time to time
amended pursuant to the 1933 Act, the Securities Exchange Act of 1934, as
amended (the "1934 Act"), or otherwise, is referred to herein as the
"Registration Statement." The prospectus contained in the Registration Statement
at its effective date, including any Preliminary Prospectus Supplement (as
defined below) is herein referred to as the "Basic Prospectus." Any preliminary
prospectus supplement to the Basic Prospectus which describes the Underwritten
Securities and the offering thereof and is used prior to the filing of the
Prospectus (as defined below) is herein referred to as a "Preliminary Prospectus
Supplement." The prospectus supplement relating to the sale of Underwritten
Securities, in the form first filed pursuant to Rule 424 (b) of the 1933 Act
after the execution of the Terms Agreement (a "Prospectus Supplement"), together
with the Basic Prospectus, or, if no filing is required pursuant to said Rule
424(b), the form of prospectus relating to the Underwritten Securities,
including the Basic Prospectus, is referred to herein as the "Prospectus";
provided, however, that a Prospectus Supplement shall be deemed to have
supplemented the Prospectus only with respect to the offering of Underwritten
Securities to which it relates. All references in this Agreement to financial
statements and schedules and other information which is "contained," "included"
or "stated" in the Registration Statement or the Prospectus (and all other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is or is deemed
to be incorporated by reference in the Registration Statement or the Prospectus,
as the case may be; and all references in this Agreement to amendments or
supplements to the Registration Statement, the Basic Prospectus, any Preliminary
Prospectus Supplement or the Prospectus shall be deemed to mean and include the
filing of any document under the 1934 Act which is or is deemed to be
incorporated by reference in the Registration Statement, the Basic Prospectus,
any Preliminary Prospectus Supplement or the Prospectus, as the case may be.
SECTION 1. REPRESENTATIONS AND WARRANTIES.
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(a) The Company represents and warrants to the Representatives and to
each Underwriter named in a Terms Agreement as of the date thereof (the
"Representation Date"), as follows:
(i) At the time the Registration Statement became effective, the
Registration Statement complied, and as of each applicable Representation
Date, will comply, in all material respects with the requirements of the
1933 Act and the rules and regulations of the Commission thereunder (the
"1933 Act Regulations") and the 1939 Act and the rules and regulations of
the Commission thereunder (the "1939 Act Regulations"). The Registration
Statement, at the time the Registration Statement became effective, did
not,
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and at each time thereafter at which any amendment becomes effective and as
of the applicable Representation Date, will not, contain any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading. The Basic Prospectus, as of its date, and the Prospectus (and
any supplements thereto), as of the applicable Representation Date, did
not, and at the Closing Time referred to in Section 2 hereof, will not,
contain an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided,
however, that the representations and warranties in this subsection shall
not apply to statements in or omissions from the Registration Statement or
Prospectus made in reliance upon and in conformity with information
furnished to the Company in writing by any Underwriter through the
Representatives expressly for inclusion in the Registration Statement or
Prospectus or to that part of the Registration Statement which constitutes
the Statement of Eligibility under the 1939 Act on Form T-1 (the "Form
T-1") of the Trustee under the Indenture.
(ii) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, which have certified certain financial
statements of the Company included in the Registration Statement, are
independent public accountants as required by the 1933 Act and the 1933 Act
Regulations.
(iii) The financial statements included in the Registration Statement
and the Prospectus present fairly the financial position of the Company and
its consolidated subsidiaries as of the dates indicated and the results of
their operations and cash flows for the periods specified; said financial
statements comply as to form with the applicable accounting requirements of
the 1933 Act; except as otherwise stated in the Registration Statement,
said financial statements have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis during the
periods involved; the supporting schedules contained in the Registration
Statement present fairly the information required to be stated therein; and
the Company's ratios of earnings to fixed charges (actual and, if any, pro
forma) included in the Prospectus under the captions "Ratio of Earnings to
Fixed Charges" and in Exhibit 12 to the Registration Statement have been
calculated in compliance with Item 503(d) of Regulation S-K of the
Commission.
(iv) The documents incorporated or deemed to be incorporated by
reference in the Prospectus, at the time they were or hereafter are filed
with the Commission, complied and will comply in all material respects with
the requirements of the 1934 Act, and the rules and regulations of the
Commission thereunder (the "1934 Act Regulations"), and, when read together
and with the other information in the Prospectus, at the time the
Registration Statement became effective and at the time any amendments
thereto become effective or thereafter during the period specified in
Section 3(b) hereof, did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(v) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, except as otherwise stated
therein: (A) there
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has been no material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of
the Company and its subsidiaries considered as one enterprise, whether or
not arising in the ordinary course of business (a "Material Adverse
Change"), (B) there have been no transactions entered into by the Company
or any of its subsidiaries, other than those in the ordinary course of
business, which are material with respect to the Company and its
subsidiaries considered as one enterprise and (C) except for regular
quarterly dividends on the Company's common stock, par value $1.00 per
share (the "Common Stock"), in amounts per share that are consistent with
past practice, there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital stock.
(vi) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware with
corporate power and authority to own, lease and operate its properties and
to conduct its business as described in the Prospectus; and the Company is
duly qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify would not have a material
adverse effect on the condition, financial or otherwise, or on the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise (a "Material Adverse Effect").
(vii) Each subsidiary of the Company which is a significant subsidiary
as defined in Rule 405 of the 1933 Act Regulations (collectively, the
"Significant Subsidiaries" and individually, a "Significant Subsidiary")
has been duly incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, has
corporate power and authority to own, lease and operate its properties and
to conduct its business as described in the Prospectus; each such
Significant Subsidiary is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in which
such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure to
so qualify would not have a Material Adverse Effect; and all of the issued
and outstanding shares of capital stock of each such Significant Subsidiary
have been duly authorized and validly issued, are fully paid and
non-assessable and are owned by the Company, directly or through
subsidiaries (other than directors' qualifying shares with respect to
certain of the Company's non-United States subsidiaries as required by
law), free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity.
(viii) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus; and all of the issued and
outstanding shares of capital stock of the Company have been duly
authorized and validly issued and are fully paid and non-assessable.
(ix) Neither the Company nor any of its Significant Subsidiaries is in
violation of its charter or by-laws; and neither the Company nor any of its
Significant Subsidiaries is in default in the performance or observance of
any obligation, agreement, covenant or
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condition contained in any contract, indenture, mortgage, loan agreement,
note, lease or other agreement or instrument to which the Company or any of
its Significant Subsidiaries is a party or by which any of them may be
bound, or to which any of the property or assets of the Company or any of
its Significant Subsidiaries is subject, except where such default would
not have a Material Adverse Effect; and the execution, delivery and
performance of this Agreement, the applicable Securities Agreement and the
Securities and the consummation of the transactions contemplated herein and
therein, have been duly authorized by all necessary corporate action and
will not conflict with or 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 its Significant
Subsidiaries pursuant to, any contract, indenture, mortgage, loan
agreement, note, lease or other agreement or instrument to which the
Company or any of its Significant Subsidiaries is a party or by which any
of them may be bound, or to which any of the property or assets of the
Company or any of its Significant Subsidiaries is subject, nor will such
action result in any violation of the provisions of the charter or by-laws
of the Company or any of its Significant Subsidiaries or any applicable
law, administrative regulation or court decree.
(x) No holders of securities of the Company have rights to the
registration of such securities under the Registration Statement.
(xi) This Agreement and the Delayed Delivery Contracts, if any, have
been duly authorized, executed and delivered by the Company.
(xii) The Underwritten Securities have been duly authorized for
issuance and sale by the Company pursuant to this Agreement (or will have
been so authorized prior to each issuance of Underwritten Securities) and,
when issued, authenticated and delivered pursuant to the provisions of this
Agreement and the applicable Securities Agreement against payment of the
consideration therefor in accordance with this Agreement, any Underwritten
Securities constituting capital stock of the Company will be validly issued
and fully paid and non-assessable and any other Underwritten Securities
will be valid and binding obligations of the Company, in each case entitled
to the benefits of the applicable Securities Agreement and enforceable in
accordance with their terms; and the Warrant Securities, if any, have been
duly authorized by the Company and, when executed and authenticated as
specified in the applicable Securities Agreement, and delivered against
payment pursuant to such Securities Agreement, any Warrant Securities
constituting capital stock of the Company will be validly issued and fully
paid and non-assessable and any other Warrant Securities will be valid and
binding obligations of the Company, in each case entitled to the benefits
of the applicable Securities Agreement and enforceable in accordance with
their terms.
(xiii) The applicable Securities Agreement has been duly authorized,
executed and delivered by the Company and, in the case of the Certificate
of Designation, has been filed with the Secretary of State of the State of
Delaware and, in the case of the Indenture, has been duly qualified under
the 1939 Act, and, assuming due authorization, execution and delivery by
the Trustee, in the case of the Indenture, and the Warrant Agent, in the
case of any Warrant Agreement, constitutes a valid and binding obligation
of the
5
Company, enforceable in accordance with its terms. At the time the
Registration Statement became effective and at the Closing Time, the
Indenture did or will comply in all material respects with the applicable
requirements of the 1939 Act and the 1939 Act Regulations.
(xiv) The Underwritten Securities and the applicable Securities
Agreement will conform in all material respects to the respective
statements relating thereto contained in the Prospectus and will be in
substantially the respective forms filed or incorporated by reference, as
the case may be, as exhibits to the Registration Statement; and the
issuance of the Underwritten Securities is not subject to preemptive or
other similar rights.
(xv) The Debt Securities rank and will rank on a parity with all
unsecured indebtedness (other than subordinated indebtedness) of the
Company that is outstanding on the date hereof or that may be incurred
hereafter, and senior to all subordinated indebtedness of the Company that
is outstanding on the date hereof or that may be incurred hereafter.
(xvi) There is no action, suit or proceeding before or by any court or
governmental agency or body, domestic or foreign, now pending, or, to the
knowledge of the Company, threatened, against or affecting the Company or
any of its subsidiaries, which is required to be disclosed in the
Registration Statement or which might result in a Material Adverse Effect
(other than as disclosed in the Registration Statement) or which might
materially and adversely affect the consummation of the transactions
contemplated by this Agreement; all pending legal or governmental
proceedings to which the Company or any of its subsidiaries is a party or
of which any of their respective property or assets is the subject which
are not described in the Registration Statement, including ordinary routine
litigation incidental to the business, are, considered in the aggregate,
not material; and there are no contracts or documents of the Company or any
of its subsidiaries which are required to be filed as exhibits to the
Registration Statement by the 1933 Act, the 1933 Act Regulations or the
1939 Act which have not been so filed.
(xvii) Each of the Company and its Significant Subsidiaries has good
title to all properties owned by them, in each case free and clear of all
liens, encumbrances and defects except (A) such as singly or in the
aggregate do not materially interfere with the use made and proposed to be
made of such properties, (B) as described in the Prospectus or (C) as
singly or in the aggregate could not reasonably be expected to have a
Material Adverse Effect.
(xviii) The Company and its Significant Subsidiaries own or possess,
or can acquire on reasonable terms, the patents, patent rights, licenses,
inventions, copyrights, know how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks and trade names
(collectively, "patent and proprietary rights") presently employed by them
in connection with the business now operated by them, except where the
failure to so own or possess such patent and proprietary rights would not
have a Material Adverse Effect, and neither the Company nor any of its
Significant Subsidiaries has received any notice or is otherwise aware of
any infringement of or conflict with asserted rights of others
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with respect to any patent or proprietary rights, or any facts which would
render any patent and proprietary rights invalid or inadequate to protect
the interest of the Company or any of its Significant Subsidiaries therein,
and which infringement or conflict (if the subject of an unfavorable
decision, ruling or finding) or invalidity or inadequacy, singly or in the
aggregate, would result in a Material Adverse Effect.
(xix) No material labor dispute with the employees of the Company or
any of its subsidiaries exists or, to the knowledge of the Company, is
imminent; and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its principal suppliers,
manufacturers or contractors which might be expected to result in a
Material Adverse Effect.
(xx) No authorization, approval, consent or order of any court or
governmental authority or agency is necessary in connection with the sale
of the Underwritten Securities to the Underwriters hereunder, except such
as may be required under the 1933 Act, the 1933 Act Regulations, the 1939
Act or state securities laws. Neither the Company nor any of its affiliates
is presently "doing any business" with the government of Cuba or with any
person or affiliate located in Cuba, as such term is defined by the Florida
Department of Banking and Finance.
(xxi) The Company and its Significant Subsidiaries possess such
certificates, authorizations or permits issued by the appropriate state,
federal or foreign regulatory agencies or bodies necessary to conduct the
business now operated by them, except where the failure to so possess such
certificates, authorizations or permits would not have a Material Adverse
Effect, and neither the Company nor any of its Significant Subsidiaries has
received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization or permit which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a Material Adverse Effect.
(xxii) The Company and each of its Significant Subsidiaries maintain
insurance policies or reserves with respect to such insurable properties,
potential liabilities and occurrences that merit or require catastrophic
insurance in amounts deemed adequate in the reasonable opinion of the
Company's management; and all such insurance policies are in full force and
effect.
(xxiii) Neither the Company nor any of its subsidiaries has violated
any environmental, safety or similar law or regulation applicable to its
business relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), lacks any permits, licenses or other
approvals required of them under applicable Environmental Laws or is
violating any terms and conditions of any such permit, license or approval
except in each case as could not have a Material Adverse Effect. Except as
disclosed in the Registration Statement, neither the Company nor any of its
subsidiaries has been named as a "potentially responsible party" under the
Comprehensive Environmental Response, Compensation, and Liability Act of
1980, as amended.
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(xxiv) In the ordinary course of its business, the Company
periodically reviews the effect of Environmental Laws on the business,
operations and material properties of the Company and its subsidiaries, in
the course of which it identifies and evaluates associated costs and
liabilities (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance
with Environmental Laws, or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to third
parties). On the basis of such review, the Company has reasonably concluded
that such associated costs and liabilities would not, singly or in the
aggregate, have a Material Adverse Effect.
(xxv) Except as disclosed in the Registration Statement and the
Prospectus, the Company (A) does not have any material lending or other
relationship with any bank or lending affiliate of Banc One Capital
Markets, Inc. or ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. and (B) does not intend to use
any of the proceeds from the sale of the Underwritten Securities hereunder
to repay any outstanding debt owed to any affiliate of Banc One Capital
Markets, Inc. or ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
(xxvi) Neither the Company nor any of its subsidiaries is, or as a
result of the transactions contemplated by the Prospectus or any Securities
Agreement would be, required to make any filing or to register under the
Investment Company Act of 1940, as amended.
(b) Any certificate signed by any officer of the Company and delivered
to the Representatives or to counsel for the Underwriters in connection with an
offering of Underwritten Securities shall be deemed a representation and
warranty by the Company, as to the matters covered thereby, to each Underwriter
participating in such offering.
SECTION 2. PURCHASE AND SALE. The obligations of the Underwriters to
purchase, and the Company to sell, the Underwritten Securities shall be
evidenced by the Terms Agreement. The Terms Agreement specifies the principal
amount or number of Underwritten Securities, the names of the Underwriters
participating in the offering (subject to substitution as provided in Section 9
hereof) and the principal amount or number of Underwritten Securities which each
Underwriter severally has agreed to purchase, the purchase price to be paid by
the Underwriters for the Underwritten Securities, the initial public offering
price, if any, of the Underwritten Securities, any delayed delivery arrangements
and any terms of the Underwritten Securities not already specified in the
Securities Agreement pursuant to which they are being issued (including, but not
limited to, designations, denominations, current ratings, interest or dividend
rates or formulas and payment dates, exercise prices, maturity dates, redemption
provisions and sinking fund requirements). In addition, each Terms Agreement
relating to any Preferred Stock shall specify whether the Company has agreed to
grant to the Underwriters, an option to purchase additional Preferred Stock
subject to such option (the "Option Securities"). As used herein, the term
"Underwritten Securities" shall include all or any portion of the Option
Securities agreed to be purchased by the Underwriters as provided herein, if
any.
The several commitments of the Underwriters to purchase Underwritten
Securities pursuant to the Terms Agreement shall be deemed to have been made on
the basis of
8
the representations and warranties herein contained and shall be subject to the
terms and conditions herein set forth.
In addition, on the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company
may grant, if so provided in the Terms Agreement relating to any Preferred
Stock, an option to the Underwriters named in such Terms Agreement, severally
and not jointly, to purchase up to the number of Option Securities set forth
therein at the same price per share as is applicable to the Preferred Stock.
Such option, if granted, will expire 30 days or such lesser number of days as
may be specified in the Terms Agreement after the Representation Date relating
to the Preferred Stock, and may be exercised in whole or in part from time to
time only for the purpose of covering over-allotments which may be made in
connection with the offering and distribution of the Preferred Stock upon notice
by the Representatives to the Company setting forth the number of Option
Securities as to which the several Underwriters are then exercising the option
and the time and date of payment and delivery for such Option Securities. Any
such time and date of delivery (a "Date of Delivery") shall be determined by the
Representatives, but shall not be later than seven full business days and not
earlier than two full business days after the exercise of said option, unless
otherwise agreed upon by the Representatives and the Company. If the option is
exercised as to all or any portion of the Option Securities, each of the
Underwriters, acting severally and not jointly, will purchase that proportion of
the total number of Option Securities then being purchased which the number of
shares of Preferred Stock each such Underwriter has agreed to purchase as set
forth in the related Terms Agreement bears to the total number of shares of
Preferred Stock, subject to such adjustments as the Representatives in their
discretion shall make to eliminate any sales or purchases of fractional shares.
Payment of the purchase price for, and delivery of, any Underwritten
Securities to be purchased by the Underwriters shall be made at 10:00 A.M., New
York City time, on the third business day (unless postponed in accordance with
the provisions of Section 9 hereof) following the date of the Terms Agreement or
such other time as shall be agreed upon by the Representatives and the Company
(each such time and date being referred to as a "Closing Time"); provided,
however, that in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates representing, such Option Securities, shall be made at the
office of ▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, or at such other place as shall be agreed upon by the Representatives and
the Company, on each Date of Delivery as specified in the notice from the
Representatives to the Company. Delivery of the Underwritten Securities shall be
made to the Representatives for the respective accounts of the several
Underwriters against payment by the several Underwriters through the
Representatives of the purchase price thereof to or upon the order of the
Company by wire transfer payable in same-day funds to an account specified by
the Company. Delivery of the Underwritten Securities shall be made through the
facilities of The Depository Trust Company unless the Representatives shall
otherwise instruct.
If authorized by the Terms Agreement, the Underwriters named therein
may solicit offers to purchase Underwritten Securities from the Company pursuant
to delayed delivery contracts ("Delayed Delivery Contracts") substantially in
the form of Exhibit A hereto with such changes therein as the Company may
approve. As compensation for arranging Delayed Delivery Contracts, the Company
will pay to the Representatives at Closing Time, for
9
the accounts of the Underwriters, the fee specified in the Terms Agreement for
each of the Underwritten Securities for which Delayed Delivery Contracts are
made at Closing Time. Any Delayed Delivery Contracts are to be with
institutional investors of the types set forth in the Prospectus Supplement. At
Closing Time the Company will enter into Delayed Delivery Contracts (for not
less than the minimum principal amount or number of Underwritten Securities per
Delayed Delivery Contract specified in the applicable Terms Agreement) with all
purchasers proposed by the Underwriters previously approved by the Company as
provided below, but not for an aggregate principal amount or number of
Underwritten Securities in excess of that specified in the Terms Agreement. The
Underwriters will not have any responsibility for the validity or performance of
Delayed Delivery Contracts.
The Representatives shall submit to the Company, at least three
business days prior to Closing Time, the names of any institutional investors
with which it is proposed that the Company will enter into Delayed Delivery
Contracts and the principal amount or number of Underwritten Securities, as the
case may be, to be purchased by each of them, and the Company will advise the
Representatives, at least two business days prior to Closing Time, of the names
of the institutions with which the making of Delayed Delivery Contracts is
approved by the Company and the principal amount or number of Underwritten
Securities, as the case may be, to be covered by each such Delayed Delivery
Contract.
The principal amount or number of Underwritten Securities, as the case
may be, agreed to be purchased by the respective Underwriters pursuant to the
Terms Agreement shall be reduced by the principal amount or number of
Underwritten Securities, as the case may be, covered by Delayed Delivery
Contracts as to each Underwriter as set forth in a written notice delivered by
the Representatives to the Company; provided, however, that the total principal
amount or number of Underwritten Securities, as the case may be, to be purchased
by all Underwriters shall be the total amount or number of Underwritten
Securities, as the case may be, covered by the applicable Terms Agreement, less
the principal amount or number of Underwritten Securities, as the case may be,
covered by Delayed Delivery Contracts.
SECTION 3. COVENANTS OF THE COMPANY. The Company covenants with the
Representatives, and with each Underwriter participating in the offering of
Underwritten Securities, as follows:
(a) Immediately following the execution of the Terms Agreement, the
Company will prepare a Prospectus Supplement setting forth the principal amount
or number of Underwritten Securities, as the case may be, covered thereby and
any of their terms not otherwise set forth in the Prospectus, the names of the
Underwriters participating in the offering and the principal amount or the
number of Underwritten Securities which each severally has agreed to purchase,
the price at which the Underwritten Securities are to be purchased by the
Underwriters from the Company, the initial public offering price, the selling
concession and reallowance, if any, any delayed delivery arrangements, and such
other information as the Representatives and the Company deem appropriate in
connection with the offering of the Underwritten Securities. The Company will
promptly transmit copies of the Prospectus Supplement to the Commission for
filing pursuant to Rule 424 of the 1933 Act Regulations and will furnish to the
Underwriters named therein as many copies of the Prospectus and such Prospectus
Supplement as the Representatives shall reasonably request.
10
(b) If, at any time when the Prospectus is required by law to be
delivered in connection with sales of the Underwritten Securities, any event
shall occur or condition exist as a result of which it is necessary, in the
opinion of counsel for the Underwriters, to further amend or supplement the
Prospectus in order that the Prospectus will not include an untrue statement of
a material fact or omit to state any material fact necessary to make the
statements therein not misleading in the light of circumstances existing at the
time it is delivered to a purchaser or if it shall be necessary, in the opinion
of counsel for the Underwriters, at any such time to amend or supplement the
Registration Statement or the Prospectus in order to comply with the
requirements of the 1933 Act or the 1933 Act Regulations, the Company will
forthwith (i) notify the Representatives of such event; (ii) prepare and file
with the Commission such amendment or supplement (in form and substance
reasonably satisfactory to counsel for the Underwriters), whether by filing
documents pursuant to the 1934 Act or otherwise, as may be necessary to correct
such untrue statement or omission or to make the Registration Statement and
Prospectus comply with such requirements; and (iii) supply any supplemented
Prospectus to the Representatives in such quantities as they may reasonably
request.
(c) With respect to each sale of Underwritten Securities, the Company
will make generally available to its security holders as soon as practicable,
but not later than 90 days after the close of the period covered thereby,
earnings statements (in forms complying with the provisions of Rule 158 of the
1933 Act Regulations) covering 12-month periods beginning, in each case, not
later than the first day of the Company's fiscal quarter next following the
"effective date" of the Registration Statement or a post-effective amendment
thereto (as defined in said Rule 158).
(d) The Company will use the net proceeds received by it from the sale
of the Underwritten Securities in the manner described in the Prospectus under
the caption "Use of Proceeds."
(e) At any time when the Prospectus is required by law to be delivered
in connection with sales of the Underwritten Securities, the Company will give
the Representatives notice of its intention to file or prepare any amendment to
the Registration Statement (including any post-effective amendment) or any
amendment or supplement to the Prospectus (including any revised prospectus
which the Company proposes for use by the Underwriters in connection with the
offering of the Underwritten Securities which differs from the prospectus on
file at the Commission at the time the Registration Statement becomes effective,
whether or not such revised prospectus is required to be filed pursuant to Rule
424(b) of the 1933 Act Regulations), whether pursuant to the 1934 Act, the 1933
Act or otherwise, will furnish the Representatives with copies of any such
amendment or supplement within a reasonable amount of time prior to such
proposed filing or use, as the case may be, and will not file any such amendment
or supplement or use any such prospectus to which the Representatives or counsel
for the Underwriters shall reasonably object.
(f) At any time when the Prospectus is required by law to be delivered
in connection with sales of the Underwritten Securities, the Company will notify
the Representatives immediately, and confirm such notice in writing, of (i) the
effectiveness of any amendment to the Registration Statement, (ii) the mailing
or the delivery to the Commission for filing of any supplement to the Prospectus
or any document to be filed pursuant to the 1934 Act,
11
(iii) the receipt of any comments from the Commission with respect to the
Registration Statement, the Prospectus or any supplement to the Prospectus, (iv)
any request by the Commission for any amendment to the Registration Statement or
any amendment or supplement to the Prospectus or for additional information and
(v) the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any proceedings
for that purpose. The Company will make every reasonable effort to prevent the
issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible moment.
(g) The Company will deliver to the Representatives as many signed
copies of the Registration Statement as originally filed and of each amendment
thereto, whether filed before or after the Registration Statement becomes
effective (including exhibits filed therewith or incorporated by reference
therein and documents incorporated or deemed to be incorporated by reference in
the Prospectus) as the Representatives may reasonably request and will also
deliver to the Representatives a conformed copy of the Registration Statement as
originally filed and of each amendment thereto (without exhibits) for each of
the Underwriters.
(h) The Company will furnish to each Underwriter, from time to time
during the period when the Prospectus is required by law to be delivered in
connection with sales of the Underwritten Securities, such number of copies of
the Prospectus (as amended or supplemented) as such Underwriter may reasonably
request for the purposes contemplated by the 1933 Act, the 1933 Act Regulations,
the 1934 Act or the 1934 Act Regulations.
(i) The Company will endeavor, in cooperation with the Underwriters, to
qualify the Underwritten Securities for offering and sale under the applicable
securities laws of such jurisdictions in the United States as the
Representatives may designate; provided, however, that the Company shall not be
obligated to file any general consent to service of process or to qualify as a
foreign corporation in any jurisdiction in which it is not so qualified. The
Company will maintain such qualifications in effect for as long as may be
required for the distribution of the Underwritten Securities. The Company will
file such statements and reports as may be required by the laws of each
jurisdiction in which the Underwritten Securities have been qualified as above
provided. The Company will inform the Florida Department of Banking and Finance
if at any time prior to the completion of the distribution of the Underwritten
Securities by the Underwriters it commences engaging in business with the
government of Cuba or with any person located in Cuba, such information to be
provided within 90 days after the commencement thereof, or after a change occurs
with respect to previously reported information.
(j) The Company will not claim voluntarily, and will resist actively
any attempts to claim the benefit of, any usury laws against the holders of the
Debt Securities.
(k) The Company, during the period when the Prospectus is required to
be delivered by law in connection with the sale of the Underwritten Securities,
will file all documents required to be filed with the Commission pursuant to
Section 13, 14 or 15 of the 1934 Act within the time periods required by the
1934 Act and the 1934 Act Regulations.
(l) Between the date of the Terms Agreement and the later of
termination of any trading restrictions or Closing Time with respect to the
Underwritten Securities covered
12
thereby, except for the issuance of Warrant Securities upon the exercise of Debt
Warrants or Preferred Warrants, if any, the Company will not, without the
Representatives' prior written consent, directly or indirectly, sell, offer to
sell, enter into any agreement to sell, grant any option for the sale of, or
otherwise dispose of, any securities of or guaranteed by the Company or any of
its subsidiaries which are similar to the Underwritten Securities covered by
such Terms Agreement, or any securities convertible into or exchangeable or
exercisable for any such Underwritten Securities or such similar securities,
including additional Securities.
(m) If provided for in the Term Agreement and requested by the
Representatives, the Company will use its best efforts to effect the listing of
the Underwritten Securities and any Warrant Securities issuable upon exercise of
the Underwritten Securities on a national securities exchange.
SECTION 4. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several obligations
of the Underwriters to purchase Underwritten Securities pursuant to the Terms
Agreement are subject to the accuracy of the representations and warranties on
the part of the Company herein contained, to the accuracy of the statements of
the Company's officers made in any certificate furnished pursuant to the
provisions hereof, to the performance by the Company of all of its covenants and
other obligations hereunder and to the following further conditions:
(a) At the applicable Closing Time (i) no stop order suspending the
effectiveness of the Registration Statement shall have been issued under the
1933 Act or proceedings therefor initiated or threatened by the Commission, (ii)
the ratings assigned by ▇▇▇▇▇'▇ Investors Service, Inc. and Standard & Poor's
Corporation to the Underwritten Securities or any other securities of, or
guaranteed by, the Company or any of its subsidiaries as of the date of the
Terms Agreement shall not have been lowered since the execution of such Terms
Agreement and none of such securities rating agencies shall have publicly
announced that it has under surveillance or review, with possible negative
implications, its rating of the Underwritten Securities or any other securities
of, or guaranteed by, the Company or any of its subsidiaries, and (iii) there
shall not have come to the Representatives' attention any facts that would cause
the Representatives to believe that the Prospectus, together with the applicable
Prospectus Supplement, at the time it was required to be delivered to a
purchaser of the Underwritten Securities, contained an untrue Securities,
contained an untrue statement of a material fact or omitted to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances existing at such time, not misleading. The Prospectus Supplement
prepared by the Company pursuant to Section 3(a) hereof shall have been
transmitted to the Commission for filing pursuant to Rule 424(b) of the 1933 Act
Regulations within the prescribed time period and prior to Closing Time the
Company shall have provided evidence satisfactory to the Representatives of such
timely filing, or a post-effective amendment shall have been promptly filed and
declared effective in accordance with the requirements of Rule 430A of the 1933
Act Regulations.
(b) At the applicable Closing Time, the Representatives shall have
received:
(1) The favorable opinion, dated as of the applicable Closing Time, of
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Vice President, Secretary and General Counsel of the Company,
in form and substance satisfactory to the Representatives, to the effect that:
13
(i) The Company and each of its Significant Subsidiaries have
been organized and are corporations validly existing as corporations in
good standing under the laws of their respective jurisdictions of
incorporation.
(ii) The Company and each of its Significant Subsidiaries have
the corporate power and authority to own, lease and operate their
respective properties and to conduct their respective businesses as
described in the Registration Statement.
(iii) The Company and each of its Significant Subsidiaries are
duly qualified as foreign corporations to transact business and are in
good standing in each jurisdiction in which such qualification is
required, except where the failure to so qualify would not have a
Material Adverse Effect.
(iv) This Agreement and the Delayed Delivery Contracts, if any,
have been duly authorized, executed and delivered by the Company.
(v) The Underwritten Securities have been duly authorized for
issuance and sale by the Company pursuant to this Agreement and, when
executed and authenticated as specified in the applicable Securities
Agreement and delivered against payment of the consideration therefor
in accordance with this Agreement, any Underwritten Securities
constituting capital stock of the Company will be validly issued and
fully paid and non-assessable and any other Underwritten Securities
will be valid and binding obligations of the Company, in each case
entitled to the benefits of the applicable Securities Agreement and
enforceable in accordance with their terms, except as enforcement
thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting creditors'
rights generally or by general equitable principles (regardless of
whether enforcement is considered in a proceeding in equity or at law)
and except further as enforcement, thereof may be limited by (A)
requirements that a claim with respect to any Underwritten Securities
denominated other than in U.S. dollars (or a foreign currency or
currency unit judgment in respect of such claim) be converted into U.S.
dollars at a rate of exchange prevailing on a date determined pursuant
to applicable law or (B) governmental authority to limit, delay or
prohibit the making of payments outside the United States; and the
Warrant Securities, if any, have been duly authorized by the Company
and, when executed and authenticated as specified in the applicable
Securities Agreement and delivered against payment pursuant to such
Securities Agreement, any Warrant Securities constituting capital stock
of the Company will be validly issued and fully paid and non-assessable
and any other Warrant Securities will be valid and binding obligations
of the Company, in each case entitled to the benefits of the applicable
Securities Agreement and enforceable in accordance with their terms,
except as enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or
affecting creditors rights generally or general equitable principles
(regardless of whether enforcement is considered in a proceeding in
equity or at law) and except further as enforcement thereof is subject,
in the case
14
of Warrant Securities denominated in a foreign currency or currency
unit, to provisions of law that require that a judgment for money
damages rendered by a court in the United States be expressed only in
United States dollars.
(vi) The applicable Securities Agreement has been duly
authorized, executed and delivered by the Company and, in the case of
any Certificate of Designation, has been filed with the Secretary of
State of the State of Delaware and, in the case of any Indenture, has
been duly qualified under the 1939 Act, and, assuming due
authorization, execution and delivery by the Trustee, in the case of
the Indenture, and the Warrant Agent, in the case of any Warrant
Agreement, constitutes a valid and binding obligation of the Company,
enforceable in accordance with its terms, except as enforcement thereof
may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting creditors' rights generally
or by general equitable principles (regardless of whether enforcement
is considered in a proceeding in equity or at law) and except further
as enforcement thereof is subject, in the case of Underwritten
Securities denominated in a foreign currency or currency unit, to
provisions of law that require that a judgment for money damages
rendered by a court in the United States be expressed only in United
States dollars.
(vii) The Underwritten Securities and the applicable Securities
Agreement conform in all material respects to the descriptions thereof
contained in the Prospectus and are substantially in the respective
forms filed or incorporated by reference, as the case may be, as
exhibits to the Registration Statement.
(viii) The Registration Statement is effective under the 1933
Act, any required filing of the Prospectus, and any supplements
thereto, pursuant to Rule 424(b) has been made in the manner and within
the time period required by Rule 424(b) and, to the best of my
knowledge and information, no stop order suspending the effectiveness
of the Registration Statement has been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission.
(ix) At the time the Registration Statement became effective and
at the Representation Date, the Registration Statement and each
amendment or supplement thereto (other than the financial statements
and supporting schedules included therein and the Form T-1 of the
Trustee under the Indenture, as to which such counsel need express no
opinion), complied as to form in all material respects to the
requirements of the 1933 Act, the 1933 Act Regulations, the 1939 Act
and the 1939 Act Regulations.
(x) Each document filed pursuant to the 1934 Act (other than the
financial statements and supporting schedules included therein, as to
which such counsel need express no opinion) and incorporated or deemed
to be incorporated by reference in the Prospectus complied when so
filed as to form in all material respects with the 1934 Act and the
1934 Act Regulations.
15
(xi) There are no contracts, indentures, mortgages, loan
agreements, notes, leases or other agreements or instruments required
to be described or referred to in the Registration Statement or to be
filed as Exhibits thereto other than those described or referred to
therein or filed or incorporated by reference as exhibits thereto and
the descriptions thereof are correct, and, to the knowledge of such
counsel, no default exists in the due performance or observance of any
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other agreement or
instrument so described, referred to, filed or incorporated by
reference, except where such default would not have a Material Adverse
Effect.
(xii) No authorization, approval, consent or order of any court
or governmental authority or agency is required in connection with the
sale to the Underwriters of the Underwritten Securities, except such as
may be required under the 1933 Act or the 1933 Act Regulations or state
securities laws. The execution, delivery and performance of this
Agreement, the applicable Securities Agreement and the Securities and
the consummation of the transactions contemplated herein and therein
(A) will not conflict with or constitute a material 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 its Significant Subsidiaries pursuant to, any contract, indenture,
mortgage, loan agreement, note, lease or other agreement or instrument
to which the Company or any of its Significant Subsidiaries is a party
or by which any of them may be bound, or to which any of the property
or assets of the Company or any of its Significant Subsidiaries is
subject, except where such breach, default or lien would not have a
Material Adverse Effect, and (B) will not result in any violation of
the provisions of the charter or by-laws of the Company or any of its
Significant Subsidiaries, or any applicable law or any administrative
regulation, or any administrative or court decree of which the Company
or any of its Significant Subsidiaries has received notice.
(xiii) To the knowledge of such counsel, there are no legal or
governmental proceedings pending or threatened that are required to be
disclosed in the Registration Statement, other than those disclosed
therein, and all pending legal or governmental proceedings to which the
Company or any of its subsidiaries is a party or to which any of their
property is subject which are not described in the Registration
Statement, including ordinary routine litigation incidental to the
business, are, considered in the aggregate, not material.
(xiv) The information in the Prospectus under "Description of
Debt Securities," "Description of Debt Warrants," "Description of
Preferred Stock," "Description of Preferred Warrants" and "Description
of Currency Warrants," to the extent that it constitutes matters of
law, summaries of legal matters, documents or proceedings, or legal
conclusions, has been reviewed by such counsel and is correct in all
material respects.
16
(xv) Neither the Company nor any of its subsidiaries is, or as a
result of the transactions contemplated by the Prospectus or the
applicable Securities Agreement would be, required to make any filing
or to register under the Investment Company Act of 1940, as amended.
(2) The favorable opinion, dated as of the applicable Closing Time, of
▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇, counsel for the Underwriters, with respect to the
validity of the applicable Securities Agreement and the Underwritten
Securities, the effectiveness of the Registration Statement, the disclosure
in the Registration Statement and the Prospectus and such other 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.
(3) In giving her opinion required by clauses (i) - (xv) of subsection
(b)(1) of this Section 4, the Company's Vice President, Secretary and
General Counsel may rely, as to matters of fact, to the extent such counsel
deems proper, on certificates of responsible officers of the Company and
public officials, provided that any such certificates are delivered to the
Representatives and counsel for the Underwriters, and, as to matters
involving the application of laws of any jurisdiction other than the United
States and jurisdictions in which they are admitted, to the extent such
counsel deems proper and specifies in such opinion and to the extent such
opinion is satisfactory in form and scope to counsel for the Underwriters,
upon the opinion of other counsel qualified in such jurisdictions whom they
believe are reliable and who are satisfactory to counsel for the
Underwriters, provided that copies of any such opinions of other counsel
shall be delivered to the Representatives and counsel for the Underwriters.
In giving the opinions required by subsections (b)(1) and (b)(2) of
this Section 4, each such counsel shall state that no facts have come to such
counsel's attention that lead such counsel to believe (i) that the Registration
Statement or any amendment thereto (except for the financial statements and
supporting schedules and other financial or statistical data included or
incorporated by reference therein and the Form T-1 of the Trustee under the
Indenture, as to which such counsel need make no statement), at the time the
Registration Statement or any such amendment became effective, or at the date of
the Terms Agreement, contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading or (ii) that the Prospectus or any amendment
or supplement thereto (except for the financial statements and supporting
schedules and other financial or statistical data included or incorporated by
reference therein, as to which such counsel need make no statement), at the time
the Prospectus was issued, at the time any such amended or supplemented
Prospectus was issued or at the applicable Closing Time, included or includes an
untrue statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(c) At the applicable Closing Time, there shall not have been, since
the date of the Terms Agreement or since the respective dates as of which
information is given in the Registration Statement, any Material Adverse Change,
and the Representatives shall have received a certificate of the President or a
Vice President of the Company and of the chief
17
financial or chief accounting officer of the Company, dated as of such Closing
Time, to the effect that (i) there has been no such Material Adverse Change,
(ii) the other representations and warranties of the Company contained in
Section 1 hereof are true and correct with the same force and effect as though
such Closing Time were a Representation Date, (iii) the Company has complied in
all material respects with all agreements and satisfied all conditions on its
part to be performed or satisfied at or prior to the Closing Time and (iv) no
stop order suspending the effectiveness of the Registration Statement has been
issued and, to the knowledge of such officers, no proceedings for that purpose
have been initiated or threatened by the Commission.
(d) The Representatives shall have received from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP or
other independent public accountants acceptable to the Representative a letter,
dated as of the date of the Terms Agreement and delivered at such time, in form
and substance satisfactory to the Representatives, confirming that they are
independent public accountants with respect to the Company and its subsidiaries
within the meaning of the 1933 Act and the 1934 Act and the respective
applicable published rules and regulations thereunder and stating the
conclusions and findings of such firm with respect to the financial information
and other matters as provided in Statement on Auditing Standards No. 72 issued
by the Auditing Standards Board of the American Institute of Certified Public
Accountants.
(e) The Representatives shall have received from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP or
other independent public accountants acceptable to the Representatives a letter,
dated as of the applicable Closing Time, reconfirming or updating the letter
required by subsection (d) of this Section 4, in form and substance satisfactory
to the Representatives.
(f) At the applicable Closing Time, ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇ shall have
been furnished with such documents and opinions as they may reasonably require
for the purpose of enabling them to pass upon the issuance and sale of the
Underwritten Securities as herein contemplated and related proceedings or in
order to evidence the accuracy and completeness of any of the representations
and 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 Underwritten Securities as herein contemplated shall be reasonably
satisfactory in form and substance to the Representatives and counsel for the
Underwriters.
(g) In the event the Underwriters exercise their option, if any,
provided in a Terms Agreement as set forth in Section 2 hereof to purchase all
or any portion of the Option Securities, the representations and warranties of
the Company contained herein and the statements in any certificates furnished by
the Company hereunder shall be true and correct as of each Date of Delivery, and
the Representatives shall have received:
(1) A certificate, dated such Date of Delivery, of the President or a
Vice President and of the chief financial or chief accounting officer of
the Company, confirming that the certificate delivered at Closing Time
pursuant to Section 4(c) hereof remains true and correct as of such Date of
Delivery.
(2) The favorable opinion of ▇▇▇▇▇ & Lardner, counsel for the Company,
in form and substance satisfactory to the Representatives, dated such Date
of Delivery,
18
relating to the Option Securities and otherwise substantially to the same
effect as the opinion required by Section 4(b)(1) hereof.
(3) The favorable opinion of ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇, counsel for the
Underwriters, dated such Date of Delivery, relating to the Option
Securities and otherwise to the same effect as of the opinion required by
Section 4(b)(2) hereof.
(4) A letter from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP or other independent public
accountants acceptable to the Representatives, in form and substance
satisfactory to the Representatives and dated such Date of Delivery,
substantially the same in scope and substance as the letter furnished to
the Representatives pursuant to Section 4(e) hereof, except that the
"specified date" in the letter furnished pursuant to this section 4(g)(4)
shall be a date not more than five days prior to such Date of Delivery.
(h) At the Closing Time, if provided in the Terms Agreement and
requested by the Representatives, the Underwritten Securities and any Warrant
Securities issuable upon exercise of the Underwritten Securities shall have been
approved for listing on such national securities exchange as designated by the
Representatives, subject to official notice of issuance.
If any condition specified in this Section 4 shall not have been fulfilled
when and as required to be fulfilled, this Agreement may be terminated by the
Representatives by notice to the Company at any time at or prior to the
applicable Closing Time, and such termination shall be without liability of any
party to any other party except as provided in Section 5.
SECTION 5. PAYMENT OF EXPENSES. The Company will pay all expenses incident
to the performance of its obligations under this Agreement, including (i) the
printing and filing of the Registration Statement as originally filed and of all
amendments thereto, the preliminary prospectuses, the Prospectus, and any
amendments or supplements thereto, (ii) the duplication of this Agreement and
each Securities Agreement, (iii) the preparation, issuance and delivery of the
certificates for the Underwritten Securities to the Underwriters and of
certificates for any Warrant Securities issuable upon exercise of Debt Warrants
or Preferred Warrants, (iv) the fees and disbursements of the Company's counsel
and accountants, (v) the qualification of the Underwritten Securities and any
Warrant Securities issuable upon exercise of Debt Warrants or Preferred Warrants
under securities laws in accordance with the provisions of Section 3(i) hereof,
including filing fees and the fees and disbursements of counsel for the
Underwriters in connection therewith and in connection with the preparation of
any Blue Sky Surveys and Legal Investment Surveys, (vi) the printing and
delivery to the Underwriters in quantities as hereinabove stated of copies of
the Registration Statement as originally filed and of each amendment thereto,
and of the Prospectus and any amendments or supplements thereto, (vii) the
duplication and delivery to the Underwriters of copies of each Securities
Agreement, any Blue Sky Surveys, any Delayed Delivery Contract and any Legal
Investment Surveys, (viii) the fees, if any, of rating agencies, (ix) the fees
and expenses, if any, incurred in connection with the listing of the
Underwritten Securities or any Warrant Securities on any national securities
exchange, (x) any filing fees incident to any required review by the National
Association of Securities Dealers, Inc. of the terms of the sale of the
Securities (including the reasonable fees, disbursements and charges of counsel
for the Underwriters in connection therewith), (xi) the fees and expenses of any
Trustee and any agent of any Trustee, the fees and expenses of any Warrant
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Agent, and the fees and disbursements of counsel for any Trustee or any Warrant
Agent in connection with any Securities Agreement and the Securities, (xii) any
advertising and other out-of-pocket expenses of the Representatives incurred
with the approval of the Company, (xiii) the fees and expenses of any Depository
(as defined in any Securities Agreement) and any nominees thereof in connection
with the Underwritten Securities, (xiv) the out-of-pocket cost of providing any
CUSIP or other identification numbers for the Underwritten Securities, and (xv)
all other costs and expenses incident to the performance of its obligations
hereunder which are not otherwise specifically provided for in this Section 5.
If this Agreement is terminated by the Representatives in accordance with
the provisions of Section 4 or Section 8(a) hereof, or if the sale of the
Underwritten Securities is not consummated because of any refusal, inability or
failure on the part of the Company to perform any agreement herein or comply
with any provision hereof other than by reason of a default of any of the
Underwriters, the Company shall reimburse the Underwriters named in such Terms
Agreement for all of their out-of-pocket expenses incurred through the date of
such termination, including the reasonable fees and disbursements of counsel for
the Underwriters.
SECTION 6. INDEMNIFICATION AND CONTRIBUTION.
--------------------------------
(a) The Company agrees to indemnify and hold harmless each Underwriter,
the directors, officers, employees and agents of each Underwriter and each
person who controls any Underwriter within the meaning of either the Act or the
Exchange Act against any and all losses, claims, damages or liabilities, joint
or several, to which they or any of them may become subject under the 1933 Act,
the 1934 Act or other Federal or state statutory law or regulation, at common
law or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement for the registration of the Underwritten Securities as originally
filed or in any amendment thereof, or in any Preliminary Prospectus or the
Prospectus, or in any amendment thereof or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and agrees to reimburse each such indemnified party, as
incurred, for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will not be liable in
any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
any Underwriter through the Representatives specifically for inclusion therein.
This indemnity agreement will be in addition to any liability which the Company
may otherwise have.
(b) Each Underwriter severally and not jointly agrees to indemnify and
hold harmless the Company, each of its directors, each of its officers who signs
the Registration Statement, and each person who controls the Company within the
meaning of either the 1933 Act or the 1934 Act, to the same extent as the
foregoing indemnity from the Company to each Underwriter, but only with
reference to written information relating to such Underwriter furnished to the
Company by or on behalf of such Underwriter through the Representatives
specifically for inclusion in the documents referred to in the foregoing
indemnity. This
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indemnity agreement will be in addition to any liability which any Underwriter
may otherwise have. The Company acknowledges that, under the heading
"Underwriting" or "Plan of Distribution" in any Preliminary Prospectus and the
Prospectus, (i) the list of Underwriters and their respective participation in
the sale of the Underwritten Securities, (ii) the sentences related to
concessions and reallowances and (iii) the paragraphs related to stabilization,
syndicate covering transactions and penalty bids constitute the only information
furnished in writing by or on behalf of the several Underwriters for inclusion
in any Preliminary Prospectus or the Prospectus.
(c) Promptly after receipt by an indemnified party under this Section 6
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 6, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in which
case the indemnifying party shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the indemnified party or parties
except as set forth below); provided, however, that such counsel shall be
satisfactory to the indemnified party. Notwithstanding the indemnifying party's
election to appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel (including
local counsel), and the indemnifying party shall bear the reasonable fees, costs
and expenses of such separate counsel if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such counsel
with a conflict of interest, (ii) the actual or potential defendants in, or
targets of, any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, (iii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of the institution of such action or (iv) the
indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. An indemnifying party will
not, without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b) of
this Section 6 is unavailable to or insufficient to hold harmless an indemnified
party for any reason, the Company and the Underwriters severally agree to
contribute to the aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with
21
investigating or defending same) (collectively "Losses") to which the Company
and one or more of the Underwriters may be subject in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and by the Underwriters on the other from the offering of the Securities;
provided, however, that in no case shall any Underwriter (except as may be
provided in any agreement among underwriters relating to the offering of the
Underwritten Securities) be responsible for any amount in excess of the
underwriting discount or commission applicable to the Underwritten Securities
purchased by such Underwriter hereunder. If the allocation provided by the
immediately preceding sentence is unavailable for any reason, the Company and
the Underwriters severally shall contribute in such proportion as is appropriate
to reflect not only such relative benefits but also the relative fault of the
Company on the one hand and of the Underwriters on the other in connection with
the statements or omissions which resulted in such Losses as well as any other
relevant equitable considerations. Benefits received by the Company shall be
deemed to be equal to the total net proceeds from the offering (before deducting
expenses) received by it, and benefits received by the Underwriters shall be
deemed to be equal to the total underwriting discounts and commissions, in each
case as set forth on the cover page of the Prospectus. Relative fault shall be
determined by reference to, among other things, whether any untrue or any
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information provided by the Company on the
one hand or the Underwriters on the other, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. The Company and the Underwriters agree that
it would not be just and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this paragraph (d), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. For purposes
of this Section 6, each person who controls an Underwriter within the meaning of
either the 1933 Act or the 1934 Act and each director, officer, employee and
agent of an Underwriter shall have the same rights to contribution as such
Underwriter, and each person who controls the Company within the meaning of
either the 1933 Act or the 1934 Act, each officer of the Company who shall have
signed the Registration Statement and each director of the Company shall have
the same rights to contribution as the Company, subject in each case to the
applicable terms and conditions of this paragraph (d).
SECTION 7. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY.
All representations, warranties and agreements contained in this Agreement, or
contained in certificates of officers of the Company submitted pursuant hereto,
shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or controlling person, or
by or on behalf of the Company, and shall survive delivery of any Underwritten
Securities to the Underwriters.
SECTION 8. TERMINATION. (a) The Representatives may terminate this
Agreement, upon notice to the Company, at any time prior to the applicable
Closing Time (i) if there has been, since the date of the Terms Agreement or
since the respective dates as of which information is given in the Registration
Statement, any Material Adverse Change, or (ii) if there has occurred any
material adverse change in the financial markets in the United States or
elsewhere or any outbreak of hostilities or escalation thereof or other calamity
or crisis the effect of which is such as to make it, in the judgment of the
Representatives, impracticable to market
22
the Underwritten Securities or enforce contracts for the sale of the
Underwritten Securities, or (iii) if the rating assigned by any nationally
recognized securities rating agency to any securities of, or guaranteed by, the
Company or any of its subsidiaries shall have been lowered or if any such rating
agency shall have publicly announced or given notice to the Company that it has
under surveillance or review, with possible negative implications, its rating of
any securities of, or guaranteed by, the Company or any of its subsidiaries, or
(iv) if trading in the Common Stock has been suspended by the Commission or a
national securities exchange or if trading on either the American Stock Exchange
or the New York Stock Exchange has been suspended, or minimum or maximum prices
for trading have been fixed, or maximum ranges for prices for securities have
been required, by either of said exchanges or by order of the Commission or any
other governmental authority, or if a banking moratorium has been declared by
either Federal or New York authorities.
(b) In the event of any such termination, (i) the covenants set forth
in Section 3 hereof with respect to any offering of Underwritten Securities
shall remain in effect so long as any Underwriter retains beneficial ownership
of any such Underwritten Securities purchased from the Company pursuant to the
applicable Terms Agreement and (ii) the covenant set forth in Section 3(c)
hereof, the provisions of Section 5 hereof, the indemnity and contribution
provisions set forth in Section 6 hereof, and the provisions of Sections 7 and
12 hereof shall remain in effect.
SECTION 9. DEFAULT BY ONE OR MORE OF THE UNDERWRITERS. If one or more of
the Underwriters participating in an offering of Securities shall fail at the
applicable Closing Time to purchase the Underwritten Securities which it or they
are obligated to purchase under the applicable Terms Agreement (the "Defaulted
Securities"), then the Representatives shall have the right, within 24 hours
thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if however, the Representatives shall not have completed
such arrangements within such 24-hour period, then:
(a) if the aggregate amount of Defaulted Securities does not exceed 10%
of the aggregate amount of the Underwritten Securities to be purchased pursuant
to the Terms Agreement, the non-defaulting Underwriters named in such Terms
Agreement shall be obligated to purchase the full amount thereof in the
proportions that their respective underwriting obligations thereunder bear to
the underwriting obligations of all such non-defaulting Underwriters, or
(b) if the aggregate amount of Defaulted Securities exceeds 10% of the
aggregate amount of the Underwritten Securities to be purchased pursuant to such
Terms Agreement, the non-defaulting Underwriters shall have the right to
purchase all, but shall not be under any obligation to purchase any, of the
Underwritten Securities, and if such non-defaulting Underwriters do not purchase
all of the Underwritten Securities, the Terms Agreement shall terminate without
any liability on the part of any non-defaulting Underwriters.
No action taken pursuant to this Section 9 shall relieve any defaulting
Underwriter from liability in respect of its default.
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In the event of a default by any Underwriter or Underwriters as set forth
in this Section 9, either the Representatives or the Company shall have the
right to postpone the applicable Closing Time for a period not exceeding seven
days in order to effect any required changes in the Registration Statement or
Prospectus or in any other documents or arrangements.
SECTION 10. NOTICES. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to Banc One Capital Markets, Inc., ▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: General Counsel and to ▇▇▇▇▇▇▇ ▇▇▇▇▇
Barney Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: General
Counsel (facsimile no.: (▇▇▇) ▇▇▇-▇▇▇▇), with a copy to ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. Best
(facsimile no. (▇▇▇) ▇▇▇-▇▇▇▇; notices to the Company shall be directed to it at
2801-80th Street, Kenosha, Wisconsin 53141-1410, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Vice President, Secretary and General Counsel (facsimile no.: ▇▇▇-▇▇▇-▇▇▇▇, with
a copy to ▇▇▇▇▇ & Lardner, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. Quick.
SECTION 11. PARTIES. This Agreement shall inure to the benefit of and be
binding upon the Company and any Underwriter who becomes a party hereto, and
their respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the Company, such Underwriters and their respective successors and the
controlling persons, officers, directors, agents and employees referred to in
Section 6 hereof and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. This Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the Company,
such Underwriters and their respective successors and said controlling persons,
officers, directors, agents and employees and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation. No
purchaser of Underwritten Securities from any Underwriter shall be deemed to be
a successor by reason merely of such purchase.
SECTION 12. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed in said State.
SECTION 13. COUNTERPARTS. The Terms Agreement may be executed in one or
more counterparts, and if executed in more than one counterpart, the executed
counterparts shall constitute a single instrument.
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