1
EXHIBIT 1.1
UNDERWRITING AGREEMENT
SERVICE CORPORATION INTERNATIONAL
Debt Securities
March 11, 1998
To the Underwriter or
Underwriters named in
the within mentioned
Terms Agreement
Ladies and Gentlemen:
Service Corporation International, a Texas corporation (the
"Company"), may issue and sell from time to time its debt securities,
consisting of (i) unsecured senior debt securities (the "Senior Debt
Securities"), (ii) unsecured senior subordinated debt securities (the "Senior
Subordinated Debt Securities") and (iii) subordinated debt securities (the
"Subordinated Debt Securities" and, together with the Senior Debt Securities
and the Senior Subordinated Debt Securities, the "Debt Securities"). The Debt
Securities are registered under the registration statement referred to in
Section 4(i) hereof. The Debt Securities may be issued in one or more series
and may have varying designations, denominations, interest rates and payment
dates, maturities, redemption provisions, conversion provisions, exchange
provisions and selling prices. The Senior Debt Securities will be issued under
an indenture (the "Senior Indenture") dated February 1, 1993 entered into
between the Company and The Bank of New York, as trustee (the "Senior
Trustee"). The Senior Subordinated Debt Securities will be issued under an
indenture (the "Senior Subordinated Indenture") to be entered into between the
Company and Texas Commerce Bank National Association, as trustee (the "Senior
Subordinated Trustee"). The Subordinated Debt Securities will be issued under
an indenture (as amended by the First Amendment thereto dated as of August 23,
1996, the "Subordinated Indenture" and, together with the Senior Indenture and
the Senior Subordinated Indenture, the "Indentures") dated September 1, 1991
between the Company and Chase Bank of Texas, National Association, formerly
known as Texas Commerce Bank National Association, as trustee (the
"Subordinated Trustee" and, together with the Senior Trustee and the Senior
Subordinated Trustee,
2
the "Trustees"). The Senior Subordinated Debt Securities and the Subordinated
Debt Securities may be convertible into shares of common stock, par value $1.00
per share, of the Company (the "Common Stock"). The basic provisions set forth
herein are intended to be incorporated by reference in a terms agreement of the
type referred to below relating to, among other things, the designation and
series of Debt Securities and the aggregate principal amount of Debt Securities
(the "Underwritten Securities") to be issued and sold by the Company pursuant
thereto and to be purchased, severally, by the underwriter or several
underwriters named therein (the "Underwriters"). The Terms Agreement, which
shall be in the form of Exhibit I hereto (the "Terms Agreement"), relating to
the Underwritten Securities and such additional aggregate principal amount of
Debt Securities that the Underwriters may be granted an option to purchase by
the Company to cover over-allotments in connection with any offering of
Underwritten Securities (the "Option Securities" and together with the
Underwritten Securities, the "Offered Securities"), together with the
provisions hereof incorporated therein by reference (which provisions shall not
become effective until so incorporated by reference), is herein referred to as
this "Agreement." The Terms Agreement may reflect that a portion of the
Underwritten Securities are to be sold to the several U.S. underwriters named
therein (the "U.S. Underwriters") in connection with the offering and sale of a
portion of the Underwritten Securities in the United States and Canada (the
"U.S. Underwritten Securities") to United States and Canadian persons (as
defined in the instruments governing the coordination of the offering by the
U.S. Underwriters and the International Managers (as defined below) named
therein) and that the balance of the Underwritten Securities (the
"International Underwritten Securities") are to be sold to the several
international managers named therein (the "International Managers") in
connection with the offering and sale of such International Underwritten
Securities outside the United States and Canada to persons other than United
States and Canadian persons. In such event, as used herein, the term
"Underwriters" refers to the U.S. Underwriters and the International Managers,
and the term "Representatives" refers to the U.S. Representatives named therein
of the U.S. Underwriters and the International Representatives named therein of
the International Managers. If the Underwriters consist only of the firm or
firms referred to in the Terms Agreement as the Representative or
Representatives, then the terms "Underwriters" and "Representatives," as used
herein, shall be deemed to refer to such firm or firms.
The obligations of the Underwriters to purchase, and the Company to sell, the
Offered Securities are evidenced by
3
-3-
the Terms Agreement delivered at the time the Company determines to sell the
Offered Securities and, without the execution and delivery of the Terms
Agreement, the Company shall not be obligated to sell, and the Underwriters
shall not be obligated to purchase, any Debt Securities pursuant to this
Agreement. The Terms Agreement specifies the firm or firms which will be
Underwriters, the aggregate principal amount of the Offered Securities to be
purchased by each Underwriter, the purchase price to be paid by the
Underwriters for the Offered Securities, the public offering price, if any, of
the Offered Securities and any terms of the Offered Securities not otherwise
specified in the applicable Indenture (including, but not limited to,
designations, denominations, conversion or exchange provisions, covenants,
interest rates and payment dates, maturity, redemption provisions and sinking
fund requirements). The Terms Agreement specifies any details of the terms of
the offering that should be reflected in a post-effective amendment to the
applicable Registration Statement or the Prospectus Supplement (each as
hereinafter defined).
The terms which follow, when used in this Agreement, shall
have the meanings indicated. "Registration Statement" shall mean the
registration statement or registration statements relating to the Offered
Securities (and such other securities of the Company as may be included
therein), which shall be the registration statement on Form S-3 filed under the
Securities Act of 1933, as amended (collectively with the rules and regulations
of the Securities and Exchange Commission (the "Commission") thereunder, the
"Securities Act"), referred to in Section 4(i) below, including all documents
incorporated therein by reference and all exhibits thereto, as from time to
time amended or supplemented pursuant to the Securities Act, the Securities
Exchange Act of 1934, as amended (collectively with the rules and regulations
of the Commission thereunder, the "Exchange Act"), or otherwise, including as
supplemented by the Prospectus Supplement, on or prior to the date of execution
and delivery of the Terms Agreement (the "Representation Date") and, in the
event any such amendment or supplement is filed prior to the Closing Date (as
defined in Section 3 hereof), including by the filing of any Prospectus
Supplement or document incorporated by reference, shall also mean such
registration statement as so amended or supplemented. "Prospectus" shall mean
the prospectus (including the related Prospectus Supplement with respect to the
Offered Securities) relating to the Debt Securities (and such other securities
of the Company as may be covered thereby), including all documents incorporated
therein by reference, as from time to time amended or supplemented pursuant to
the Securities Act, the Exchange Act or
4
-4-
otherwise; provided, however, that a Prospectus Supplement shall be deemed to
have supplemented the Prospectus only with respect to the Offered Securities to
which it relates. Any reference herein to the terms "amend," "amendment" or
"supplement" with respect to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to refer to and include the filing
of any document under the Exchange Act after the effective date of the
Registration Statement, or the issue date of any preliminary prospectus or the
Prospectus, as the case may be, and on or prior to the completion of the
applicable offering (which shall be deemed to be not earlier than such time as
no Underwriter or dealer is required by law to deliver a prospectus in
connection with sales of the Offered Securities) and which is deemed to be
incorporated therein by reference.
1. Agreements to Sell and Purchase. The Company agrees
to issue and sell to each Underwriter as hereinafter provided, and each
Underwriter, upon the basis of the representations and warranties herein
contained, but subject to the conditions hereinafter stated, agrees to purchase
at the purchase price set forth in the Terms Agreement, severally and not
jointly, from the Company the respective aggregate principal amount of
Underwritten Securities set forth opposite the name of such Underwriter on the
annex or annexes to Exhibit I hereto (or such aggregate principal amount of
Underwritten Securities, as the case may be, increased as set forth in Section
9 hereof, subject to such adjustments to eliminate any fractional Offered
Securities as the Representatives in their sole discretion may make).
If, pursuant to the Terms Agreement, the Company shall have
granted the option to the Underwriters to purchase Option Securities, the
Company agrees to sell to the Underwriters designated in the Terms Agreement to
purchase Option Securities (each an "Option Securities Underwriter" and
collectively, the "Option Securities Underwriters") the Option Securities, and
the Option Securities Underwriters shall have a one-time right to purchase,
severally and not jointly, the Option Securities on the terms set forth in the
Terms Agreement. Option Securities may be purchased as provided below solely
for the purpose of covering over-allotments made in connection with the
offering of the Underwritten Securities. If any Option Securities are to be
purchased, subject to the conditions hereinafter stated, each Option Securities
Underwriter agrees, severally and not jointly, to purchase the number of Option
Securities (subject to such adjustments to eliminate any fractional Offered
Securities as the Representatives designated in the Terms Agreement in their
sole discretion may make) that bears
5
-5-
the same proportion to the total number of Option Securities to be purchased as
the number of Underwritten Securities set forth in the annex or annexes to
Exhibit I hereto opposite the name of such Option Securities Underwriter bears
to the total number of Underwritten Securities to be purchased by all Option
Securities Underwriters.
The Option Securities Underwriters may exercise the option to
purchase the Option Securities at any time on or before the thirtieth day
following the Representation Date, by written notice from the Representatives
designated in the Terms Agreement to the Company. Such notice shall set forth
the aggregate number of Option Securities as to which the option is being
exercised and the date and time when the Option Securities are to be delivered
and paid for, which may be the same date and time as the Closing Date (as
hereinafter defined) but shall not be earlier than the Closing Date nor later
than the tenth full Business Day (as hereinafter defined) after the date of
such notice (unless such time and date are postponed in accordance with the
provisions of Section 9 hereof). Such notice shall be given at least two
Business Days prior to the date and time of delivery specified therein.
2. Terms of Public Offering. The Company understands
that the Underwriters intend (i) to make a public offering of the Offered
Securities as soon after the Prospectus Supplement has been filed and the Terms
Agreement has been executed and delivered as in the judgment of the
Representatives is advisable and (ii) initially to offer the Offered Securities
upon the terms set forth in the Prospectus Supplement and the Underwriters will
advise the Company as to any alteration in the terms of such offering that
would require, pursuant to the Securities Act, any amendment or supplement to
the Prospectus Supplement.
3. Delivery of the Offered Securities and Payment
Therefor. Payment for the Offered Securities shall be made to the Company or
to the Company's order by wire transfer of immediately available funds in such
location as the Representatives shall designate in the Terms Agreement at, in
the case of the Underwritten Securities, such time and date as are specified in
the Terms Agreement, or at such other time on the same or such other date, not
later than the fifth Business Day (as hereinafter defined) thereafter, as the
Representatives and the Company may agree upon in writing or, in the case of
the Option Securities, on the date and at the time specified by the
Representatives designated in the Terms Agreement to exercise such option in
the written notice by such Representatives of the election
6
-6-
to purchase such Option Securities by the Option Securities Underwriters. The
time and date of such payment for the Underwritten Securities are referred to
herein as the "Closing Date" and the time and date for such payment for the
Option Securities, if other than the Closing Date, are herein referred to as
the "Additional Closing Date." As used herein, the term "Business Day" means
any day other than a day on which banks are permitted or required to be closed
in New York City.
Payment for the Offered Securities to be purchased on the
Closing Date or the Additional Closing Date, as the case may be, shall be made
against delivery to the Representatives for the respective accounts of the
several Underwriters of the Offered Securities to be purchased on such date
registered in such names and in such denominations as the Representatives shall
request in writing not later than two full Business Days prior to the Closing
Date or the Additional Closing Date, as the case may be, with any transfer
taxes payable in connection with the transfer to the Underwriters of the
Offered Securities duly paid by the Company. The Company hereby agrees to pay
any such transfer taxes. The certificates for the Offered Securities will be
made available for inspection and packaging by the Representatives not later
than 1:00 P.M., New York City time, on the Business Day prior to the Closing
Date or the Additional Closing Date, as the case may be.
4. Representations and Warranties of the Company. The
Company represents and warrants to each Underwriter as of the Representation
Date and as of the Closing Date that:
(i) A registration statement on Form S-3 (Registration
No. 333-10867), including a prospectus, with respect to the Debt
Securities (and such other securities of the Company as may be covered
thereby), (i) has been prepared by the Company in conformity with the
requirements of the Securities Act, (ii) has been filed with the
Commission and (iii) has become effective. Such Registration
Statement and the related prospectus may have been amended or
supplemented from time to time prior to the Representation Date; any
such amendment to the applicable Registration Statement was so
prepared and filed and any such amendment has become effective. A
prospectus supplement (the "Prospectus Supplement"), including a
prospectus, relating to the Offered Securities has been prepared. The
Prospectus Supplement and, if not previously filed, such prospectus
will be filed pursuant to Rule 424 under the Securities Act. If the
offering of the Offered Securities is to be made by U.S. Underwriters
and
7
-7-
International Managers, two such prospectus supplements, one relating
to the Offered Securities to be sold by the U.S. Underwriters and one
relating to the Underwritten Securities to be sold by the
International Managers, and each identical to the other except for the
cover page, have been so prepared and filed. In such event, the term
"Prospectus Supplement" refers to such international and U.S.
prospectus supplements. Copies of such Registration Statement and the
Prospectus relating thereto, any such amendment or supplement, the
Prospectus Supplement and all documents incorporated by reference
therein which were filed with the Commission on or prior to the
Representation Date (including one fully executed copy of the
Registration Statement and of each amendment thereto for counsel for
the Underwriters) have been delivered to each of the Representatives.
The Company has included in the Registration Statement, as amended at
the date the Registration Statement was declared effective (the
"Effective Date"), all information (other than information relating
specifically to the terms of any particular series of Debt Securities
and the offering thereof) required by the Securities Act to be
included in the Prospectus with respect to the Offered Securities (and
the Common Stock, if applicable) and the offering and sale thereof.
Except to the extent that the Underwriters shall agree in writing to a
modification, the Registration Statement and the Prospectus shall be
in all substantive respects in the form furnished to the Underwriters
prior to the Representation Date or, to the extent not completed at
the Representation Date, shall contain only such specific additional
information and other changes as the Company has advised the
Underwriters, a reasonable time prior to the Representation Date, is
to be included or made therein and as to which the Underwriters have
not reasonably objected.
(ii) The Registration Statement, at the time it became
effective, any post-effective amendment thereto, at the time it became
effective, the Registration Statement and the Prospectus, as of the
Representation Date and at the Closing Date, and any amendment or
supplement thereto, conformed or will conform in all material respects
to the requirements of the Securities Act and the Trust Indenture Act
of 1939, as amended, and the Rules and Regulations of the Commission
thereunder (the "Trust Indenture Act"); and no such document included
or will include an untrue statement of a material fact or omitted or
will omit to state a material fact required to be stated therein or
necessary to make the statements therein (in the case of the
8
-8-
Prospectus, in the light of the circumstances under which they were
made) not misleading; provided, however, that the Company makes no
representation or warranty as to (a) information contained in or
omitted from the Registration Statement or the Prospectus in reliance
upon and in conformity with written information relating to any
Underwriter furnished to the Company by or on behalf of any
Underwriter expressly for use therein and (b) that part of the
Registration Statement that constitutes the Statement of Eligibility
on Form T-1 of any of the Trustees under the Trust Indenture Act filed
as an exhibit to the Registration Statement (the "Form T-1").
(iii) No order preventing or suspending the use of any
preliminary prospectus has been issued by the Commission.
(iv) (A) No stop order suspending the effectiveness of the
Registration Statement is in effect and no proceedings for that
purpose are pending before or threatened by the Commission and (B)
each document, if any, filed or to be filed pursuant to the Exchange
Act and incorporated by reference in the Prospectus complied or will
comply when so filed in all material respects with the Exchange Act
and did not, or will not when so filed, contain an untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
(v) Coopers & Xxxxxxx L.L.P., who are reporting upon the
audited financial statements and the supporting schedules of the
Company included or incorporated by reference in the Registration
Statement and the Prospectus, are independent public accountants
within the meaning of the Securities Act. The financial statements,
and the related notes thereto, included or incorporated by reference
in the Registration Statement and the Prospectus, present fairly the
consolidated financial position of the Company and its consolidated
subsidiaries as of the dates indicated and the results of their
operations and the changes in their consolidated cash flows for the
periods specified; and said financial statements have been prepared in
conformity with United States generally accepted accounting principles
applied on a consistent basis, except as set forth therein, and the
supporting schedules included or incorporated by reference in the
Registration Statement present fairly the information required to be
stated therein. If pro forma financial information is included in or
incorporated by reference into the Registration
9
-9-
Statement and the Prospectus, such pro forma financial information
(including, without limitation, the notes thereto) as of the date
presented (A) presented fairly in all material respects the
information shown therein, (B) was prepared in accordance with
applicable requirements of Regulation S-X promulgated under the
Exchange Act, (C) was prepared in accordance with the Commission's
rules and guidelines with respect to pro forma financial statements
and (D) was properly computed on the bases described therein. In the
opinion of the Company, the assumptions used in the preparation of any
such pro forma financial information (including, without limitation,
the notes thereto) were fair and reasonable and the adjustments used
therein were appropriate to give effect to the transactions or
circumstances referred to therein. No pro forma financial statements
or other pro forma financial information is required to be included or
incorporated by reference in the Registration Statement and the
Prospectus other than those included or incorporated by reference
therein.
(vi) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the State
of Texas, has the corporate power and authority to own its property
and to conduct its business as described in the Registration Statement
and the Prospectus and to enter into this Agreement and the Terms
Agreement, and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or
its ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be in good
standing could not, singly or in the aggregate, reasonably be expected
to have a material adverse effect on the condition (financial or
otherwise), earnings, business affairs or business prospects of the
Company and its subsidiaries, taken as a whole (each, a "Material
Adverse Effect").
(vii) Each direct and indirect foreign and domestic
subsidiary of the Company listed on Schedule I hereto, which
constitute all of the significant subsidiaries of the Company within
the meaning of Rule 1-02 of Regulation S-X under the Exchange Act
(each, a "Subsidiary" and collectively, the "Subsidiaries") has been
duly incorporated or organized, is validly existing as a corporation
or entity in good standing under the laws of the jurisdiction of its
incorporation or organization, has the corporate or other power and
authority to own its property and to conduct
10
-10-
its business as described in the Registration Statement and the
Prospectus and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or
its ownership or leasing of property requires such qualification,
except to the extent that the failure to be so incorporated, be in
existence, have such power and authority, be so qualified or be in
good standing could not, singly or in the aggregate, reasonably be
expected to have a Material Adverse Effect. All of the outstanding
shares of capital stock of each Subsidiary have been duly authorized
and validly issued, are fully paid and nonassessable, and, except as
set forth in the Registration Statement and the Prospectus, are owned
by the Company, directly or indirectly, free and clear of all liens,
encumbrances, security interests, claims and restrictions on
transferability and voting (other than any restrictions on
transferability as may arise under state and federal securities laws).
Except as set forth in the Registration Statement and the Prospectus,
there are no outstanding (i) securities or obligations convertible
into or exchangeable or exercisable for any shares of capital stock
of, or other interest in, the Company or any Subsidiary, (ii) rights,
warrants or options to acquire or purchase any shares of capital stock
of, or other interest in, the Company or any Subsidiary or any such
convertible, exchangeable or exercisable securities or obligations, or
(iii) obligations or understandings to issue or sell any shares of
capital stock of, or other interest in, the Company or any Subsidiary,
any such convertible, exchangeable or exercisable securities or
obligations, or any such warrants, rights or options, except as have
been disclosed to the Underwriters in writing prior to the date hereof
and except for (A) issuances of shares of Common Stock and options to
acquire Common Stock after the date of the most recent information set
forth in the Registration Statement and the Prospectus pursuant to the
Company's employee benefit plans as in effect on the date hereof and
(B) issuances after the date of the most recent information set forth
in the Registration Statement and the Prospectus of convertible
debentures of the Company and Common Stock pursuant to the Company's
Registration Statement on Form S-4 (Registration No. 33-54996) and the
Company's Registration Statement on Form S-4 (Registration No.
333-01857) (together, the "S-4").
(viii) There are no partnerships in which the Company or any
of the Subsidiaries has any direct or indirect controlling interest
that would constitute a significant subsidiary
11
-11-
within the meaning of Rule 1-02 of Regulation S-X under the Exchange
Act. Except for the capital stock of the Subsidiaries and except as
set forth in the Registration Statement and the Prospectus, the
Company does not own, directly or indirectly, any shares of stock or
any other equity or long-term debt securities or have any equity
interest in any firm, partnership, joint venture or other entity.
(ix) This Agreement and the Terms Agreement have been duly
and validly authorized, executed and delivered by the Company.
(x) Since the date of the latest consolidated financial
statements of the Company and its subsidiaries included in the
Registration Statement and the Prospectus, except as set forth in or
expressly contemplated by the Registration Statement and the
Prospectus, there has not been (A) any change in the Company's issued
capital stock or options, except (I) pursuant to the exercise of
options or the conversion or exchange of outstanding convertible or
exchangeable securities of the Company or any of its subsidiaries,
(II) issuances of shares of Common Stock and options to acquire Common
Stock issued after the date of such financial statements pursuant to
the Company's employee benefit plans as in effect on the date hereof
and (III) issuances after the date of such financial statements of
convertible debentures of the Company and Common Stock pursuant to the
S-4, or (B) any material adverse change in the management, condition
(financial or otherwise), earnings, business affairs or business
prospects of the Company and its subsidiaries, taken as a whole (each,
a "Material Adverse Change," and any event or state of facts which
could, singly or in the aggregate, reasonably be expected to result in
a Material Adverse Change is herein referred to as a "Prospective
Material Adverse Change"), whether or not arising from transactions or
events occurring in the ordinary course of business.
(xi) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as set
forth therein, (A) there have been no transactions or contracts
(written or oral) entered into or agreed to be entered into by the
Company or any of the Subsidiaries (other than those in the ordinary
course of business) which are material to the Company and its
subsidiaries, taken as a whole and (B) there has been no dividend or
distribution of any kind declared, paid or
12
-12-
made by the Company on any class of its capital stock, other than
regularly scheduled quarterly dividends in accordance with the past
practice of the Company.
(xii) If the Prospectus contains a section entitled
"Capitalization," as of the date of the Prospectus Supplement, the
Company has the authorized, issued and outstanding capitalization set
forth in the Prospectus under "Capitalization." The authorized
capital stock of the Company (including, without limitation, the
Common Stock issuable upon conversion or exchange of the Offered
Securities, if applicable) conforms as to legal matters to the
description thereof contained in the Registration Statement and the
Prospectus, and all of the outstanding shares of capital stock of the
Company have been duly authorized and validly issued, are fully paid
and nonassessable and are not subject to any preemptive or similar
rights. The rights agreement dated as of July 18, 1988 between the
Company and Chase Bank of Texas, National Association, formerly known
as Texas Commerce Bank National Association, as rights agent, as
amended to date (the "Rights Agreement"), has been duly authorized,
executed and delivered by the Company; the rights (the "Rights") to
purchase the Company's Series C Junior Participating Preferred Stock
(the "Series C Preferred Stock") outstanding thereunder and, if the
Offered Securities are convertible into shares of Common Stock, to be
issued upon issuance of the Common Stock upon conversion of such
Offered Securities, have been duly authorized; the Series C Preferred
Stock to be issued upon exercise of the Rights has been duly
authorized; and the description of the Rights Agreement and the Rights
set forth in the Registration Statement and the Prospectus is accurate
in all material respects.
(xiii) All corporate action required to be taken for the
authorization, issuance and sale of the Offered Securities pursuant to
this Agreement and the Terms Agreement has been validly and
sufficiently taken. The Offered Securities, when executed by the
Company and authenticated by the applicable Trustee in accordance with
the terms of the applicable Indenture (assuming the due authorization,
execution and delivery of such Indenture by the Trustee thereunder),
and delivered to and paid for by the Underwriters in accordance with
the terms of this Agreement and the Terms Agreement and the applicable
Indenture (assuming the due authorization, execution and delivery
thereof by the Trustee thereunder), will constitute the valid and
binding obligations of the Company entitled to the benefits
13
-13-
of the applicable Indenture and enforceable against the Company in
accordance with their terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally and subject to general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law). The Company has all the requisite
corporate power and authority to execute and deliver the applicable
Indenture and any supplemental indenture to such Indenture relating to
the Offered Securities (the "Supplemental Indenture") and to incur and
perform its obligations provided for therein. Each of the Indenture
and the Supplemental Indenture relating to the Offered Securities,
when executed by the Company and the Trustee thereunder (assuming the
due authorization, execution and delivery of such Indenture and
Supplemental Indenture by the Trustee thereunder), will constitute the
valid and binding obligations of the Company enforceable against the
Company in accordance with their terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally and subject to
general principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law). If the Offered
Securities are convertible into Common Stock, the Offered Securities
are convertible into Common Stock in accordance with their terms and
the terms of the applicable Supplemental Indenture relating to the
Offered Securities.
(xiv) If the Offered Securities are convertible into Common
Stock, the Common Stock issuable upon conversion of the Offered
Securities pursuant to the terms of the Supplemental Indenture has
been duly authorized and validly reserved for issuance upon such
conversion by all necessary corporate action and such Common Stock,
when duly issued upon such conversion will be validly issued and fully
paid and nonassessable; no holder thereof will be subject to personal
liability solely by reason of being such a holder; and the issuance of
such Common Stock upon such conversion will not be subject to
preemptive rights.
(xv) The Offered Securities and the Indenture and
Supplemental Indenture relating thereto conform in all material
respects to the descriptions thereof in the Prospectus.
14
-14-
(xvi) The execution and delivery by the Company of, and the
full and timely performance by the Company of its obligations under,
this Agreement and the Terms Agreement, the Indenture relating to the
Offered Securities, the Supplemental Indenture relating to the Offered
Securities and the Offered Securities, the compliance by the Company
with the terms thereof, and the consummation of each of the
transactions contemplated herein and therein, (A) have been duly
authorized by all necessary corporate action on the part of the
Company, (B) do not and will not result in any violation of the
articles of incorporation or by-laws of the Company and (C) do not and
will not conflict with, or result in a breach or violation of, any of
the terms or provisions of, or constitute a default (or an event
which, with notice or lapse of time, or both, would constitute a
default) under, or give rise to any right to accelerate the maturity
or require the prepayment of any indebtedness under, or result in the
creation or imposition of any lien, charge or encumbrance upon any
material property or assets of the Company or of any Subsidiary under
(I) any indenture, mortgage, loan agreement, note, lease, license,
partnership agreement, franchise agreement or other agreement or
instrument to which the Company or any Subsidiary is a party or by
which any of them may be bound or affected or to which any of their
respective properties or assets may be subject (each, a "Contract" and
collectively, the "Contracts"), other than any such conflict, breach,
default, acceleration, prepayment, lien, charge or encumbrance that,
could not individually or in the aggregate, reasonably be expected to
result in any Material Adverse Effect, (II) any existing applicable
law, rule or regulation (other than the securities or Blue Sky laws of
the various states and other jurisdictions of the United States of
America) or (III) any judgment, order or decree of any government,
governmental instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any Subsidiary or any of their
respective properties or assets.
(xvii) No authorization, approval, consent or license of, or
filing with, any government, governmental instrumentality or court,
domestic or foreign (other than as have been made and obtained and are
in full force and effect under the Securities Act and the Trust
Indenture Act or as may be required under the securities or Blue Sky
laws of the various states and other jurisdictions of the United
States of America) is required for the valid authorization, issuance,
sale and delivery of the Offered Securities by the Company, the
execution and delivery by the Company of, or the full and timely
performance by the
15
-15-
Company of each of its obligations under, this Agreement, the Terms
Agreement, the Indenture relating to the Offered Securities, the
Supplemental Indenture relating to the Offered Securities, and the
compliance by the Company with its obligations thereunder.
(xviii) There are no contracts or other documents that are
required to be described in the Registration Statement or the
Prospectus or to be filed or incorporated by reference as exhibits to
the Registration Statement that are not described, filed or
incorporated as required.
(xix) No holder of any securities of the Company has any
rights, not effectively satisfied or waived, to require the Company to
register the sale of any securities under the Securities Act in
connection with the filing of the Registration Statement or the
consummation of the transactions contemplated therein or pursuant to
this Agreement or the Terms Agreement.
(xx) The Company and its subsidiaries are in compliance
with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health, or the
environment or imposing liability or standards of conduct concerning
Hazardous Material (collectively, "Environmental Laws"), except where
such noncompliance with Environmental Laws could not, singly or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
The term "Hazardous Material" means (i) any "hazardous substance" as
defined by the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, (ii) any "hazardous waste" as
defined by the Resource Conservation and Recovery Act, as amended,
(iii) any petroleum or petroleum product, (iv) any polychlorinated
biphenyl and (v) any pollutant or contaminant or hazardous, dangerous,
or toxic chemical, material, waste or substance regulated under or
within the meaning of any other Environmental Law.
(xxi) Each of the Company and each of its subsidiaries
owns, possesses or has obtained all licenses, ermits, certificates,
consents, orders, approvals and other authorizations from, and has
made all declarations and filings with, all federal, state, local and
other governmental authorities (including foreign regulatory
agencies), all self-regulatory organizations and all courts and other
tribunals, domestic or foreign, necessary to own or lease, as the case
may be, and to operate its properties
16
-16-
and to carry on its business as conducted as of the date hereof,
except in each case where the failure to obtain licenses, permits,
certificates, consents, orders, approvals and other authorizations, or
to make all declarations and filings, could not, singly or in the
aggregate, reasonably be expected to have a Material Adverse Effect,
and neither the Company nor any such subsidiary has received any
notice of any proceeding relating to revocation or modification of any
such license, permit, certificate, consent, order, approval or other
authorization, except as described in the Registration Statement and
the Prospectus and except, in each case, where such revocation or
modification could not, reasonably be expected to singly or in the
aggregate, have a Material Adverse Effect; and the Company and each of
its subsidiaries are in compliance with all laws and regulations
relating to the conduct of their respective businesses as conducted as
set forth in the Registration Statement and the Prospectus, except
where noncompliance with such laws or regulations could not, singly or
in the aggregate, reasonably be expected to have a Material Adverse
Effect.
(xxii) To the best knowledge of the Company, each of the
Company and each of its subsidiaries owns or possesses the patents,
patent licenses, trademarks, service marks, trade names, copyrights
and know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures) (collectively, the "Intellectual Property") reasonably
necessary to carry on the business conducted by each as conducted on
the date hereof, except to the extent that the failure to own or
possess such Intellectual Property could not, singly or in the
aggregate, reasonably be expected to have a Material Adverse Effect,
and, except as set forth in the Registration Statement and the
Prospectus, neither the Company nor any Subsidiary has received any
notice of infringement of or conflict with asserted rights of others
with respect to any Intellectual Property, except for notices the
content of which if accurate could not, singly or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(xxiii) Except as set forth in the Registration Statement and
the Prospectus, no authorization, approval or consent of any
governmental authority or agency is required (other than those which
have already been obtained) under the laws of any jurisdiction in
which the Company or any of the Subsidiaries conduct their respective
businesses
17
-17-
in connection with the ownership by the Company of capital stock of
any Subsidiary, any foreign exchange controls or the repatriation of
any amount from or to the Company and the Subsidiaries, except to the
extent such authorizations, approvals or consents have been obtained
and are in full force and effect and except to the extent that the
failure to obtain such authorization, approval or consent could not,
singly or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(xxiv) The Company has not taken and will not take, directly
or indirectly, any action designed to, or that might be reasonably
expected to, cause or result in stabilization or manipulation of the
price of the Offered Securities (or the Common Stock, if applicable),
and the Company has not distributed and will not distribute any
prospectus or other offering material in connection with the offering
and sale of the Offered Securities other than any preliminary
prospectus filed with the Commission or the Prospectus or other
materials permitted under the Securities Act.
(xxv) Except as set forth in the Registration Statement and
the Prospectus, there is no action, suit or proceeding before or by
any government, governmental or regulatory instrumentality, agency or
body or court, domestic or foreign, or any arbitrator, now pending or,
to the best knowledge of the Company, threatened, against or affecting
the Company or any subsidiary of the Company or any affiliate of the
Company that, singly or in the aggregate with all such actions, suits
and proceedings (i) could reasonably be expected to have a Material
Adverse Effect or could reasonably be expected to have a material
adverse effect on the consummation of the transactions contemplated by
this Agreement and the Terms Agreement or (ii) is required to be
described in the Registration Statement or the Prospectus that is not
so described.
(xxvi) Neither the Company nor any subsidiary of the Company
(i) is in violation of its articles of incorporation, by-laws or other
organizational documents or (ii) is or with the giving of notice or
lapse of time or both would be in violation of, or in breach of or in
default under or in the performance or observance of, any obligation,
agreement, covenant or condition contained in this Agreement, the
Terms Agreement or any Contract or of any permit, order, decree,
judgment, statute, rule or regulation, foreign or domestic, applicable
to the Company or
18
-18-
any Subsidiary, except for such violations, breaches or defaults that,
could not singly or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
(xxvii) The Company is not an "investment company" or an
entity "controlled" by an "investment company" as such terms are
defined in the Investment Company Act of 1940, as amended or a holding
company or a subsidiary of a holding company under the Public Utility
Holding Company Act of 1935.
(xxviii) The Company has complied with all provisions
of Section 517.075, Florida Statutes (Chapter 92-1933 8, Laws of
Florida).
(xxix) The statistical and market-related data included or
incorporated by reference in the Registration Statement and the
Prospectus are based on or derived from sources which the Company
believes to be reliable and accurate or represent the Company's good
faith estimates that are made on the basis of data derived from such
sources.
(xxx) The Company knows of no outstanding claims for
services, either in the nature of a finder's fee or origination fee,
with respect to the transactions contemplated hereby and by the Terms
Agreement, other than the underwriting fees and compensation to be
paid to the Underwriters in accordance with this Agreement.
(xxxi) No labor disputes exist with employees of the Company
or of the Subsidiaries that could, singly or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
Any certificate signed by any officer of the Company and
delivered to the Underwriters or to counsel for the Underwriters shall be
deemed a representation and warranty by the Company to each Underwriter as to
the matters covered thereby.
5. Agreements of the Company. The Company covenants and
agrees with each Underwriter as follows:
(a) To use its reasonable best efforts to cause any
amendment to the Registration Statement to become effective at the
earliest possible time.
(b) To furnish to each of the Representatives, without
charge, as many signed copies of the Registration
19
-19-
Statement (as originally filed) and each amendment thereto and each
document incorporated or deemed incorporated therein, in each case
including exhibits filed therewith or incorporated therein, as the
Representatives may reasonably request, and to each other Underwriter
a conformed copy of the Registration Statement (as originally filed)
and each amendment thereto, in each case without exhibits and, during
the period mentioned in paragraph (e) below, to each of the
Underwriters as many copies of the Prospectus (including all
amendments and supplements thereto and documents incorporated by
reference therein) as the Representatives may reasonably request.
(c) To give the Underwriters prompt notice of the
Company's intention to file or prepare any amendment to the
Registration Statement or any amendment or supplement to the
Prospectus, whether pursuant to the Securities Act, the Exchange Act
or otherwise, to furnish the Underwriters and their counsel with
copies of any such amendment or supplement a reasonable amount of time
prior to such proposed filing or use, as the case may be, and not to
file any such amendment or supplement or use any such prospectus to
which the Underwriters or counsel for the Underwriters shall object.
Subject to the foregoing sentence, the Company will cause each
Prospectus Supplement relating to the Offered Securities to be filed
with the Commission pursuant to the applicable paragraph of Rule 424
under the Securities Act within the time period prescribed and will
provide evidence satisfactory to the Underwriters of such timely
filing.
(d) To advise the Representatives and their counsel
promptly, and to confirm such advice in writing, (i) when any
Prospectus Supplement relating to the Offered Securities shall have
been filed with the Commission pursuant to Rule 424 under the
Securities Act, (ii) when, prior to the termination of the offering of
the Offered Securities, any amendment to the Registration Statement
shall have been filed with the Commission or become effective, (iii)
of the receipt of any comments from the Commission or of any request
by the Commission for any amendment to the Registration Statement or
any amendment or supplement to the Prospectus or for any additional
information, (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of any
order preventing or suspending the use of any Prospectus or Prospectus
Supplement or the initiation or threatening of any proceeding for that
purpose and (v) of the receipt
20
-20-
by the Company of any notification with respect to any suspension of
the qualification of the Offered Securities for offer and sale in any
jurisdiction or the initiation of any proceeding for such purpose; and
to use its reasonable best efforts to prevent the issuance of any such
stop order or notification and, if issued, to obtain as soon as
possible the withdrawal thereof.
(e) If, during such period after the first date of the
public offering of the Offered Securities as in the opinion of the
Underwriters' counsel a prospectus relating to the Offered Securities
is required by law to be delivered in connection with sales by an
Underwriter or dealer, any event shall occur, information shall become
known or condition exist as a result of which it is necessary or
advisable to amend or supplement the Prospectus in order to make the
statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, or if it is
necessary or advisable to amend or supplement the Prospectus to comply
with law, forthwith, at the sole expense of the Company, to prepare,
and, subject to Section 5(c) above, file with the Commission and
furnish, without charge, to the Underwriters and to the dealers (whose
names and addresses the Representatives will furnish to the Company)
to which Offered Securities may have been sold by the Representatives
on behalf of the Underwriters and to any other dealers, upon request,
such amendments or supplements to the Prospectus as may be necessary
so that the statements in the Prospectus as so amended or supplemented
will not, in the light of the circumstances when the Prospectus is
delivered to a purchaser, be misleading or so that the Prospectus will
comply with law.
(f) To endeavor to qualify the Offered Securities (and,
if applicable, the Common Stock) for offer and sale under the
securities or Blue Sky laws of such jurisdictions as the
Representatives shall request and to continue such qualification in
effect so long as required for distribution of the Offered Securities
and to pay all fees and expenses (including fees and disbursements of
counsel to the Underwriters) incurred in connection with such
qualification; provided, however, that the Company shall not be
required to file a general consent to service of process in any
jurisdiction or subject itself to general taxation in any
jurisdiction.
21
-21-
(g) To make generally available to its security holders
and to the Representatives as soon as practicable, but not later than
15 months after the date of each Terms Agreement, an earnings
statement, covering a period of at least 12 months beginning after the
later of (i) the effective date of the Registration Statement, (ii)
the effective date of the most recent post-effective amendment to the
Registration Statement to become effective prior to the date of such
Terms Agreement and (iii) the date of the Company's most recent Annual
Report on Form 10-K filed with the Commission prior to the date of
such Terms Agreement, which will satisfy the provisions of Rule 158
under the Securities Act and Section 11(a) of the Securities Act.
(h) For a period of 90 days after the Representation
Date, without the prior written consent of the Representative
designated in the Terms Agreement, not to, and not cause or permit any
subsidiary of the Company to, directly or indirectly, effect any
offer, sale or other disposition of, or registration of, any Debt
Securities or any other long term debt, notes or debentures of or
guaranteed by the Company or any of its subsidiaries or any securities
convertible into or exchangeable or exercisable for Debt Securities or
any such long-term debt, notes or debentures, other than the Offered
Securities to be sold pursuant to the Terms Agreement and other than
pursuant to such other exceptions, if any, as are agreed to by the
Representatives and set forth in the Terms Agreement. If the Offered
Securities are convertible into Common Stock, during a period of 90
days from the Representation Date, the Company will not, without the
prior written consent of the Representative designated in the Terms
Agreement, directly or indirectly, effect any offer, sale or other
disposition of, or registration of, shares of Common Stock or any
right to purchase or other security convertible into or exchangeable
or exercisable for or any securities of the Company substantially
similar to any such shares, other than (A) the Offered Securities to
be sold pursuant to the Terms Agreement, (B) shares of Common Stock
issued upon conversion, exercise or exchange of convertible,
exchangeable or exercisable securities of the Company or of any
subsidiary of the Company outstanding on the Representation Date and
(C) shares of Common Stock and options thereunder issued pursuant to
employee benefit plans of the Company in place on the Representation
Date as in effect on the Representation Date, and other than pursuant
22
-22-
to such other exceptions, if any, as are agreed to by the
Representatives and set forth in the Terms Agreement.
(i) Whether or not the transactions contemplated hereby
or by the Terms Agreement are consummated or this Agreement is
terminated or shall not become effective, to pay all costs and
expenses incident or relating to the performance of the Company's
obligations hereunder, including, without limiting the generality of
the foregoing, all costs and expenses (i) incurred in connection with
the preparation, issuance, execution and delivery of the Offered
Securities (including, if applicable, the Common Stock issuable upon
conversion thereof), (ii) incurred in connection with the preparation,
printing and filing under the Securities Act and the Exchange Act of
the Registration Statement, the Prospectus, any preliminary prospectus
and each Prospectus Supplement (including in each case all exhibits,
amendments and supplements thereto and all documents incorporated
therein by reference), (iii) incurred in connection with the
registration or qualification of the Offered Securities (including, if
applicable, the Common Stock issuable upon conversion or exchange
thereof) under the laws of such jurisdictions as the Representatives
may request (including filing fees and the fees of counsel for the
Underwriters and their disbursements), (iv) relating to any filing
with the National Association of Securities Dealers, Inc. (the "NASD")
in connection with the offering of the Offered Securities, (v)
incurred in connection with the engagement of any qualified
independent underwriter as may be required by NASD rules and
regulations, (vi) incurred in connection with the rating of the
Offered Securities, (vii) incurred in connection with advertising
relating to the Offered Securities approved by the Company (which
approval shall not be unreasonably withheld or delayed), (viii)
relating to the fees and expenses of the applicable Trustee, including
the fees and expenses of counsel to the applicable Trustee, and of the
transfer agent and registrar for the Common Stock if the Offered
Securities are convertible into the Common Stock and (ix) relating to
or in connection with the printing (including word processing and
duplication costs) and delivery of this Agreement, the Terms
Agreement, the Indenture relating to the Offered Securities, any
Supplemental Indenture relating thereto, the agreement among
underwriters, each other document or instrument relating to the
underwriting arrangements and the coordination of the offering of the
Offered Securities by the U.S. Underwriters and the International
Managers, if applicable, any
23
-23-
dealer agreements, the Preliminary and Supplemental Blue Sky Memoranda
and the furnishing to the Underwriters and dealers of copies of the
Registration Statement, the Prospectus and each Prospectus Supplement,
including mailing and shipping, as herein provided.
(j) To furnish to the Representatives for a period of
five years after the Representation Date copies of all reports or
other communications (financial or other) furnished to holders of the
Company's capital stock, and copies of any reports and financial
statements furnished to or filed with the Commission.
(k) To use the net proceeds of the offering of the
Offered Securities as set forth in the Prospectus Supplement under the
caption "Use of Proceeds."
(l) During the period when the Prospectus is required to
be delivered under the Securities Act or the Exchange Act in
connection with sales (including resales) of the Offered Securities,
to file all documents required to be filed with the Commission
pursuant to Section 13, 14 or 15 of the Exchange Act within the time
period required by the Exchange Act and the Exchange Act Regulations.
(m) If the Offered Securities are convertible into Common
Stock, the Company will use its best efforts to effect the listing of
the shares of Common Stock issuable upon conversion of the Offered
Securities on the New York Stock Exchange on the Representation Date.
(n) To reserve and keep available at all times, free of
preemptive rights, sufficient shares of Common Stock to satisfy any
obligations to issue shares of Common Stock upon conversion of all of
the Offered Securities that are convertible into the Common Stock.
(o) To deliver copies of the Prospectus to such place or
places as shall be designated by the Representatives not later than
1:00 p.m., New York City time, on the day after the date of the Terms
Agreement.
6. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters hereunder to purchase the Underwritten
Securities are subject to the following conditions:
24
-24-
(a) If any amendment to the Registration Statement filed
prior to the Closing Date has not been declared effective as of the
Representation Date, such amendment shall have become effective not
later than 5:30 P.M., New York City time, on the Representation Date;
and at the Closing Date no stop order suspending the effectiveness of
the Registration Statement shall have been issued under the Securities
Act or proceedings therefor initiated or threatened by the Commission.
The price of the Offered Securities and any price-related information
previously omitted from the effective Registration Statement and the
Prospectus Supplement shall have been transmitted to the Commission
for filing pursuant to Rule 424 under the Securities Act within the
prescribed time period and prior to the Closing Date the Company shall
have provided to the Representatives evidence satisfactory to the
Representatives of such timely filing.
(b) The representations and warranties of the Company
contained herein and in the Terms Agreement shall be true and correct
on and as of the Closing Date as if made on and as of the Closing Date
and the Company shall have complied with all agreements and satisfied
all conditions on its part to be performed or satisfied hereunder at
or prior to the Closing Date.
(c) Subsequent to the Representation Date and prior to
payment for the Underwritten Securities on the Closing Date, there
shall not have occurred or become known any Material Adverse Change or
any development involving a Prospective Material Adverse Change other
than as set forth in the Registration Statement and the Prospectus,
the effect of which in the judgment of the Representatives makes it
impracticable or inadvisable to proceed with the public offering or
the delivery of the Underwritten Securities on the terms and in the
manner contemplated in the Registration Statement and the Prospectus.
As used in this Section 6(c), "Prospectus" shall mean the Prospectus
first used to confirm sales of the Offered Securities exclusive of any
amendment or supplement thereto thereafter.
(d) The Representatives shall have received on and as of
the Closing Date a certificate of the Company signed by the Chief
Executive Officer, the Chief Operating Officer or the Chief Financial
Officer or Treasurer of the Company to the effect set forth in
subsections (a) and (b) of this Section 6 and to the further effect
that since the most recent date as of which information is given in
the
25
-25-
Prospectus to the Closing Date there shall not have occurred any
Material Adverse Change, or any development involving a Prospective
Material Adverse Change. As used in this Section 6(d), "Prospectus"
shall mean the Prospectus first used to confirm sales of the Offered
Securities exclusive of any amendment or supplement thereto
thereafter.
(e) The Representatives shall have received on the
Closing Date a signed opinion of Liddell, Sapp, Zivley, Hill & XxXxxx,
L.L.P ("LSZHL"), special counsel for the Company, addressed to the
Underwriters and dated the Closing Date and satisfactory to counsel
for the Underwriters, to the effect that:
(i) The Company has been duly incorporated, is
validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation and has the
corporate power and authority to own its property and to
conduct its business as described in the Prospectus.
(ii) Each of this Agreement and the Terms
Agreement has been duly authorized, executed and delivered by
the Company.
(iii) The Company has the requisite corporate power
and authority to execute, deliver and perform its obligations
under the Indenture relating to the Offered Securities, and
such Indenture has been duly authorized, executed and
delivered by the Company and has been duly qualified under the
Trust Indenture Act and (assuming the due authorization,
execution and delivery by the Trustee thereunder) constitutes
a valid and legally binding instrument of the Company,
enforceable against the Company in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization,
moratorium and similar laws affecting creditors' rights and
remedies generally and subject to the effect of general
principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law) and the discretion
of the court before which any proceeding therefor may be
brought.
(iv) The Company has the requisite corporate power
and authority to issue and deliver the Offered Securities, and
the Offered Securities have been duly authorized by the
Company for issuance. The Offered
26
-26-
Securities, when executed by the Company and authenticated by
the Trustee in accordance with the Indenture relating to the
Offered Securities (assuming the due authorization, execution
and delivery of the Indenture by the Trustee thereunder) and
delivered to and paid for by the Underwriters in accordance
with the terms of this Agreement and the Terms Agreement will
constitute valid and legally binding obligations of the
Company entitled to the benefits of the Indenture and
enforceable against the Company in accordance with their
terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or transfer
and similar laws affecting creditors' rights and remedies
generally and subject, as to enforceability, to general
principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law) and the discretion
of the court before which any proceeding therefor may be
brought.
(v) The Company has the requisite corporate power
and authority to execute, deliver and perform its obligations
under the Supplemental Indenture (if applicable) relating to
the Offered Securities, and the Supplemental Indenture (if
applicable) has been duly authorized, executed and delivered
by the Company and (assuming the due authorization, execution
and delivery by the Trustee under the Indenture relating to
the Offered Securities) constitutes a valid and legally
binding instrument of the Company, enforceable against the
Company in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or transfer and similar laws affecting creditors'
rights and remedies generally and subject, as to
enforceability, to general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at
law) and the discretion of the court before which any
proceeding therefor may be brought.
(vi) The statements set forth or incorporated by
reference in the Registration Statement and the Prospectus
insofar as such statements purport to summarize certain
provisions of the Offered Securities (and the Common Stock, if
applicable), the Indenture and the Supplemental Indenture
provide a fair summary of such provisions.
27
-27-
(vii) The statements set forth in the Registration
Statement and the Prospectus under the caption "Certain United
States Federal Income Tax Considerations," insofar as such
statements constitute summaries of legal matters, are fair and
accurate in all material respects.
(viii) If the Prospectus contains a section entitled
"Capitalization", the number of authorized shares of capital
stock of the Company is as set forth in the Prospectus under
"Capitalization". The authorized capital stock of the Company
conforms as to legal matters in all material respects to the
description thereof contained in the Prospectus.
(ix) If the Offered Securities are convertible
into Common Stock, upon issuance and delivery of the Offered
Securities, the Offered Securities shall be convertible at the
option of the holder thereof into Common Stock in accordance
with the terms of the Offered Securities and the Supplemental
Indenture (if applicable) relating thereto; the Common Stock
issuable upon conversion of the Offered Securities have been
duly authorized and validly reserved for issuance upon such
conversion by all necessary corporate action, and such Common
Stock, when issued upon such conversion, will be validly
issued, fully paid and nonassessable; no holder of the Common
Stock will be subject to personal liability solely by reason
of being such a holder; and the issuance of such shares upon
such conversion will not be subject to preemptive rights
arising by operation of law or under the charter or by-laws of
the Company.
(x) At the time the Registration Statement and
each amendment thereto became effective and at the
Representation Date, the Registration Statement and the
Prospectus (other than the Form T-1 and the financial
statements and schedules and other financial and statistical
data included or incorporated by reference therein, as to
which such counsel need express no opinion) appear on their
face to be appropriately responsive to the applicable
requirements of the Securities Act. The applicable Indenture,
as amended by the Supplemental Indenture, complies with the
requirements of the Trust Indenture Act.
28
-28-
(xi) Such counsel does not know of any legal or
governmental actions, suits or proceedings, pending or
threatened, required to be disclosed in the Registration
Statement which are not disclosed therein as required
(provided that for such purpose such counsel need not regard
any action, suit or proceeding to be "threatened" unless the
potential litigant has manifested to the management of the
Company or to such counsel a present intention to initiate
such suit or proceeding).
(xii) Based upon such counsel's review of
applicable law, no authorization, approval, consent or order
of any court or governmental or regulatory authority, body or
agency or third party is required in connection with (A) the
offering, issuance or sale of the Offered Securities or, if
applicable, the valid authorization, issuance and delivery of
the Common Stock issuable upon conversion of the Offered
Securities, or (B) the execution, delivery or full and timely
performance of this Agreement, the Terms Agreement, the
Indenture, the Supplemental Indenture (if applicable) or the
Offered Securities by the Company, except such as may be
required under the Securities Act, the Trust Indenture Act or
state securities laws.
(xiii) To the best of such counsel's knowledge and
information, after due inquiry, the execution, delivery and
the full and timely performance of this Agreement, the Terms
Agreement, the Indenture and the Supplemental Indenture (if
applicable) and the Offered Securities and the consummation of
the transactions contemplated herein (including the issuance,
sale and delivery of the Offered Securities and, if
applicable, the issuance of the Common Stock upon conversion
of the Offered Securities), will not constitute a breach of,
or default under (including, without limitation, any event
which with notice or lapse of time, or both, would constitute
a breach of or a default under), or result in the creation or
imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of the Subsidiaries
pursuant to, any contract identified on a schedule to such
opinion (the scope of which list of contracts being reasonably
acceptable to the Representatives), nor will such action
result in any violation of the provisions of the charter or
by-laws of
29
-29-
the Company, or any applicable law, rule, regulation or
administrative, regulatory or court judgment, order or decree,
except for any breach, default, lien, charge or encumbrance
under any such contract as could not, singly or in the
aggregate, reasonably be expected to have a Material Adverse
Effect.
(xiv) Each document filed pursuant to the Exchange
Act (other than the financial statements, schedules and other
financial and statistical data included therein, as to which
such counsel need express no opinion) and incorporated or
deemed to be incorporated by reference in the Prospectus
appears on its face to be appropriately responsive to the
applicable requirements of the Exchange Act.
(xv) The Company is not an investment company
under the Investment Company Act of 1940, nor a holding
company or a subsidiary of a holding company under the Public
Utility Holding Company Act of 1935.
Such counsel shall also state that they have been advised by
the Commission that the Indenture has been qualified under the Trust
Indenture Act and that the Registration Statement became effective
under the Securities Act; that any required filings of the Prospectus
pursuant to Rule 424(b) have been made in the manner and within the
time period required by Rule 424(b); and that, based solely on
conversations with the Commission, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted, are pending or, to
such counsel's knowledge, are contemplated under the Securities Act.
In addition, such counsel shall also include a statement to
the effect that nothing has come to the attention of such counsel
which leads such counsel to believe that (1) the Registration
Statement (other than the financial statements and schedules and other
financial and statistical data included or incorporated by reference
therein, as to which such counsel need not make any statement or
express any opinion), when it became effective and at the
Representation Date contained and, as of the date such opinion is
delivered, contains any untrue statement of a material fact or omitted
or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading and (2) the
Prospectus (other than the financial statements and schedules and
30
-30-
other financial and statistical data included or incorporated by
reference therein, as to which such counsel need not make any
statement or express any opinion) as of its date or at the
Representation Date contained and, as of the date such opinion is
delivered, contains any untrue statement of a material fact or omitted
or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
Such counsel in rendering such opinion may rely as to certain
matters of fact on certificates of officers of the Company and of
public officials; provided, however, that (a) such counsel shall state
that such counsel, the Underwriters and counsel for the Underwriters
are justified in relying upon such certificates and (b) such
certificates shall have been delivered to the Representatives prior to
the Closing Date. In rendering such opinion, such counsel may rely as
to matters involving the application of laws of any jurisdiction other
than the State of Texas or the United States or the General
Corporation Law of the State of Delaware, to the extent they deem
proper and specified in such opinion, upon the opinion of other
counsel who are reasonably satisfactory to counsel for the
Underwriters; provided, however, that LSZHL shall state that LSZHL,
the Underwriters and counsel for the Underwriters are justified in
relying upon such opinion. In addition, such counsel may assume for
purposes of such opinion that the laws of the State of New York are
identical to the laws of the State of Texas.
(f) The Representatives shall have received on the
Closing Date a signed opinion of Xxxxx X. Shelger, General Counsel of
the Company, addressed to the Underwriters and dated the Closing Date
and satisfactory to counsel for the Underwriters, to the effect that:
(i) The Company has been duly incorporated, is
validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its property and to
conduct its business as described in the Prospectus and to the
best of such counsel's knowledge and information, after due
inquiry, is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such
qualification, except to the extent that
31
-31-
the failure to be so qualified or be in good standing could
not, singly or in the aggregate, reasonably be expected to
have a Material Adverse Effect.
(ii) Each Subsidiary has been duly incorporated,
is validly existing as a corporation in good standing under
the laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its property and to
conduct its business as described in the Prospectus and is
duly qualified to transact business and is in good standing in
each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be
in good standing could not, singly or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(iii) Each of this Agreement and the Terms
Agreement has been duly authorized, executed and delivered by
the Company.
(iv) The Company has the requisite corporate power
and authority to execute, deliver and perform its obligations
under the Indenture relating to the Offered Securities, and
such Indenture has been duly authorized, executed and
delivered by the Company and has been duly qualified under the
Trust Indenture Act and (assuming the due authorization,
execution and delivery by the Trustee thereunder) constitutes
a valid and legally binding instrument of the Company,
enforceable against the Company in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization,
moratorium and similar laws affecting creditors' rights and
remedies generally and subject to the effect of general
principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law) and the discretion
of the court before which any proceeding therefor may be
brought.
(v) The Company has the requisite corporate power
and authority to issue and deliver the Offered Securities, and
the Offered Securities have been duly authorized by the
Company for issuance. The Offered Securities, when executed
by the Company and authenticated by the Trustee in accordance
with the Indenture relating to the Offered Securities
(assuming the
32
-32-
due authorization, execution and delivery of the Indenture by
the Trustee thereunder) and delivered to and paid for by the
Underwriters in accordance with the terms of this Agreement
and the Terms Agreement will constitute valid and legally
binding obligations of the Company entitled to the benefits of
the Indenture and enforceable against the Company in
accordance with their terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance
or transfer and similar laws affecting creditors' rights and
remedies generally and subject, as to enforceability, to
general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law) and
the discretion of the court before which any proceeding
therefor may be brought.
(vi) The Company has the requisite corporate power
and authority to execute, deliver and perform its obligations
under the Supplemental Indenture (if applicable) relating to
the Offered Securities, and the Supplemental Indenture (if
applicable) has been duly authorized, executed and delivered
by the Company and (assuming the due authorization, execution
and delivery by the Trustee under the Indenture relating to
the Offered Securities) constitutes a valid and legally
binding instrument of the Company, enforceable against the
Company in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or transfer and similar laws affecting creditors'
rights and remedies generally and subject, as to
enforceability, to general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at
law) and the discretion of the court before which any
proceeding therefor may be brought.
(vii) The statements set forth or incorporated by
reference in the Registration Statement and the Prospectus
insofar as such statements purport to summarize certain
provisions of the Offered Securities (and the Common Stock, if
applicable), the Indenture and the Supplemental Indenture
provide a fair summary of such provisions.
(viii) If the Prospectus contains a section entitled
"Capitalization", the number of authorized shares of capital
stock of the Company is as set
33
-33-
forth in the Prospectus under "Capitalization". The
authorized capital stock of the Company conforms as to legal
matters in all material respects to the description thereof
contained in the Prospectus.
(ix) If the Offered Securities are convertible
into Common Stock, upon issuance and delivery of the Offered
Securities, the Offered Securities shall be convertible at the
option of the holder thereof into Common Stock in accordance
with the terms of the Offered Securities and the Supplemental
Indenture (if applicable) relating thereto; the Common Stock
issuable upon conversion of the Offered Securities have been
duly authorized and validly reserved for issuance upon such
conversion by all necessary corporate action, and such Common
Stock, when issued upon such conversion, will be validly
issued, fully paid and nonassessable; no holder of the Common
Stock will be subject to personal liability solely by reason
of being such a holder; and the issuance of such shares upon
such conversion will not be subject to preemptive rights
arising by operation of law or under the charter or by-laws of
the Company.
(x) All of the issued and outstanding capital
stock of each Subsidiary has been duly authorized and validly
issued, is fully paid and nonassessable and, to the best of
such counsel's knowledge and information, after due inquiry,
except as set forth in the Registration Statement and the
Prospectus, is owned by the Company, directly or indirectly,
free and clear of any perfected security interest, and, to the
best of such counsel's knowledge and information, after due
inquiry, any other security interests or claims.
(xi) Such counsel does not know of any legal or
governmental actions, suits or proceedings, pending or
threatened, required to be disclosed in the Registration
Statement which are not disclosed therein as required
(provided that for such purpose such counsel need not regard
any action, suit or proceeding to be "threatened" unless the
potential litigant has manifested to the management of the
Company or to such counsel a present intention to initiate
such suit or proceeding).
34
-34-
(xii) To the best of such counsel's knowledge and
information, after due inquiry, there are no Contracts or
other instruments required to be described or referred to in
the Registration Statement or to be filed as exhibits thereto
other than those described or referred to therein or filed or
incorporated by reference as exhibits thereto.
(xiii) Based upon such counsel's review of
applicable law, no authorization, approval, consent or order
of any court or governmental or regulatory authority, body or
agency or third party is required in connection with (A) the
offering, issuance or sale of the Offered Securities or, if
applicable, the valid authorization, issuance and delivery of
the Common Stock issuable upon conversion of the Offered
Securities, or (B) the execution, delivery or full and timely
performance of this Agreement, the Terms Agreement, the
Indenture, the Supplemental Indenture (if applicable) or the
Offered Securities by the Company, except such as may be
required under the Securities Act, the Trust Indenture Act or
state securities laws.
(xiv) To the best of such counsel's knowledge and
information, after due inquiry, the execution, delivery and
the full and timely performance of this Agreement, the Terms
Agreement, the Indenture, the Supplemental Indenture (if
applicable) and the Offered Securities, the consummation of
the transactions contemplated herein (including the issuance,
sale and delivery of the Offered Securities and, if
applicable, the issuance of the Common Stock upon conversion
of the Offered Securities), and compliance by the Company with
its obligations hereunder and thereunder will not conflict
with or constitute a breach of, or default under (including,
without limitation, any event which, with notice or lapse of
time, or both, would constitute a breach of or a default
under), or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the
Company or any of the Subsidiaries pursuant to, any contract
identified on a schedule to such opinion (the scope of which
list of contracts being reasonably acceptable to the
Representatives), nor will such action result in any violation
of the provisions of the charter or by-laws of the Company, or
any applicable law, rule, regulation or administrative,
35
-35-
regulatory or court judgment, order or decree, except for any
breach, default, lien, charge or encumbrance under any such
contract as could not, singly or in the aggregate, reasonably
be expected to have a Material Adverse Effect.
In addition, such counsel shall also include a statement to
the effect that nothing has come to the attention of such counsel
which leads such counsel to believe that (1) the Registration
Statement (other than the financial statements and schedules and other
financial and statistical data included or incorporated by reference
therein, as to which such counsel need not make any statement or
express any opinion), when it became effective and at the
Representation Date contained and, as of the date such opinion is
delivered, contains any untrue statement of a material fact or omitted
on omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading and (2) the
Prospectus (other than the financial statements and schedules and
other financial and statistical data included or incorporated by
reference therein, as to which such counsel need not make any
statement or express any opinion) as of its date or at the
Representation Date contained and, as of the date such opinion is
delivered, contains any untrue statement of a material fact or omitted
or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
Such counsel in rendering such opinion may rely as to certain
matters of fact on certificates of officers of the Company and of
public officials; provided, however, that (a) such counsel shall state
that such counsel, the Underwriters and counsel for the Underwriters
are justified in relying upon such certificates and (b) such
certificates shall have been delivered to the Representatives prior to
the Closing Date. In rendering such opinion, such counsel may rely as
to matters involving the application of laws of (1) the General
Corporation Law of the State of Delaware upon the written opinion of
LSZHL delivered pursuant to clause (e) above of this Section 6 and (2)
any jurisdiction other than the State of Texas or the United States,
to the extent they deem proper and specified in such opinion, upon the
opinion of other counsel who are reasonably satisfactory to counsel
for the Underwriters; provided, however, that Xxxxx X. Shelger shall
state that Xxxxx X. Shelger, the Underwriters and counsel for the
36
-36-
Underwriters are justified in relying upon such opinion. In addition,
such counsel may assume for purposes of such opinion that the laws of
the State of New York are identical to the laws of the State of Texas.
(g) On the Representation Date and also on the Closing
Date, Coopers & Xxxxxxx L.L.P. shall have furnished to the
Representatives signed letters, addressed to the Underwriters and
dated the respective dates of delivery thereof, in form and substance
satisfactory to the Representatives, containing statements and
information of the type customarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain financial information included or incorporated by reference in
the Registration Statement and the Prospectus.
(h) The Representatives shall have received on and as of
the Closing Date a favorable opinion of Xxxxxx Xxxxxx & Xxxxxxx,
counsel to the Underwriters, with respect to the Registration
Statement, the Prospectus and other related matters as the
Representatives may reasonably request, and such counsel shall have
received such papers and information as they may reasonably request to
enable them to pass upon such matters.
(i) If the Offered Securities are convertible into Common
Stock, on the Representation Date, the Common Stock issuable upon
conversion of the Offered Securities shall have been approved for
listing on the New York Stock Exchange upon notice of issuance.
(j) At the Closing Date, counsel for the Underwriters
shall have been furnished with such documents and opinions as they may
require for the purpose of enabling them to pass upon the issuance and
sale of the Offered Securities as herein contemplated and related
proceedings, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company
in connection with the issuance and sale of the Offered Securities
(and, if applicable, the Common Stock) as herein contemplated shall be
satisfactory in form and substance to the Underwriters and counsel for
the Underwriters.
(k) On or prior to the Closing Date the Company shall
have furnished to the Representatives such further certificates and
documents as the Representatives shall reasonably request.
37
-37-
(l) Subsequent to the execution and delivery of the Terms
Agreement and prior to the Closing Date, there shall not have occurred
any downgrading, nor shall any notice have been given of (i) any
intended or potential downgrading or (ii) any review or possible
change that does not indicate an improvement, in the rating accorded
any securities of or guaranteed by the Company by any "nationally
recognized statistical rating organization," as such term is defined
for purposes of Rule 436(g)(2) under the Securities Act.
(m) If the Offered Securities are convertible into Common
Stock, the Company shall have delivered to the Representatives written
agreements, in form and substance satisfactory to the Representative
designated in the Terms Agreement, with each of its executive officers
who owns Common Stock that no offer, sale or other disposition, or
request or demand for registration under the Securities Act or
inclusion in any other registration statement filed by the Company
under the Securities Act, of any Common Stock or other capital stock
of the Company, or warrants, options, convertible, exercisable or
exchangeable securities, or other rights to purchase or acquire,
Common Stock or other capital stock (or any such right or
exchangeable, exercisable or convertible security) owned by such
person, or with respect to which such person has the power of
disposition, will be made for a period of 90 days after the date of
this Agreement, directly or indirectly, by such executive officer,
otherwise than (i) with the prior written consent of the
Representative designated in the Terms Agreement and (ii) pursuant to
such exceptions, if any, as are agreed to by the Representative
designated in the Terms Agreement and set forth in the Terms
Agreement.
(n) There shall not have been any amendment or supplement
to the Registration Statement or the Prospectus to which the
Underwriters shall have objected.
(o) The Company shall have complied with its obligations
under Section 5(o).
The several obligations of the Underwriters designated in the
Terms Agreement to purchase Option Securities hereunder on the Additional
Closing Date are, unless otherwise agreed by the Underwriters designated in the
Terms Agreement,
38
-38-
subject to the conditions set forth in paragraph (a) to and including paragraph
(n) above on and as of the Additional Closing Date (references therein to the
Closing Date shall be deemed references to the Additional Closing Date for this
purpose), except that the certificate called for by paragraph (d), the opinions
called for by paragraphs (e), (f) and (h) and the letters called for by
paragraph (g) shall be dated as of, and delivered on, the Additional Closing
Date, and to the delivery to the Representatives on the Additional Closing Date
of such other documents as they may reasonably request.
7. Indemnification and Contribution. The Company agrees
to indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages and liabilities (including, without limitation the
legal fees and other expenses reasonably incurred in connection with defending
or investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or the Prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) or any preliminary
prospectus, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with information
relating to any Underwriter furnished to the Company in writing by such
Underwriter through the Representatives expressly for use therein; provided,
however, that the foregoing indemnity with respect to any preliminary
prospectus shall not inure to the benefit of any Underwriter (or the benefit of
any person controlling such Underwriter) from whom the person asserting any
such losses, claims, damages or liabilities purchased Offered Securities if
such untrue statement or omission or alleged untrue statement or omission was
made in such preliminary prospectus and is eliminated or remedied in the
Prospectus and the Company has provided such Prospectus in accordance with
Section 5(b) hereof (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) and if it shall be established
in the related action or proceeding that a copy of the Prospectus, if required
by law (as so amended or supplemented, but exclusive of any documents
incorporated therein by reference), shall not have been furnished to such
person at or prior to the written confirmation of the sale of such Offered
Securities to such person, except
39
-39-
to the extent that such Prospectus contains any other untrue statement or
omission or alleged untrue statement or omission of a material fact that was
the subject matter of the related action or proceeding. For purposes of the
proviso to the immediately preceding sentence, the term "Prospectus" shall not
be deemed to include the documents incorporated therein by reference, and no
Underwriter shall be obligated to send or give any supplement or amendment to
any document incorporated by reference in any preliminary prospectus or the
Prospectus to any person.
Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, the directors of the Company, the
officers of the Company who sign the Registration Statement and each person, if
any, who controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or the Prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) or any preliminary
prospectus, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, but only with reference to information relating to such
Underwriter furnished to the Company in writing by such Underwriter through the
Representatives expressly for use in the Registration Statement, the
Prospectus, any amendment or supplement thereto, or any preliminary prospectus.
For purposes of this Section 7 and Section 4(ii), the only written information
furnished by the Underwriters to the Company expressly for use in the
Registration Statement and the Prospectus is the information in the last
paragraph of the cover page of the Prospectus Supplement and the second
paragraph under the table under the caption "Underwriting" in the Prospectus
Supplement.
If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any person in respect of which indemnity may be sought pursuant to any of the
two preceding paragraphs of this Section 7, such person (hereinafter called the
"Indemnified Person") shall promptly notify the person against whom such
indemnity may be sought (hereinafter called the "Indemnifying Person") in
writing, and the Indemnifying,
40
-40-
Person, upon request of the Indemnified Person, shall promptly retain counsel
satisfactory to the Indemnified Person to represent the Indemnified Person in
such proceeding and shall pay the reasonable fees and expenses of such counsel
related to such proceeding. In any such proceeding, any Indemnified Person
shall have the right to retain its own counsel, but the fees and expenses of
such counsel shall be at the expense of such Indemnified Person unless (i) the
Indemnifying Person and the Indemnified Person shall have mutually agreed to
the contrary, (ii) there has been a failure by the Indemnifying Person to
retain promptly counsel reasonably satisfactory to the Indemnified Person or
(iii) the named parties to any such proceeding (including any impleaded
parties) include both the Indemnifying Person and the Indemnified Person and
representation of both parties by the same counsel would be inappropriate due
to actual or potential differing interests between them. It is understood that
the Indemnifying Person shall not, in connection with any proceeding or related
proceeding in the same jurisdiction, be liable for (a) the fees and expenses of
more than one separate firm (in addition to any local counsel) for all
Underwriters and all persons, if any, who control any Underwriter within the
meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act and (b) the fees and expenses of more than one separate firm (in
addition to any local counsel) for the Company, its directors, its officers who
sign the Registration Statement and each person, if any, who controls the
Company within the meaning of either such Section, and that all such fees and
expenses shall be reimbursed as they are incurred. In the case of any such
separate firm for the Underwriters and such control persons of Underwriters,
such firm shall be designated in writing by the Representatives. In the case
of any such separate firm for the Company, and such directors, officers and
control persons of the Company, such firm shall be designated in writing by the
Company. The Indemnifying Person shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the Indemnifying
Person agrees to indemnify any Indemnified Person from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an Indemnified Person shall have requested
an Indemnifying Person to reimburse the Indemnified Person for fees and
expenses of counsel as contemplated by the third sentence of this paragraph,
the Indemnifying Person agrees that it shall be liable for any settlement of
any proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such Indemnifying Person of the
aforesaid request and (ii) such
41
-41-
Indemnifying Person shall not have reimbursed the Indemnified Person in
accordance with such request prior to the date of such settlement; provided,
however, that the Indemnifying Person shall not be liable for any settlement
effected without its consent pursuant to this sentence if the Indemnifying
Person is contesting in good faith the request for reimbursement and all other
fees and expenses of counsel not so contested shall have been reimbursed. No
Indemnifying Person shall, without the prior written consent of the Indemnified
Person, effect any settlement of any pending or threatened proceeding in
respect of which any Indemnified Person is or could have been a party and
indemnity could have been sought hereunder by such Indemnified Person, unless
such settlement (1) includes an unconditional written release of such
Indemnified Person, in form and substance satisfactory to such Indemnified
Person, from all liability on claims that are the subject matter of such
proceeding and (2) does not include any statement as to an admission of fault,
culpability or failure to act by or on behalf of any Indemnified Person.
If the indemnification provided for in the first or second
paragraph of this Section 7 is unavailable to any extent to an Indemnified
Person under such paragraph in respect of any losses, claims, damages or
liabilities referred to therein, then each Indemnifying Person under such
paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall
contribute to the amount paid or payable by such Indemnified Person as a result
of such losses, claims, damages or liabilities as follows: as between the
Company on the one hand and the Underwriters on the other (i) in such
proportion as is appropriate to reflect the aggregate relative benefits
received by the Company and by the Underwriters from the offering of the
Offered Securities or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Company and of the Underwriters in connection with
the statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and by the
Underwriters on the other shall be deemed to be in the same respective
proportions as the net proceeds from the offering (before deducting expenses)
received by the Company and the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on the
cover of the Prospectus bear to the aggregate public offering price of the
Offered Securities. The relative fault of the Company on the one hand and of
the
42
-42-
Underwriters on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to
information supplied by the Company or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Company and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 7 were determined
by pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation that does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an Indemnified Person as a result of
the losses, claims, damages and liabilities referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such
Indemnified Person in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 7, in no event
shall an Underwriter be required to contribute any amount in excess of the
amount by which the total price at which the Offered Securities underwritten by
it and distributed to the public were offered to the public exceeds the amount
of any damages that such Underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute pursuant to this Section 7 are several
in proportion to the respective number of Offered Securities they have
purchased hereunder, and not joint.
The indemnity and contribution agreements contained in this
Section 7 are in addition to any liability which the Indemnifying Persons may
otherwise have to the Indemnified Persons referred to above.
The indemnity and contribution agreements contained in this
Section 7 and the representations and warranties of the Company contained in
this Agreement shall remain operative and in full force and effect regardless
of (i) any termination of this Agreement, (ii) any investigation made by or on
behalf of any Underwriter or any person controlling any Underwriter or the
Company, its officers or directors or any other person controlling the Company
and (iii) acceptance of and payment for any of the Offered Securities.
43
-43-
8. Termination of Agreement. Notwithstanding anything
herein contained, this Agreement (or the obligations of the several Option
Securities Underwriters with respect to the Option Securities) may be
terminated in the absolute discretion of the Representatives, by notice given
to the Company, if after the execution and delivery of this Agreement and prior
to the Closing Date (or, in the case of the Option Securities, prior to the
Additional Closing Date) (i) trading generally shall have been suspended or
materially limited on or by, as the case may be, any of the New York Stock
Exchange, the National Association of Securities Dealers, Inc. or the American
Stock Exchange, (ii) trading of any securities of the Company shall have been
suspended on any exchange or in any over-the-counter market, (iii) a general
moratorium on commercial banking activities in New York shall have been
declared by either U.S. Federal or New York State authorities or exchange
controls shall have been imposed by the United States, or (iv) there shall have
occurred any outbreak or escalation of hostilities or any change in financial
markets or any calamity or crisis that, in the judgment of the Representatives,
is material and adverse and which, in the judgment of the Representatives,
makes it impracticable to market the Offered Securities on the terms and in the
manner contemplated in the Prospectus.
9. Effectiveness of Agreement; Additional Obligations of
the Underwriters. This Agreement shall become effective upon the later of (x)
the Representation Date and (y) release of notification by the Commission of
the effectiveness of the most recent amendment to the Registration Statement
filed prior to the Closing Date.
If, on the Closing Date or the Additional Closing Date, as the
case may be, any one or more of the Underwriters shall fail or refuse to
purchase the aggregate principal amount of Offered Securities which it or they
have agreed to purchase hereunder on such date, and the aggregate principal
amount of Offered Securities which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate principal amount of Offered Securities to be purchased on such date,
the other Underwriters (with respect to the Option Securities, to the extent
such Underwriters are Option Securities Underwriters) shall be obligated
severally in the proportions that (1) with respect to Underwritten Securities,
the aggregate principal amount of Underwritten Securities set forth opposite
their respective names in
44
-44-
the annex or annexes to Exhibit I hereto bears to the aggregate principal
amount of Underwritten Securities set forth opposite the names of all such
non-defaulting Underwriters and (2) with respect to Option Securities, the
aggregate principal amount of Underwritten Securities set forth opposite their
respective names in the annex or annexes to Exhibit I hereto bears to the
aggregate principal amount of Underwritten Securities set forth opposite the
names of all such non-defaulting Underwriters who are Option Securities
Underwriters, or in such other proportions as the Representatives may specify,
to purchase the aggregate principal amount of Offered Securities which such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase
on such date; provided, however, that in no event shall the aggregate principal
amount of Offered Securities that any Underwriter has agreed to purchase
pursuant to Section 1 be increased pursuant to this Section 9 by an amount in
excess of one-ninth of such aggregate principal amount of Offered Securities
without the written consent of such Underwriter. If, on the Closing Date or
the Additional Closing Date, as the case may be, any Underwriter or
Underwriters shall fail or refuse to purchase the aggregate principal amount of
Offered Securities which it or they have agreed to purchase hereunder on such
date, and the aggregate principal amount of Offered Securities with respect to
which such default occurs is more than one-tenth of the aggregate principal
amount of Offered Securities to be purchased on such date, and arrangements
satisfactory to the Representatives and the Company for the purchase of such
aggregate principal amount of Offered Securities are not made within 36 hours
after such default, this Agreement (or the obligations of the several
Underwriters to purchase the Option Securities, as the case may be) shall
terminate without liability on the part of any non-defaulting Underwriter or
the Company. In any such case either the Representatives or the Company shall
have the right to postpone the Closing Date (or, in the case of the Option
Securities, the Additional Closing Date), but in no event for longer than seven
days, in order that the required changes, if any, in the Registration Statement
and in the Prospectus or in any other documents or arrangements may be
effected. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
10. Reimbursement upon Occurrence of Certain Events. If
this Agreement shall be terminated by the Underwriters, or any of them, because
of any failure or refusal on the part of the Company to comply with the terms
or to fulfill any of the conditions of this Agreement, or if for any reason the
Company
45
-45-
shall be unable to perform its obligations under this Agreement, the Company
agrees to reimburse the Underwriters or such Underwriters as have so terminated
this Agreement with respect to themselves, severally, for all out-of-pocket
expenses (including the fees and expenses of their counsel) reasonably incurred
by such Underwriters in connection with this Agreement or the offering
contemplated hereunder and pursuant to the Terms Agreement. In no event,
however, shall the Company be responsible to the Underwriters for any loss of
profits for failure to consummate the offering and sale of the Offered
Securities.
11. Miscellaneous. This Agreement shall inure to the
benefit of and be binding upon the Company, the Underwriters, any controlling
persons referred to herein and their respective successors and assigns.
Nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any other person, firm or corporation any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provision
herein contained. No purchaser of Offered Securities from any Underwriter
shall be deemed to be a successor by reason merely of such purchase.
12. Notice. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed or transmitted by any standard form of telecommunication. Notices to
the Underwriters shall be given to the Representatives at the address as set
forth in the Terms Agreement. Notices to the Company shall be given to it at
Service Corporation International, 0000 Xxxxx Xxxxxxx, Xxxxxxx, Xxxxx 00000
(facsimile: (713) 525- 9067); Attention: Xxxxx X. Shelger.
13. Counterparts; Applicable Law. This Agreement may be
signed in counterparts, each of which shall be an original and all of which
together shall constitute one and the same instrument. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York
applicable to contracts made and to be performed wholly therein, without giving
effect to the conflicts of laws provisions thereof.
46
-46-
If the foregoing is in accordance with your understanding,
please sign and return six counterparts hereof.
Very truly yours,
SERVICE CORPORATION INTERNATIONAL
By: /s/ XXXXXXX X. XXXXXXX
-------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President and Treasurer
CONFIRMED AND ACCEPTED,
as of the date first above written
X.X. XXXXXX SECURITIES INC.
CHASE SECURITIES INC.
CITICORP SECURITIES, INC.
BANCAMERICA XXXXXXXXX XXXXXXXX
SOCIETE GENERALE SECURITIES CORPORATION
By: X.X. XXXXXX SECURITIES INC.
By: /s/ XXXXXXX XXXXXXX
-------------------------------------
Name: Xxxxxxx Xxxxxxx
Title:
47
EXHIBIT I
SERVICE CORPORATION INTERNATIONAL
$200,000,000
6.50% Notes due March 15, 2008
TERMS AGREEMENT
March 11, 1998
Service Corporation International
0000 Xxxxx Xxxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx X. Shelger
Ladies and Gentlemen:
X.X. Xxxxxx Securities Inc., Chase Securities Inc., Citicorp
Securities, Inc., BancAmerica Xxxxxxxxx Xxxxxxxx and Societe Generale
Securities Corporation (the "Representatives") understand that Service
Corporation International, a Texas corporation (the "Company"), proposes to
issue and sell $200,000,000 aggregate principal amount of its 6.50% Notes due
March 15, 2008 (the "Notes") (the "Underwritten Securities"). The Notes are
Senior Debt Securities and are to be issued under the Senior Indenture.
Subject to the terms and conditions set forth herein or incorporated by
reference herein, the Underwriters named in Annex A attached hereto offer to
purchase, severally and not jointly, the aggregate principal amount of
Underwritten Securities set forth opposite the name of each such Underwriter on
Annex A hereto at a price of 98.959% of the principal amount thereof (the
"Purchase Price"). The Closing Date shall be March 16, 1998, at 9:00 A.M., New
York City time, at the offices of Xxxxxx Xxxxxx & Xxxxxxx.
The Underwritten Securities shall have the following terms:
Title: 6.50% Notes due March 15, 2008
Maturity: March 15, 2008
48
-2-
Interest rate: 6.50% per annum
Interest payment dates: March 15 and September 15, commencing
September 15, 1998
Record Dates: March 1 and September 1
Redemption at option of Company: None
Sinking fund provisions: None
Public offering price: 99.609% of the principal amount thereof
All the provisions contained in the document entitled
"Underwriting Agreement -- Service Corporation International -- Debt
Securities" (the "Underwriting Agreement") and dated March 11, 1998, a copy of
which you have previously received, are herein incorporated by reference in
their entirety and shall be deemed to be a part of this Terms Agreement to the
same extent as if the Underwriting Agreement had been set forth in full herein.
Terms defined in the Underwriting Agreement are used herein as therein defined.
The Representative authorized to approve the form of agreement
specified in Section 6(m) of the Underwriting Agreement and to give the consent
specified in Section 5(h) and Section 6(m) of the Underwriting Agreement is
X.X. Xxxxxx Securities Inc. The text of the first sentence of Section 5(h) of
the Underwriting Agreement is hereby deleted for purposes of the purchase and
sale of the Notes and the following shall be deemed inserted therein in lieu
thereof: "For a period beginning on the Representation Date to and including
the Business Day following the Closing Date, not to, and not to cause or permit
any subsidiary of the Company to, directly or indirectly, effect any offer,
sale or other disposition of, or registration of, any debt securities or any
other long-term debt, notes or debentures of or guaranteed by the Company or
any of its Subsidiaries which are substantially similar to the Notes (which
expressly shall be deemed not to include any debt securities or guarantees of
debt securities issued under the S-4) without the prior written consent of X.X.
Xxxxxx Securities Inc." The additional exceptions to Section 5(h) of the
Underwriting Agreement are: The Company may issue $300,000,000 aggregate
principal amount of its 6.30% Dealer remarketable securitiessm due March 15,
2020, pursuant to an underwriting agreement, together with the terms agreement
forming a part thereof of even date therewith, dated March 11, 1998 among the
Company and X.X. Xxxxxx Securities Inc., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated, Xxxxxx Xxxxxxx & Co. Incorporated and UBS Securities LLC.
49
-3-
Any action by the Representatives hereunder may be taken by
the Representatives jointly or by X.X. Xxxxxx Securities Inc. alone on behalf
of the Representatives, and any such action taken by X.X. Xxxxxx Securities
Inc. alone shall be binding upon the Representatives. Notices to the
Underwriters shall be given to the Representatives c/o X.X. Xxxxxx Securities
Inc., 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (facsimile: (000) 000-0000);
Attention: Syndicate Department.
This Agreement may be signed in counterparts, each of which
shall be an original and all of which together shall constitute one and the
same instrument. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed wholly in such state, without giving effect to the
conflicts of laws provisions thereof. Times referred to herein are to New York
City time.
50
-4-
Please accept this offer no later than 6:00 P.M. on March 11,
1998 by signing a copy of this Terms Agreement in the space set forth below and
returning the signed copy to us, or by sending us a written acceptance in the
following form:
"We hereby accept your offer, set forth in the Terms
Agreement, dated March 11, 1998, to purchase the Underwritten Securities on the
terms set forth therein and agree to and accept all other terms and provisions
of the Terms Agreement."
Very truly yours,
X.X. XXXXXX SECURITIES INC.
CHASE SECURITIES INC
CITICORP SECURITIES, INC.
BANCAMERICA XXXXXXXXX XXXXXXXX
SOCIETE GENERALE SECURITIES CORPORATION
By: X.X. XXXXXX SECURITIES INC.
By: /s/ XXXXXXX XXXXXXX
-------------------------------------
Name: Xxxxxxx Xxxxxxx
Title:
Accepted as of the date first
above written:
SERVICE CORPORATION INTERNATIONAL
By: /s/ XXXXXXX X. XXXXXXX
-----------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President and Treasurer
51
ANNEX A
Aggregate
Principal Amount
of Underwritten
Securities
Underwriters To Be Purchased
------------ ---------------
X.X. Xxxxxx Securities Inc. . . . . . . . . . . .. . . . . . $ 60,000,000
Chase Securities Inc. . . . . . . . . . . . . . .. . . . . . 50,000,000
Citicorp Securities, Inc. . . . . . . . . . . .. . . . . . 30,000,000
BancAmerica Xxxxxxxxx Xxxxxxxx . . . . . . . . .. . . . . . 30,000,000
Societe Generale Securities Corporation . . . . .. . . . . . $ 30,000,000
------------
Total: $200,000,000
============
52
SCHEDULE I
Significant Subsidiaries of the Company
within the meaning of Rule 1-02 of
Regulation S-X under the Securities
Exchange Act of 1934.
Investment Capital Corporation, a Texas corporation
SCI Funeral Services of New York, Inc., a New York corporation
SCI Funeral Services, Inc., an Iowa corporation
SCI International Limited, a Delaware corporation
SCI Texas Funeral Services, Inc., a Texas corporation
SCIT Holdings, Inc., a Delaware corporation
OGF-PFG, a French corporation
Service Corporation International France, a French corporation
