Exhibit 1.1
UNDERWRITING AGREEMENT
October 17, 2001
The Xxxx Disney Company
000 Xxxxx Xxxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Dear Sirs:
We (the "Representatives") are acting on behalf of the underwriters
(including ourselves) named below (such underwriters being herein called the
"Underwriters"), and we understand that The Xxxx Disney Company, a Delaware
corporation (the "Company"), proposes to issue and sell U.S. $275,000,000
aggregate principal amount of its 7% Quarterly Interest Bonds Due 2031 (QUIBS*)
(the "Initial Debt Securities").
Subject to the terms and conditions set forth or incorporated by
reference herein, the Company hereby agrees to sell and the Underwriters agree
to purchase, severally and not jointly, the principal amount of Initial Debt
Securities set forth below opposite their names at a purchase price of 7% of the
principal amount thereof plus accrued interest, if any, from October 24, 2001:
Principal Amount of
Name Initial Debt Securities
---------------------------------------------------------------- -----------------------
Xxxxxx Xxxxxxx & Co. Incorporated.................................................. $39,375,000
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated....................................................... 39,375,000
Xxxxxxx Xxxxx Barney Inc........................................................... 39,375,000
X.X. Xxxxxxx & Sons, Inc........................................................... 39,375,000
Prudential Securities Incorporated................................................. 39,375,000
UBS Warburg LLC.................................................................... 39,375,000
Bear, Xxxxxxx & Co. Inc............................................................ 1,250,000
CIBC World Markets Corp............................................................ 1,250,000
Xxxx Xxxxxxxx Xxxxxxx.............................................................. 1,250,000
Deutsche Banc Alex. Xxxxx Inc...................................................... 1,250,000
First Union Securities, Inc........................................................ 1,250,000
Fleet Securities, Inc.............................................................. 1,250,000
Xxxxxxx, Sachs & Co................................................................ 1,250,000
--------
* QUIBS is a servicemark of Xxxxxx Xxxxxxx Xxxx Xxxxxx & Co.
Principal Amount of
Name Initial Debt Securities
---------------------------------------------------------------- -----------------------
H&R Block Financial Advisors, Inc.................................................. 1,250,000
HSBC Securities (USA) Inc.......................................................... 1,250,000
X.X. Xxxxxx Securities, Inc........................................................ 1,250,000
Xxxx Xxxxx Xxxx Xxxxxx, Inc........................................................ 1,250,000
Xxxxxxx Xxxxxx & Co., Inc.......................................................... 1,250,000
TD Waterhouse Investor Services, Inc............................................... 1,250,000
Xxxxxx Xxxxxxx Incorporated........................................................ 1,250,000
U.S. Bancorp Xxxxx Xxxxxxx Inc..................................................... 1,250,000
Wachovia Securities, Inc........................................................... 1,250,000
Xxxxx Fargo Xxx Xxxxxx, LLC........................................................ 1,250,000
Advest Inc......................................................................... 625,000
Banc of America Securities LLC..................................................... 625,000
Banc One Capital Markets, Inc...................................................... 625,000
BB&T Capital Markets, a Division of Xxxxx & Xxxxxxxxxxxx........................... 625,000
Xxxxxxxx & Partners, L.P........................................................... 625,000
BNY Capital Markets, Inc........................................................... 625,000
Xxxxxxxxx & Company LLC............................................................ 625,000
X.X. Xxxxxxxx & Co................................................................. 625,000
Xxxxxxxxxx & Co. Inc............................................................... 625,000
Fifth Third Securities, Inc........................................................ 625,000
Gibraltar Securities Co............................................................ 625,000
Gruntal & Co., L.L.C............................................................... 625,000
Xxxxxx Xxxxxxxxxx Xxxxx LLC........................................................ 625,000
X.X. Xxxx & Associates, Inc........................................................ 625,000
Loop Capital Markets............................................................... 625,000
McDonald Investments Inc., a KeyCorp Company....................................... 625,000
XxXxxx, Xxxxx & Co., Inc........................................................... 625,000
Mesirow Financial, Inc............................................................. 625,000
Xxxxxx/Xxxxxx Incorporated......................................................... 625,000
Pershing/a Division of Xxxxxxxxx, Xxxxxx & Xxxxxxxx................................ 625,000
Xxxxxx X. Xxxxx & Co. Incorporated................................................. 625,000
Xxxxxxx Xxxxx & Associates, Inc.................................................... 625,000
Xxxxxx Xxxxxxx & Co., Inc.......................................................... 625,000
Southwest Securities, Inc.......................................................... 625,000
SunTrust Xxxxxxxxx Xxxxxxxx Capital Markets, A Division of
SunTrust Capital Markets Inc.............................................. 625,000
Xxxxxx, Xxxxxxxx & Company Incorporated............................................ 625,000
Xxxxxxx Xxxxx & Co................................................................. 625,000
The Xxxxxxxx Capital Group, L.P.................................................... 625,000
-----------------------
$275,000,000.00
=======================
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The Underwriters will pay for the Initial Debt Securities upon delivery
thereof to The Depository Trust Company or its designated custodian at 10:00
a.m. (
New York time) on October 24, 2001 or at such other time, not later than
10:00 a.m. (
New York time) on October 31, 2001 as shall be designated by the
Representatives. The time and date of such payment and delivery are hereinafter
referred to as the "Closing Date."
In addition, subject to the terms and conditions set forth or
incorporated by reference herein, the Company hereby grants an option to the
Underwriters, severally and not jointly, to purchase up to an additional
$41,250,000 principal amount of its 7% Quarterly Interest Bonds Due 2031 (the
"Option Debt Securities" and together with the Initial Debt Securities, the
"Debt Securities") at the price set forth above. The option hereby granted will
expire 30 days after the date of this Agreement and may be exercised only for
the purpose of covering over-allotments which may be made in connection with the
offering and distribution of the Initial Debt Securities upon notice by the
Representatives to the Company setting forth the principal amount of Option Debt
Securities as to which the Underwrites are exercising the option and the time,
date and place of payment and delivery of such Option Debt Securities. Such time
and date of delivery (the "Date of Delivery") shall be determined by the
Representatives but shall not be earlier than three nor later than seven full
business days after the exercise of said option, nor in any event prior to the
Closing Date. If the option is exercised as to all or any portion of the Option
Debt Securities, the Option Debt Securities shall be purchased by the
Underwriters, severally and not jointly, in proportion to their respective
Initial Debt Securities underwriting obligations as set forth above.
The Underwriters will pay for the Option Debt Securities upon delivery
thereof to The Depositary Trust Company or its designated custodian at 10:00
a.m. (
New York Time) on the Date of Delivery.
The Debt Securities shall have the terms set forth in the Prospectus
dated August 23, 2001, as supplemented by the Prospectus Supplement dated
October 17, 2001, including the following:
TERMS OF DEBT SECURITIES:
Title: 7% Quarterly Interest Bonds Due 2031 (QUIBS)
Aggregate Principal Amount: $275,000,000
Initial Offering Price: 100.00%
Purchase Price: 96.85%
Currency of Payment: United States Dollars
Ratings of debt securities included in A- (negative outlook)-- Standard & Poor's Ratings Services
the Registration Statement: A3 (stable outlook)-- Xxxxx'x Investors Service
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Maturity Date: November 1, 2031
Interest Rate: 7%
Redemption Provisions: As set forth in the Prospectus Supplement
Interest Payment Dates: February 1, May 1, August 1 and November 1,
commencing February 1, 2002 (interest accrues from
October 24, 2001)
Regular Record Dates: The fifteenth day (whether or not a Business Day) immediately
preceding the related Interest Payment Date
Form and Denominations: Global bond registered in the name of Cede & Co., as
the nominee of The Depository Trust Company ("DTC").
Beneficial interests in such global bond will be in
denominations of U.S. $25 and integral multiples
thereof.
Ranking: The Debt Securities will constitute a separate series of
senior unsecured debt obligations of the Company issued under
the Indenture, dated as of September 24, 2001 (the
"Indenture"), by and between the Company, as issuer, and Xxxxx
Fargo Bank, N.A., as trustee (the "Trustee") and will rank
PARI PASSU with all other senior unsecured indebtedness of the
Company from time to time outstanding.
Listing:
New York Stock Exchange
OTHER GENERAL PROVISIONS
CONDITIONS TO CLOSING.
Section 5(e) of The Xxxx Disney Company
Underwriting Agreement Standard
Provisions (Debt Securities) dated October 17, 2001 (the "Standard Provisions")
is amended to read as follows:
"(e) COMFORT LETTERS. On the Closing Date, the Underwriters shall have
received letters from the Company's independent certified public
accountants, dated as of the Closing Date and in form and substance
reasonably satisfactory to the Underwriters."
Section 5(f) of the Standard Provisions shall not be applicable.
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A new Section 5(i) of the Standard Provisions is added as follows:
"(i) OPTION DEBT SECURITIES. The several obligations of the
Underwriters to purchase Option Debt Securities are subject to delivery
to the Underwriters on the Date of Delivery such documents, opinions
and comfort letters as the Representatives may reasonably request with
respect to the good standing of the Company, the due authorization and
issuance of the Option Debt Securities and other matters related to the
issuance of the Option Debt Securities."
COVENANTS OF THE COMPANY.
Section 6 of the Standard Provisions is amended by adding the following
new paragraph (h):
"(h) RESTRICTION ON SALE OF SECURITIES. Between the date of the
Underwriting Agreement and the Closing Date, the Company will not,
without the prior written consent of the Representatives, directly or
indirectly, issue, sell, offer to sell, grant any option for the sale
of, or otherwise dispose of, any of its debt securities, other than
issuances of the Company's commercial paper and debt securities
denominated in currencies other than United States dollars."
DEFAULTING UNDERWRITERS.
Section 12 of the Standard Provisions is amended to read as follows:
"12. DEFAULTING UNDERWRITERS. If on the Closing Date or the Date of
Delivery, as the case may be, any one or more of the Underwriters shall
fail or refuse to purchase Debt Securities that it has or they have
agreed to purchase on such date, and the aggregate amount of Debt
Securities which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase is not more than one-tenth of the
aggregate amount of the Debt Securities to be purchased on such date,
the other Underwriters shall be obligated severally in the proportions
that the amount of Initial Debt Securities set forth opposite their
respective names above bears to the aggregate amount of Initial Debt
Securities set forth opposite the names of all such non-defaulting
Underwriters, or in such other proportions as the Representatives may
specify, to purchase the Debt Securities which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase on
such date. If on the Closing Date any Underwriter or Underwriters shall
fail or refuse to purchase Initial Debt Securities and the aggregate
amount of Initial Debt Securities with respect to which such default
occurs is more than one-tenth of the aggregate amount of Initial Debt
Securities to be purchased on such date, and arrangements satisfactory
to the Representatives and the Company for the purchase of such Initial
Debt Securities 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
Representatives or the Company shall have the right to postpone the
Closing Date but in no event for longer then seven days, in order that
the required changes, if
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any, in the Registration Statement and in the Prospectus or in any
other documents or arrangements may be effected. If on the Date of
Delivery any Underwriter or Underwriters shall fail or refuse to
purchase Option Debt Securities and the aggregate amount of Option Debt
Securities with respect to which such default occurs is more than
one-tenth of the aggregate amount of Option Debt Securities to be
purchased on such date, the non-defaulting Underwriters shall have the
option to (i) terminate their obligation hereunder to purchase Option
Debt Securities or (ii) purchase not less than the amount of Option
Debt Securities that such non-defaulting Underwriters would have been
obligated to purchase in the absence of such default. 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."
Notices: Notices to the Underwriters shall be directed to the
Representatives c/o Morgan Xxxxxxx & Co. Incorporated, 0000 Xxxxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, attention of Xxxxxx X. Xxxxxxxxxx; and notices to the Company
shall be directed to it at 000 Xxxxx Xxxxx Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx
00000, attention of Vice President and Assistant Treasurer, with copies to the
attention of the Company's Legal Department and to Xxxxx Xxxxxxxxxx LLP at 0000
Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, attention of Xxxxxx X. Xxxxxx,
Esq.
Except as otherwise noted above, all provisions contained in the
Standard Provisions, a copy of which is attached hereto, are hereby incorporated
by reference in their entirety and shall be deemed to be a part of this
Agreement to the same extent as if such provisions had been set forth in full
herein, except that if any term defined in such document is otherwise defined
herein, the definition set forth herein shall control.
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Please confirm your agreement by having an authorized officer sign a
copy of this Agreement in the space set forth below.
Very truly yours,
XXXXXX XXXXXXX & CO INCORPORATED
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX,
INCORPORATED
XXXXXXX XXXXX BARNEY INC.
acting severally on behalf of themselves
and the Underwriters named herein
By: Xxxxxx Xxxxxxx & Co. Incorporated
/s/ XXXXXX X. XXXXXXXXXX III
--------------------------------------------
Name: Xxxxxx X. Xxxxxxxxxx III
Title: Executive Director
Accepted:
THE XXXX DISNEY COMPANY
By: /s/ XXXXXXXXX X. XXXXXXXX
--------------------------------
Name: Xxxxxxxxx X. XxXxxxxx
Title: Senior Vice President and
Treasurer
Dated: October 17, 2001
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THE XXXX DISNEY COMPANY
UNDERWRITING AGREEMENT
STANDARD PROVISIONS
(DEBT SECURITIES)
October 17, 2001
From time to time, The Xxxx Disney Company, a Delaware corporation (the
"Company"), may enter into one or more
underwriting agreements that provide for
the sale of designated securities to the several underwriters named therein. The
standard provisions set forth herein may be incorporated by reference in any
such
underwriting agreement (an "
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") a registration statement including a prospectus, which, among
other things, relates to the Debt Securities 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 Debt Securities pursuant to Rule 424 under the
Securities Act of 1933, as amended (the "1933 Act"), and/or a term sheet or an
abbreviated term sheet (each, a "Term Sheet"), pursuant to Rule 434 of the rules
and regulations of the Commission under the 1933 Act (the "1933 Act
Regulations"), specifically relating to the Debt Securities. The term
Registration Statement means the registration statement as amended to the date
of this Agreement and shall include any related Registration Statement filed
pursuant to Rule 462(b) of the 1933 Act Regulations. The term Basic Prospectus
means the prospectus included in the Registration Statement at the time the
Registration Statement was declared effective by the Commission. The term
Prospectus means the Basic Prospectus together with the final Prospectus
Supplement relating to the offering of the Debt Securities, each in the form
furnished to the Underwriters by the Company for use in connection with the
offering of the Debt Securities, as from time to time amended or supplemented in
accordance with the 1933 Act, except that if any revised prospectus or
prospectus supplement shall be provided to the Underwriters by the Company for
use in connection with the offering of the Debt Securities which differs from
the prospectus or prospectus supplement on file at the Commission (whether or
not such revised prospectus or prospectus supplement is required to be filed by
the Company pursuant to Rule 424 under the 1933 Act Regulations), the term
"Prospectus" shall refer to the prospectus and prospectus supplement, as so
revised, from and after the time it is first provided to the Underwriters for
such use; provided, however, that if the Company elects to rely upon Rule 434 of
the 1933 Act Regulations, then all references to the Prospectus shall be deemed
to refer to the final or preliminary prospectus and the Term Sheet relating to
the Debt Securities in the form furnished to the Underwriters by the Company in
reliance upon Rule 434 of the 1933 Act Regulations (in which case, all
references in this Agreement to the date of the Prospectus
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shall mean the date of such Term Sheet). The term preliminary prospectus means a
preliminary prospectus supplement specifically relating to the Debt Securities
together with the Basic Prospectus. Any reference herein to the Registration
Statement or the Prospectus shall be deemed to refer to and include the
documents, financial statements and schedules incorporated by reference therein
or deemed to be incorporated by reference therein pursuant to Item 12 of Form
S-3 under the 1933 Act, and any reference to any amendment or supplement to the
Registration Statement or the Prospectus shall be deemed to refer to and include
any documents, financial statements and schedules filed by the Company with the
Commission under the Securities Exchange Act of 1934, as amended (the "1934
Act") after the date hereof, and so incorporated by reference or deemed to be
incorporated therein (such incorporated documents, financial statements and
schedules being herein called the "Incorporated Documents"). Notwithstanding the
foregoing, for purposes of this Agreement any prospectus, prospectus supplement,
term sheet or abbreviated term sheet prepared or filed with respect to an
offering pursuant to the Registration Statement of a series of securities other
than the Debt Securities shall not be deemed to have supplemented the
Prospectus.
1. REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to each of the Underwriters that:
(a) The Company meets the requirements for use of Form S-3 under
the 1933 Act. The Registration Statement has become effective under the
1933 Act and no stop order suspending the effectiveness of the
Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or, to
the knowledge of the Company, are contemplated by the Commission, and
any request on the part of the Commission for additional information
has been complied with. In addition, on or prior to the Closing Date,
the Indenture shall have been duly qualified under the Trust Indenture
Act of 1939, as amended (the "1939 Act").
(b) The Registration Statement, at the time it became effective,
complied in all material respects with the provisions of the 1933 Act
and the 1933 Act Regulations and 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. At
the date of the
Underwriting Agreement and at the Closing Date, the
Prospectus and any amendments and supplements thereto did not include
an untrue statement of a material fact or omit 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. If the
Company elects to rely upon Rule 434 of the 1933 Act Regulations, the
Company will comply with the requirements of Rule 434. Notwithstanding
the foregoing, this representation and warranty does not apply to
statements or omissions in the Registration Statement, the Prospectus
or any preliminary prospectus, or any amendment or supplement thereto,
made in reliance upon information furnished to the Company in writing
by or on behalf of the Underwriters expressly for use therein or to
those parts of the Registration Statement which constitute the
Trustee's Statement of Eligibility and Qualification on Form T-1 under
the 1939 Act (the "Form T-1"). There is no contract or document of a
character required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement
which is not described or filed as required.
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(c) The Incorporated Documents, when they became effective or were
filed (or, if an amendment with respect to any such Incorporated
Document was filed or became effective, when such amendment was filed
or became effective) with the Commission, as the case may be, complied
in all material respects with the requirements of the 1934 Act, and any
Incorporated Documents filed subsequent to the date of the Underwriting
Agreement and prior to the termination of the offering of the Debt
Securities, will, when they are filed with the Commission, comply in
all material respects with the requirements of the 1934 Act; no such
Incorporated Document, when it became effective or was filed (or, if an
amendment with respect to any such Incorporated Document was filed or
became effective, when such amendment was filed or became effective)
with the Commission, contained, and no Incorporated Document filed
subsequent to the date of the Underwriting Agreement and prior to the
Closing Date will contain, an untrue statement of a material fact or
omitted, or will omit, to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(d) This Agreement, the Indenture and the Debt Securities have
been duly authorized by the Company and conform in all material
respects to the descriptions thereof in the Prospectus.
(e) The Indenture (assuming due execution and delivery thereof by
the Trustee) is, and the Debt Securities (when executed by the Company
and authenticated in accordance with the Indenture and delivered to and
paid for by the Underwriters) will be, the legal, valid and binding
obligations of the Company, enforceable against the Company in
accordance with their respective terms, except as such enforceability
may be limited by (A) bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
or affecting the enforcement of creditors' rights generally, (B)
general principles of equity (regardless of whether such enforcement is
considered in a proceeding in equity or at law), (C) requirements that
a claim with respect to any Debt Securities denominated other than in
United States dollars (or a judgment denominated other than in United
States dollars in respect of such claim) be converted into United
States dollars at a rate of exchange prevailing on a date determined
pursuant to applicable law and (D) governmental authority to limit,
delay or prohibit the making of payments outside the United States or
in a foreign currency or composite currency. The Debt Securities (when
executed by the Company and authenticated in accordance with the terms
of the Indenture and delivered to and paid for by the Underwriters)
will be entitled to the benefits of the Indenture (subject to the
exceptions set forth in the preceding sentence).
(f) The Company is a validly existing corporation in good standing
under the laws of Delaware. The Company has full corporate power and
authority to own, lease and operate its properties and to conduct its
business as presently conducted and 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
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on the consolidated financial condition or earnings of the Company and
its subsidiaries considered as one enterprise.
(g) Except as contemplated in the Prospectus or reflected therein
by the filing of any amendment or supplement thereto or any
Incorporated Document, since the date of the most recent consolidated
financial statements included or incorporated by reference in the
Registration Statement and the Prospectus there has not been any
material adverse change in the consolidated financial condition or
earnings of the Company and its subsidiaries, considered as one
enterprise.
(h) The Company is not in violation of its Restated Certificate of
Incorporation or Bylaws, as amended. The execution and delivery of this
Agreement by the Company, the issuance and sale of the Debt Securities
and the performance by the Company of its obligations under this
Agreement and the Indenture will not conflict with or constitute a
breach of or a default (with the passage of time or otherwise) under
(A) the Restated Certificate of Incorporation or Bylaws, as amended, of
the Company, (B) subject to the Company's compliance with any
applicable covenants pertaining to its incurrence of unsecured
indebtedness contained therein, any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Company is a
party or by which it may be bound, or to which any of the properties or
assets of the Company is subject, which breach or default would, singly
or in the aggregate, have a material adverse effect on the consolidated
financial condition or earnings of the Company and its subsidiaries,
considered as one enterprise, or (C) any applicable law, administrative
regulation or administrative or court decree. Except for orders,
permits and similar authorizations required under or by the securities
or Blue Sky laws of certain jurisdictions, any securities exchange on
which any of the Debt Securities might be listed or with respect to
Debt Securities which are to be indexed or linked to any foreign
currency, composite currency, commodity, equity index or similar index,
no consent, approval, authorization or other order of any regulatory
body, administrative agency or other governmental body is legally
required for the valid issuance and sale of the Debt Securities.
(i) To the best of the Company's knowledge, the accountants who
have audited and reported upon the financial statements filed with the
Commission as part of the Registration Statement and the Prospectus are
independent accountants as required by the 1933 Act. The historical
financial statements included in the Registration Statement or
Prospectus or incorporated therein by reference fairly present the
consolidated financial position and results of operations of the
Company and its subsidiaries at the respective dates and for the
respective periods to which they apply. Such financial statements have
been prepared in accordance with generally accepted accounting
principles consistently applied, except as set forth in the
Registration Statement and Prospectus. The selected financial data and
the summary historical financial information of Disney, if any,
included in the Prospectus present fairly the information shown therein
and have been compiled on a basis consistent with that of the audited
financial statements of Disney incorporated by reference in the
Registration Statement and the Prospectus. The unaudited pro forma
financial statements, if any, together with the related notes and any
supporting schedules included or incorporated by reference in the
Registration Statement and the Prospectus, present fairly the
information shown therein and have been compiled
4
on a basis substantially consistent with the audited financial
statements of Disney included or incorporated by reference in the
Registration Statement and the Prospectus; the assumptions on which
such unaudited pro forma financial statements have been prepared are
reasonable; and such unaudited pro forma financial statements have been
prepared, and the pro forma adjustments set forth therein have been
applied, in accordance with the applicable accounting requirements of
the 1933 Act and the 1933 Act Regulations (including, without
limitation, Regulations S-X promulgated by the Commission), and such
pro forma adjustments have been properly applied to the historical
amounts in the compilation of such statements.
(j) Each of Disney Enterprises, Inc., ABC, Inc. and Xxxx Disney
World Co. (collectively, the "Significant Subsidiaries"), is a validly
existing corporation in good standing under the laws of its state of
incorporation. Each of the Significant Subsidiaries has full corporate
power and authority to own, lease and operate its properties and to
conduct its business as presently conducted and as described in the
Prospectus; and each of the Significant Subsidiaries is duly qualified
as a foreign corporation to transact business and is in good standing
in each United States jurisdiction in which such qualification is
required whether by reason of the ownership or leasing of property or
the conduct of business, except where a failure to so qualify would not
have a material adverse effect on the consolidated financial condition
or earnings of the Company and its subsidiaries, considered as one
enterprise.
Any certificate signed by any officer of the Company and delivered to
any Underwriter or to counsel for the Underwriters in connection with the
offering of the Debt Securities shall be deemed a representation and warranty by
the Company to such Underwriter as to the matters covered thereby on the date of
such certificate.
2. PUBLIC OFFERING. The Company is advised by the Representatives
that the Underwriters propose to make a public offering of their respective
portions of the Debt Securities as soon after this Agreement has been entered
into as in the Representatives' judgment is advisable. The terms of the public
offering of the Debt Securities have been provided by the Representatives to the
Company and are in all material respects completely set forth in the Prospectus.
3. PURCHASE AND DELIVERY. Except as otherwise provided in this
Section 3, payment for the Debt Securities shall be made by wire transfer, of
immediately available funds, by the Underwriters to the order of the Company, at
the time set forth in the Underwriting Agreement, upon delivery to the
Representatives for the respective accounts of the several Underwriters of the
Debt Securities, registered in such names and in such denominations as the
Representatives shall request in writing not less than two full business days
prior to the date of delivery, with any transfer taxes payable in connection
with the sale of the Debt Securities to the Underwriters duly paid. The bonds
may be represented by one or more global bonds which may be deposited with a
custodian for, and registered in the name of, The Depository Trust Company or
its nominee.
4. PAYMENT OF EXPENSES. The Company will pay all expenses
incident to the performance of its obligations under this Agreement, including
(i) the preparation, printing and filing of the Registration Statement
(including financial statements and exhibits) as originally
5
filed and of each amendment thereto, (ii) the printing and delivery to the
Underwriters of this Agreement, any Underwriting Agreement, any Agreement among
Underwriters, the Indenture and such other documents as may be required in
connection with the offering, purchase, sale and delivery of the Debt
Securities, (iii) the preparation, issuance and delivery of the Debt Securities
and any certificates for the Debt Securities to the Underwriters, (iv) the fees
and disbursements of the Company's counsel, accountants and other advisors or
agents (including transfer agents and registrars), as well as the fees and
disbursements of the Trustee and its counsel, (v) the qualification of the Debt
Securities under state securities laws or the applicable laws of any foreign
jurisdiction in which the Debt Securities are offered in accordance with the
provisions of Section 6(g) hereof, including filing fees and the reasonable fees
and disbursements of counsel for the Underwriters in connection therewith and in
connection with the preparation, printing and delivery of the Blue Sky Survey
and any Legal Investment Survey, and any amendment thereto, (vi) the printing
and delivery to the Underwriters of copies of each preliminary prospectus, any
Term Sheet, and the Prospectus and any amendments or supplements thereto, (vii)
the fees charged by nationally recognized statistical rating organizations for
the rating of the Debt Securities, and (viii) the fees and expenses incurred
with respect to the listing of the Debt Securities on any securities exchange.
5. CONDITIONS TO CLOSING. The several obligations of the
Underwriters hereunder are subject to the following conditions:
(a) OPINION OF COUNSEL TO COMPANY. On the Closing Date, the
Underwriters shall have received an opinion from Xxxxx Xxxxxxxxxx LLP,
counsel to the Company, dated as of the Closing Date and in form and
substance satisfactory to counsel for the Underwriters to the effect
that:
(i) The Company is a corporation validly existing and in
good standing under the laws of the state of Delaware.
(ii) The Company has the corporate power and corporate
authority to enter into and perform its obligations under this
Agreement and the Indenture, to borrow money as contemplated
in this Agreement and the Indenture and to issue, sell and
deliver the Debt Securities.
(iii) This Agreement has been duly authorized, executed and
delivered by the Company.
(iv) The Indenture has been duly authorized by all
necessary corporate action on the part of the Company and duly
executed and delivered by the Company and constitutes a valid
and binding agreement of the Company enforceable against the
Company in accordance with its terms, subject to the
qualification that the enforceability of the Indenture is
subject to and may be limited by (a) applicable bankruptcy,
insolvency, reorganization, fraudulent transfer, moratorium or
other similar laws relating to or affecting the enforcement of
creditors' rights generally, (b) general principles of equity,
regardless of whether such enforceability is considered in a
proceeding at law or in equity, (c) provisions of law which
may require that a judgment for money damages rendered by a
court in the United
6
States be expressed only in United States dollars, (d)
requirements that a claim with respect to any Debt Securities
denominated other than in U.S. dollars (or a judgment
denominated other than in U.S. dollars 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 and
(e) governmental authority to limit, delay or prohibit the
making of payments outside the United States or in foreign
currency, currency units or composite currencies.
(v) No Governmental Approval is required on the part of
the Company in connection with the issuance or sale of the
Debt Securities other than registration thereof under the 1933
Act, qualification of the Indenture under the 1939 Act, and
such registrations or qualifications as may be necessary under
the securities or Blue Sky laws of the various United States
jurisdictions in which the Debt Securities are to be offered
or sold.
(vi) The Debt Securities, when executed and authenticated
in accordance with the terms of the Indenture and delivered to
and paid for by the Underwriters in accordance with the terms
of this Agreement, will constitute valid and binding
obligations of the Company entitled to the benefits of the
Indenture and enforceable against the Company in accordance
with their terms, subject to the qualification that the
enforceability of the Debt Securities is subject to and may be
limited by (a) applicable bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium or other
similar laws relating to or affecting the enforcement of
creditors' rights generally, (b) general principles of equity,
regardless of whether such enforceability is considered in a
proceeding at law or in equity, (c) provisions of law which
may require that a judgment for money damages rendered by a
court in the United States be expressed only in United States
dollars, (d) requirements that a claim with respect to any
Debt Securities denominated other than in U.S. dollars (or a
judgment denominated other than in U.S. dollars 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 and (e) governmental authority to limit, delay
or prohibit the making of payments outside the United States
or in foreign currency, currency units or composite
currencies.
(vii) The Registration Statement has been declared
effective under the 1933 Act and the Indenture has been
qualified under the 1939 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 proceedings for that purpose have been instituted or
are pending or contemplated.
(viii) The execution and delivery of this Agreement and the
Indenture by the Company, the issuance and sale of the Debt
Securities and the performance by the Company of its
obligations under this Agreement and the Indenture will not
(A) violate the Restated Certificate of Incorporation or
Bylaws, as amended, of the Company, (B) violate any Applicable
Laws or (C) breach or otherwise violate any obligation of or
restriction on the Company under any judgment, decree or
7
order, applicable to the Company and known to such counsel, of
any court or Governmental Authority entered in any proceeding
to which the Company was or is now a party or by which it is
bound; provided, that such counsel may state that no opinion
is expressed as to the securities or Blue Sky laws of the
various jurisdictions in which any of the Debt Securities are
to be offered.
(ix) The Registration Statement, as of its effective date,
and the Prospectus, as of its date, appeared on their face to
comply as to form in all material respects with the applicable
requirements of the 1933 Act and the related rules and
regulations of the Commission thereunder then in effect,
except that in each case such counsel need not express an
opinion as to (i) the Incorporated Documents, (ii) the
financial statements, schedules and other financial and
statistical data included or incorporated by reference therein
or excluded therefrom or (iii) the exhibits to the
Registration Statement, including the Form T-1 incorporated by
reference therein.
(x) The statements in the Prospectus under the captions
"Description of Debt Securities" and "Description of the
Bonds," insofar as they purport to summarize certain
provisions of documents specifically referred to therein,
fairly present the information required by Form S-3.
(xi) Although the discussion set forth in the Prospectus
under the heading "Material United States Federal Tax
Considerations" does not purport to discuss all possible
United States Federal income tax consequences of the purchase,
ownership, and disposition of the Debt Securities, in such
counsel's opinion, such discussion constitutes, in all
material respects, a fair and accurate summary of the United
States Federal income tax consequences of the purchase,
ownership, and disposition of the Debt Securities by the
holders addressed therein, based upon current law and subject
to the qualifications set forth therein.
In rendering the opinions set forth above, such counsel may state that,
with respect to Debt Securities the payments of principal or interest on which
will be determined by reference to one or more currency exchange rates,
commodity prices, equity indices or other factors, no opinion is expressed with
respect to the Commodity Exchange Act, as amended, or the rules, regulations and
interpretations of the Commodities Futures Trading Commission promulgated
thereunder.
In rendering the opinions set forth above, the term "Applicable Laws"
shall mean the Delaware General Corporation Law and those laws, rules and
regulations of the States of California and
New York and of the United States of
America which such counsel has, in the exercise of customary diligence,
recognized as applicable to the Company or transactions of the type contemplated
by this Agreement, the term "Governmental Authority" shall mean any California,
New York, Delaware or federal executive, legislative, judicial, administrative
or regulatory body and the term "Governmental Approval" shall mean any order,
consent, permit or approval of any Governmental Authority pursuant to Applicable
Laws.
8
In addition, such counsel may state that such counsel has not
undertaken to determine independently, and therefore does not assume any
responsibility explicitly or implicitly for, the accuracy, completeness or
fairness of the statements contained or incorporated by reference in the
Registration Statement and Prospectus (except as set forth in clauses (x) and
(xi) above). Such counsel may also state that such counsel has participated in
conferences with representatives of the Company and the Underwriters in the
course of the preparation of the Registration Statement and Prospectus and has
considered the matters required to be stated therein and the statements
contained therein. However, such counsel shall state that, based upon and
subject to the foregoing, nothing has come to such counsel's attention that
causes such counsel to believe that the Registration Statement, as of the time
it became effective, 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 that the Prospectus, as of the date of this
Agreement or as of the Closing Date included or includes an untrue statement of
a material fact or omitted or omits to state a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading (except in each case as to the financial statements and
schedules and other financial and statistical data included or incorporated by
reference therein or excluded therefrom and, in the case of the Registration
Statement, except as to exhibits thereto (including, without limitation, the
Statement of Eligibility under the Trust Indenture Act of the Trustee on Form
T-1 incorporated by reference therein), as to all of which such counsel need
express no opinion).
(b) OPINION OF COUNSEL EMPLOYED BY COMPANY. On the Closing Date,
the Underwriters shall have received an opinion from Xxxxx X. Xxxxxxxx,
Senior Vice President-Assistant General Counsel, or from other counsel
employed by the Company (provided that such counsel is at least a Vice
President of the Company), dated as of the date hereof and in form and
substance satisfactory to counsel for the Underwriters, to the effect
that:
(i) The Company and each of the Significant Subsidiaries
is a corporation validly existing and in good standing under
the laws of its state of incorporation.
(ii) Except as set forth in the Prospectus, there is not
pending or, to the best of such counsel's knowledge, after
reasonable inquiry, threatened any action, suit or proceeding
against the Company or any of its subsidiaries before or by
any court or governmental agency or body, which is likely (to
the extent not covered by insurance) to have a material
adverse effect on the consolidated financial condition or
earnings of the Company and its subsidiaries, considered as
one enterprise.
(iii) To the best of such counsel's knowledge, after
reasonable inquiry, there is no contract or document of a
character required to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit to
the Registration Statement which is not described or filed as
required.
(iv) To the best of such counsel's knowledge, after
reasonable inquiry, the Company is not in violation of its
Restated Certificate of Incorporation or Bylaws, as amended.
9
(v) To the best of such counsel's knowledge, after
reasonable inquiry, the execution, delivery and performance of
this Agreement and the Indenture will not conflict with or
constitute a breach of, or default (with the passage of time
or otherwise) under, any material contract, indenture,
mortgage, loan agreement, note, lease or other instrument to
which the Company is a party or by which it may be bound, or
to which any of the property or assets of the Company or any
of its subsidiaries is subject.
(vi) Each of the Incorporated Documents, as of the date
such document was filed with the Commission, complied as to
form in all material respects with the requirements of the
1934 Act, except that in each case such counsel need not
express an opinion as to the financial statements and
schedules and other financial data included or incorporated by
reference therein or excluded therefrom.
In addition, such counsel shall state that nothing has come to such
counsel's attention that leads him to believe that either the Registration
Statement at the time such Registration Statement became effective 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 the Prospectus as of the date of the Underwriting Agreement and as of the
Closing Date contained or contains an untrue statement of a material fact or
omitted or omits to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, except that such counsel need express no
opinion or belief with respect to the financial statements, schedules and other
financial data included or incorporated by reference therein, or excluded
therefrom or the exhibits to the Registration Statement, including the Form T-1.
(c) OPINION OF UNDERWRITERS' COUNSEL. On the Closing Date, the
Underwriters shall have received an opinion from counsel to the
Underwriters, dated as of the Closing Date and in form and substance
satisfactory to the Underwriters.
(d) OFFICER'S CERTIFICATE. On the Closing Date the Underwriters
shall have received a certificate signed by an officer of the Company,
dated the Closing Date, to the effect that (i) the representations and
warranties of the Company contained in Section 1 hereof are true and
correct in all material respects with the same force and effect as
though expressly made at and as of the date of such certificate, (ii)
the Company has complied with all agreements and satisfied all
conditions required by this Agreement or the Indenture on its part to
be performed or satisfied at or prior to the date of such certificate
and (iii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been initiated or, to the best of such officer's
knowledge, threatened by the Commission. The Officer's Certificate
shall further state that except as contemplated in the Prospectus or
reflected therein by the filing of any amendment or supplement thereto
or any Incorporated Document, at the Closing Date, there shall not have
been, since the date of the most recent consolidated financial
statements included or incorporated by reference in the Prospectus, any
material adverse change in the consolidated financial condition or
earnings of the Company and its subsidiaries considered as one
enterprise. As used in this Section 5(d), the term
10
"Prospectus" means the Prospectus (as defined herein) in the form first
used to confirm sales of the Debt Securities.
(e) COMFORT LETTERS. At the time of the execution of the
Underwriting Agreement, the Underwriters shall have received letters
from the Company's independent certified public accountants, dated as
of the date of the Underwriting Agreement and in form and substance
reasonably satisfactory to the Underwriters.
(f) BRING-DOWN COMFORT LETTERS. On the Closing Date, the
Underwriters shall have received letters from the Company's independent
certified public accountants dated as of the Closing Date, to the
effect that they reaffirm the statements made in the letter furnished
pursuant to subsection (e) of this Section 5, except that the specified
date referred to shall be a date not more than five days prior to the
Closing Date.
(g) RATINGS. At the Closing Date, the debt securities included in
the Registration Statement shall have the ratings accorded by any
"nationally recognized statistical rating organization", as defined by
the Commission for purposes of Rule 436(g)(2) of the 1933 Act
Regulations, if and as specified in the Underwriting Agreement, and the
Company shall have delivered to the Representatives a letter, dated as
of such date, from each such rating organization, or other evidence
satisfactory to the Representatives, confirming that the Debt
Securities have such ratings.
(h) OTHER DOCUMENTS. On the Closing Date, counsel to the
Underwriters shall have been furnished with such documents and opinions
as such counsel may reasonably require for the purpose of enabling such
counsel to pass upon the issuance and sale of Debt 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.
If any condition specified in this Section 5 shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated
by the Representatives by notice to the Company at any time at or prior to the
Closing Date, and such termination shall be without liability of any party to
any other party, except that (i) the Company shall reimburse the Underwriters
for all of their reasonable out-of-pocket expenses, including the reasonable
fees and disbursements of counsel for the Underwriters and (ii) the covenants
set forth in Section 6(f) hereof, the indemnity and contribution agreement set
forth in Sections 7, 8, 9 and 10 hereof and the provisions of Section 18 hereof
shall remain in effect.
6. COVENANTS OF THE COMPANY. In further consideration of the
agreements of the Underwriters contained herein, the Company covenants as
follows:
(a) NOTICE OF CERTAIN EVENTS. The Company will notify the
Representatives promptly of (i) the effectiveness of any post-effective
amendment to the Registration Statement (other than a post-effective
amendment relating solely to an offering of securities other than the
Debt Securities), (ii) the transmittal to the Commission for filing of
any supplement to the Prospectus (other than a supplement relating
solely to an offering of securities other than the Debt Securities),
(iii) the receipt of any comments from the
11
Commission with respect to the Registration Statement or the Prospectus
(other than any comments relating solely to an offering of securities
other than the Debt Securities), (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 (other than
any such request relating solely to an offering of securities other
than the Debt Securities) 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 such stop
order and, if any such stop order is issued, to obtain the lifting
thereof at the earliest possible time unless the Company shall, in its
sole discretion, determine that it is not in its best interest to do
so.
(b) NOTICE OF CERTAIN PROPOSED FILINGS. During the period from the
date of the Underwriting Agreement to and including the Closing Date,
at or prior to the filing thereof, the Company will give the
Representatives notice of its intention to file any additional
registration statement with respect to the registration of additional
Debt Securities to be covered by this Agreement, any amendment to the
Registration Statement or any amendment or supplement to the Prospectus
(other than an amendment or supplement relating solely to an offering
of securities other than the Debt Securities), whether by the filing of
documents pursuant to the 1934 Act, the 1933 Act or otherwise, and will
furnish the Underwriters with copies of any such amendment or
supplement or other documents a reasonable amount of time prior to such
proposed filing or use, as the case may be, and will not file or use
any such document to which the Representatives or counsel to the
Underwriters shall reasonably object, unless, in the judgment of the
Company or its counsel, such amendment or supplement or other document
is necessary to comply with law.
(c) COPIES OF THE REGISTRATION STATEMENT AND THE PROSPECTUS. The
Company will deliver to the Underwriters one copy of the Registration
Statement (as originally filed) and of each amendment thereto
(including the Incorporated Documents and any exhibits filed therewith
or incorporated by reference therein) and the preliminary prospectus as
the Representatives may reasonably request. The Company will furnish to
the Underwriters as many copies of the Prospectus (as amended or
supplemented) as the Representatives shall reasonably request so long
as the Underwriters are required to deliver a Prospectus in connection
with sales or solicitations of offers to purchase the Debt Securities.
(d) REVISIONS OF REGISTRATION STATEMENT AND PROSPECTUS--MATERIAL
CHANGES. So long as the Underwriters are required to deliver a
Prospectus in connection with sales of the Debt Securities, if any
event shall occur or condition exist as a result of which it is
necessary, in the opinion of counsel for the Company, after
consultation with 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 in order to make the statements therein, in light of the
circumstances existing at the time it is delivered to a purchaser, not
misleading, or if it shall be necessary, in the opinion of counsel for
the Company, 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, prompt notice shall be given, and confirmed
in
12
writing, to the Representatives, and the Company will prepare and file
as soon as practicable such amendment or supplement to the Registration
Statement or Prospectus as may be necessary to correct such
misstatement or omission or to make the Registration Statement or the
Prospectus comply with such requirements and the Company will furnish
to the Underwriters, without charge, such number of copies of such
amendment or supplement as the Underwriters may reasonably request. The
filing of any such amendment or supplement shall not constitute a
waiver of any of the conditions set forth in Section (5) hereof or of
Section 11(i).
(e) COMPLIANCE WITH 1934 ACT. The Company, during the period when
the Prospectus is required to be delivered under the 1933 Act or the
1934 Act, will comply, in a timely manner, with all applicable
requirements under the 1934 Act relating to the filing with the
Commission of the Company's reports pursuant to Section 13(a), 13(c) or
15(d) of the 1934 Act and, if then applicable, the Company's proxy
statements pursuant to Section 14(a) of the 1934 Act.
(f) EARNINGS STATEMENT. The Company will make generally available
to its security holders, as soon as practicable but in any event not
later than 15 months after the Closing Date, a consolidated earnings
statement (which need not be audited) covering the twelve-month period
beginning after the latest of (i) the effective date of the
Registration Statement, (ii) the effective date of the most recent
post-effective amendment to the Registration Statement to become
effective or (iii) the Company's most recent annual report on Form 10-K
filed with the Commission prior to the Closing Date, which earnings
statement will satisfy the provisions of Section 11(a) of the 1933 Act.
The Company may elect to rely upon Rule 158 under the 1933 Act and may
elect to make such earnings statement available more frequently than
once in any period of twelve months.
(g) BLUE SKY QUALIFICATIONS. The Company will endeavor, in
cooperation with the Underwriters, to qualify the Debt Securities for
offering and sale under the applicable securities laws of such states
in the United States as the Representatives may reasonably designate,
and will maintain such qualifications in effect for as long as may be
required for the distribution of the Debt Securities; provided,
however, that the Company will promptly notify the Representatives of
any suspension or termination of any such qualifications; and provided,
further, that the Company shall not be obligated to register or qualify
as a foreign corporation or take any action which would subject it to
general service of process in any jurisdiction where it is not now so
subject.
7. INDEMNIFICATION OF THE UNDERWRITERS. The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls an Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act as follows:
(a) against any and all loss, liability, claim, damage and expense
whatsoever (including, subject to the limitations set forth in Section
9 hereof, the reasonable fees and disbursements of counsel chosen by
the Underwriters), as incurred, insofar as such loss, liability, claim,
damage or expense arises out of any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement
(or any amendment
13
thereto), or the omission or alleged omission therefrom of a material
fact required to be stated therein or necessary to make the statements
therein not misleading, or arises out of any untrue statement or
alleged untrue statement of a material fact contained in the Prospectus
(or any amendment or supplement thereto) or the omission or alleged
omission therefrom of a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading;
(b) against any and all loss, liability, claim, damage and expense
whatsoever (including, subject to the limitations set forth in Section
9 hereof, the reasonable fees and disbursements of counsel chosen by
the Underwriters), as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or investigation or proceeding by
any governmental agency or body, commenced or threatened, or of any
claim whatsoever insofar as such loss, liability, claim, damage or
expense arises out of any such untrue statement or omission, or any
such alleged untrue statement or omission, if such settlement is
effected with the written consent of the Company; and
(c) against any and all expense whatsoever (including, subject to
the limitations set forth in Section 9 hereof, the reasonable fees and
disbursements of counsel chosen by the Underwriters), as incurred,
reasonably incurred in investigating, preparing or defending against
any litigation, or investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever, based
upon any such untrue statement or omission, or any such alleged untrue
statement or omission;
PROVIDED, HOWEVER, that this indemnity shall not apply to any loss, liability,
claim, damage or expense (A) to the extent arising out of or based upon any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon the Form T-1 under the 1939 Act filed as an exhibit to the
Registration Statement; or (B) to the extent arising out of any untrue statement
or omission or alleged untrue statement or omission in the Prospectus if such
untrue statement or alleged untrue statement or omission or alleged omission is
corrected in all material respects in an amendment or supplement to the
Prospectus and if, having previously been furnished by or on behalf of the
Company with copies of the Prospectus, as so amended or supplemented, such
Underwriter thereafter failed to deliver such Prospectus, as so amended or
supplemented, if required to be delivered by such Underwriter prior to or
concurrently with the sale of the Debt Securities to the person asserting such
loss, liability, claim, damage or expense who purchased the Debt Securities
which are the subject thereof from such Underwriter; or (C) as to which such
Underwriter may be required to indemnify the Company pursuant to the provisions
of Section 8.
8. INDEMNIFICATION OF THE COMPANY. Each Underwriter severally
(and not jointly) agrees to indemnify and hold harmless the Company, its
directors, each of its officers who signed the Registration Statement, and each
person, if any, who controls the Company within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection (a)
of Section 7 hereof, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto) or the Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity
14
with written information furnished to the Company by or on behalf of such
Underwriter through the Representatives expressly for use in the Registration
Statement or the Prospectus.
9. GENERAL. In case any action, suit or proceeding (including any
governmental or regulatory investigation or proceeding) shall be brought against
any Underwriter or any person controlling such Underwriter, based upon the
Registration Statement or the Prospectus and with respect to which indemnity may
be sought against the Company pursuant to Section 7, such Underwriter or
controlling person shall promptly notify the Company in writing, and the Company
shall assume the defense thereof, including the employment of counsel (such
counsel to be reasonably acceptable to such Underwriter) and payment of all
expenses. Any such Underwriter or any such controlling person shall have the
right to employ separate counsel in any such action, suit or proceeding and to
participate in the defense thereof, but the fees and expenses of such separate
counsel shall be at the expense of such Underwriter or such controlling person
unless (A) the employment of such counsel shall have been specifically
authorized in writing by the Company, (B) the Company shall have failed to
assume the defense and employ counsel or (C) the named parties to any such
action, suit or proceeding (including any impleaded parties) shall include both
such Underwriter or such controlling person and the Company, and such
Underwriter or such controlling person shall have been advised by counsel that
there may be one or more legal defenses available to it which are different
from, or additional to, those available to the Company (in which case, if such
Underwriter or such controlling person notifies the Company in writing that it
selects to employ separate counsel at the expense of the Company, the Company
shall not have the right to assume the defense of such action, suit or
proceeding on behalf of such Underwriter or such controlling person, it being
understood, however, that the Company shall not, in connection with any one such
action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of more than one separate firm of
attorneys (in addition to any local counsel) for all such Underwriters and such
controlling persons, which firm shall be designated in writing by the
Representatives on behalf of all of such Underwriters and such controlling
persons).
In case any action, suit or proceeding (including any governmental or
regulatory investigation or proceeding) shall be brought against the Company,
any of the Company's directors or officers, or any person controlling the
Company, with respect to which indemnity may be sought against any Underwriter
pursuant to Section 8, such Underwriter shall have the rights and duties given
to the Company by this Section 9, and the Company, the Company's directors and
officers and any such controlling person shall have the rights and duties given
to the Underwriters by this Section 9.
10. CONTRIBUTION. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Sections 7 and 8 hereof is for any reason held to be unenforceable with respect
to the indemnified parties although applicable in accordance with its terms, the
Company and the Underwriters shall contribute to the aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by said
indemnity agreement incurred by the Company and the Underwriters, as incurred,
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 Debt Securities. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law or
15
if the indemnified party failed to give the notice required pursuant to Section
9 hereof or pursuant to the last sentence of this Section 10, then the Company
and the Underwriters shall contribute to such aggregate losses, liabilities,
claims, damages and expenses incurred by the Company and the Underwriters, as
incurred, 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 the
Underwriters on the other hand in connection with the statements or omissions
which resulted in such losses, liabilities, claims, damages or expenses, as well
as any other relevant equitable considerations. The relative benefits received
by the Company on the one hand and the Underwriters on the other hand in
connection with the offering of the Debt Securities shall be deemed to be in the
same proportion as the total net proceeds from the sale of the Debt Securities
received by the Company (before deducting expenses) bear to the total
commissions or other compensation or remuneration received by the Underwriters
in respect thereof. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. Notwithstanding the provisions of this
Section 10, no Underwriter shall be required to contribute any amount in excess
of the amount by which the total price at which the Debt Securities purchased by
it 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 0000 Xxx) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation. For
purposes of this Section 10, each person, if any, who controls an Underwriter
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
shall have the same rights to contribution as such Underwriter, and each
director of the Company, each officer of the Company who signed the Registration
Statement and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same
rights to contribution as the Company. Any party entitled to contribution
pursuant to the first sentence of this Section 10, will, promptly after receipt
of notice of commencement of any action, suit or proceeding against such party
in respect of which a claim for contribution may be made against another party
or parties under this Section 10, notify such party or parties from whom
contribution may be sought, but the omission to so notify such party or parties
shall not relieve the party or parties from whom contribution may be sought from
any other obligation it or they may have otherwise than under this Section 10;
provided, however, that such notice need not be given if such party entitled to
contribution hereunder has previously given notice pursuant to Section 9 hereof
with respect to the same action, suit or proceeding.
11. TERMINATION. The Underwriters may terminate the Underwriting
Agreement immediately upon notice to the Company, at any time prior to the
Closing Date if (i) there has been, since the date of the Underwriting
Agreement, any material adverse change in the consolidated financial condition
or earnings of the Company and its subsidiaries, considered as one enterprise,
(ii) there has occurred any material adverse change in the financial markets in
the United States or any outbreak or escalation of hostilities or other calamity
or crisis, the effect of which is such as to make it, in the reasonable judgment
of the Representatives, impracticable to market the Debt Securities or to
enforce contracts for the sale of the Debt Securities, (iii) trading in any
securities of the Company has been suspended (other than pursuant to a request
by the
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Company with respect to an announcement by the Company of certain information
not constituting a material adverse change, since the date of the Underwriting
Agreement, in the consolidated financial condition or earnings of the Company
and its subsidiaries, considered as one enterprise), the effect of which is such
as to make it, in the reasonable judgment of the Representatives, impracticable
to market the Debt Securities or to enforce contracts for the sale of the Debt
Securities, (iv) trading generally on 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 shall have been required, by such exchange 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 or if a
banking moratorium has been declared by the relevant authorities in the country
or countries of origin of any foreign currency or currencies in which the Debt
Securities are denominated or payable or (v) after the date of the Underwriting
Agreement, the rating assigned by any nationally recognized securities rating
agency to any debt securities of the Company or its Significant Subsidiaries as
of the date of the Underwriting Agreement shall have been lowered or any such
rating agency shall have publicly announced that it has placed any debt
securities of the Company or its Significant Subsidiaries on what is commonly
termed a "watch list" with negative implications. As used in this Section 11,
the term "Prospectus" means the Prospectus (as defined herein) in the form first
used to confirm sales of the Debt Securities.
In the event of any such termination, no party will have any liability
to any other party hereto, except that (i) the covenants set forth in Section
6(f) hereof, the indemnity and contribution agreement set forth in Sections 7,
8, 9 and 10 hereof and the provisions of Section 18 hereof shall remain in
effect and (ii) if the Underwriting Agreement is terminated by the Underwriters
in accordance with the provisions of Section 11(i) hereof, the Company shall
reimburse the Underwriters for all of their out-of-pocket expenses, including
the reasonable fees and disbursements of counsel for the Underwriters.
12. DEFAULTING UNDERWRITERS. If on the Closing Date any one or
more of the Underwriters shall fail or refuse to purchase Debt Securities that
it has or they have agreed to purchase on such date, and the aggregate amount of
Debt Securities which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase is not more than one-tenth of the aggregate amount
of the Debt Securities to be purchased on such date, the other Underwriters
shall be obligated severally in the proportions that the amount of Debt
Securities set forth opposite their respective names above bears to the
aggregate amount of Debt Securities set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as the Representatives
may specify, to purchase the Debt Securities which such defaulting Underwriter
or Underwriters agreed but failed or refused to purchase on such date. If on the
Closing Date any Underwriter or Underwriters shall fail or refuse to purchase
Debt Securities and the aggregate amount of Debt Securities with respect to
which such default occurs is more than one-tenth of the aggregate amount of Debt
Securities to be purchased on such date, and arrangements satisfactory to the
Representatives and the Company for the purchase of such Debt Securities 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 Representatives or the Company shall have the right to
postpone the Closing Date but in no event for longer then seven days, in order
that the required changes, if any, in the Registration Statement and in the
Prospectus or in any other documents or arrangements may be effected.
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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.
13. SELLING AND OTHER RESTRICTIONS.
(a) Each Underwriter, on behalf of itself and each of its
affiliates that participates in the initial distribution of the Debt
Securities, severally:
(i) represents and agrees with the Company that (a) it
has not offered or sold and prior to the date six months after
the date of issue of the bonds will not offer or sell any Debt
Securities to persons in the United Kingdom, except to persons
whose ordinary activities involve them in acquiring, holding,
managing or disposing of investments (as principal or agent)
for the purposes of their businesses or otherwise in
circumstances that have not resulted and will not result in an
offer to the public in the United Kingdom within the meaning
of the Public Offers of Securities Regulation 1995; (b) it has
complied, and will comply with, all applicable provisions of
the Financial Services Xxx 0000 of Great Britain with respect
to anything done by it in relation to the Debt Securities in,
from or otherwise involving the United Kingdom; and (c) it has
only issued or passed on and will only issue or pass on in the
United Kingdom any document received by it in connection with
the issuance of the Debt Securities to a person who is of a
kind described in Article 11(3) of the Financial Services Xxx
0000 (Investment Advertisements) (Exemptions) Order 1996 or is
a person to whom the document may lawfully be issued or passed
on;
(ii) acknowledges and agrees with the Company that the
Debt Securities have not been registered under the Securities
and Exchange Law of Japan and are not being offered or sold
and may not be offered or sold, directly or indirectly, in
Japan or to or for the account of any resident of Japan,
except (1) pursuant to an exemption from the registration
requirements of the Securities and Exchange Law of Japan and
(2) in compliance with any other applicable requirements of
Japanese law;
(iii) agrees that the Debt Securities may not be offered,
sold, transferred or delivered in or from The Netherlands, as
part of their initial distribution or as part of any
re-offering, and neither the Prospectus nor any other document
in respect of the offering may be distributed or circulated in
The Netherlands, other than to individuals or legal entities
which include, but are not limited to, banks, brokers,
dealers, institutional investors and undertakings with a
treasury department, who or which trade or invest in
securities in the conduct of a business or profession; and
(iv) agrees that it has not and will not offer or sell any
Debt Securities or distribute any document or other material
relating to the Debt Securities either directly or indirectly,
to the public or any member of the public in Singapore other
than (1) to an institutional investor or other person
specified in Section 106C of the Companies Act, Chapter 50 of
Singapore (the "Singapore Companies Act"),
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or (2) to a sophisticated investor in accordance with the
conditions specified in Section 106D of the Singapore
Companies Act or (3) otherwise pursuant to, and in accordance
with the conditions of, any other provision of the Singapore
Companies Act.
(b) In addition to the provisions of subparagraph (a)(i), (ii),
(iii) and (iv) of this Section 13, each Underwriter severally
represents to and agrees with the Company that it has not offered, sold
or delivered and that it will not offer, sell or deliver, directly or
indirectly, any of the Debt Securities or distribute the Prospectus,
any preliminary prospectus or any other material relating to the Debt
Securities, in or from any jurisdiction except under circumstances that
will, to the best of its knowledge and belief, result in compliance
with the applicable laws and regulations thereof and which will not
impose any obligations on the Company except as contained in this
Agreement.
(c) Without prejudice to the other provisions of this Section 13
and except for registration under the 1933 Act and compliance with the
1933 Act Regulations and the qualification of the Debt Securities for
offer and sale under the applicable securities laws of such
jurisdictions within the United States as the Representatives may
designate pursuant to Section 6(g), the Company shall not have any
responsibility for, and each Underwriter severally agrees with the
Company that each such Underwriter and its respective affiliates will
obtain, any consent, approval or authorization required by them for the
subscription, offer, sale or delivery by them of any of the Debt
Securities under the laws and regulations in force in any jurisdiction
to which they are subject or in or from which they make such
subscription, offer, sale or delivery of any of the Debt Securities.
14. 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.
15. PARTIES. This Agreement shall inure to the benefit of and be
binding upon the Company and the Underwriters and their respective successors.
Nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any person, firm or corporation, other than the Underwriters
and the Company and their respective successors and the controlling persons and
officers and directors referred to in Sections 7 and 8 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 parties hereto and their respective successors, and
said controlling persons and officers and directors and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation. No
purchaser of Debt Securities from any Underwriter shall be deemed to be a
successor by reason merely of such purchase.
16. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. All representations, warranties and agreements contained in this
Agreement or 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
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person, or by or on behalf of the Company, and shall survive delivery of and
payment for the Debt Securities.
17. MISCELLANEOUS. The Underwriting Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto were upon the same instrument.
18. CHOICE OF LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES CREATED HEREBY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF
NEW YORK, INCLUDING WITHOUT LIMITATION, SECTION
5-1401 OF TITLE 14 OF THE
NEW YORK GENERAL OBLIGATIONS LAW.
19. 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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