Exhibit 1
$300,000,000 AGGREGATE PRINCIPAL AMOUNT
THE COMMERCE GROUP, INC.
__ % SENIOR NOTES DUE _____
FORM OF
UNDERWRITING AGREEMENT
November __, 2003
Bear, Xxxxxxx & Co. Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
The Commerce Group, Inc. (the "COMPANY"), proposes, subject to the terms
and conditions stated herein, to issue and to sell $300,000,000 aggregate
principal amount of its __% Senior Notes due _____ (the "SECURITIES") to Bear,
Xxxxxxx & Co. Inc. and Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated (the
"LEAD UNDERWRITERS") and the other underwriters named in Schedule 1 hereto
(collectively, the "UNDERWRITERS"). The Securities will be issued pursuant to an
Indenture dated as of November __, 2003, (the "INDENTURE") to be entered into,
as the case may be, between the Company and Wachovia Bank, N.A., as trustee (the
"TRUSTEE"). This Agreement and the Indenture are referred to herein collectively
as the "TRANSACTION AGREEMENTS". This is to confirm the agreement among the
Company and the Underwriters concerning the offer, issuance and sale of the
Securities.
1. Representations, Warranties and Agreements of the Company. The
Company represents, warrants and agrees with the Underwriters that:
(a) A registration statement on Form S-3 (File No. 333-109255) (the
"REGISTRATION STATEMENT"), setting forth information with respect to the
Company and the Securities has (i) been prepared by the Company in
conformity in all material respects with the requirements of the
Securities Act of 1933, as amended, and the rules and regulations of the
Securities and Exchange Commission (the "COMMISSION") thereunder
(collectively, the "SECURITIES ACT"), (ii) been filed with the Commission
under the Securities Act and (iii) become effective under the Securities
Act. The Company has delivered copies of the Registration Statement and
all exhibits to you. As used in this Agreement, "EFFECTIVE TIME" means the
date and the time as of which the Registration Statement, or the most
recent post-effective amendment thereto, if any, was, declared effective
by the Commission; "EFFECTIVE DATE" means the date of the Effective Time;
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"PRELIMINARY PROSPECTUS" means each prospectus included in such
Registration Statement, or amendments thereof, before it became effective
under the Securities Act and any prospectus and prospectus supplement
filed with the Commission by the Company with the consent of the Lead
Underwriters pursuant to Rule 424(a) of the Securities Act relating to the
Securities; the term "REGISTRATION STATEMENT" includes such Registration
Statement, as amended as of the Effective Time, including the Incorporated
Documents (as defined below) and all information contained in the final
prospectus relating to the Securities filed with the Commission pursuant
to Rule 424(b) of the Securities Act and deemed to be a part of such
registration statement as of the Effective Time pursuant to Rule 430A of
the Securities Act; and "PROSPECTUS" means the prospectus and prospectus
supplement relating to the Securities in the form first used to confirm
sales of Securities. Reference made herein to any Preliminary Prospectus
or to the Prospectus shall be deemed to refer to and include any
Incorporated Documents incorporated by reference therein pursuant to Item
12 of Form S-3 under the Securities Act, as of the date of such
Preliminary Prospectus or the Prospectus, as the case may be and any
reference to any amendment or supplement to any Preliminary Prospectus or
the Prospectus shall be deemed to refer to and include any document filed
under the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Commission thereunder (the "EXCHANGE ACT") after the
date of such Preliminary Prospectus or the Prospectus, as the case may be,
and incorporated by reference in such Preliminary Prospectus or the
Prospectus, as the case may be; and any reference to any amendment to the
Registration Statement shall be deemed to include any annual report of the
Company filed with the Commission pursuant to Section 13(a) or 15(d) of
the Exchange Act after the Effective Time that is incorporated by
reference in the Registration Statement. The Commission has not issued any
order preventing or suspending the use of any Preliminary Prospectus,
Prospectus or the Registration Statement.
(b) The conditions for use of Form S-3, as set forth in the General
Instructions thereto, have been satisfied or waived.
(c) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will, when they become effective or are filed with the
Commission, as the case may be, conform in all material respects to the
requirements of the Securities Act; the Registration Statement and any
amendment thereto does not and will not, as of the applicable Effective
Date, contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; and the Prospectus does not and will
not, as of the date hereof and the Delivery Date (as defined below),
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; provided that, the Company makes no representation or warranty
as to information contained in or omitted from the Registration Statement
or the Prospectus in reliance upon and in conformity with written
information furnished to the Company by the Underwriters specifically for
inclusion therein as provided in Section 8(e).
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(d) The documents incorporated by reference in the Prospectus (the
"INCORPORATED DOCUMENTS"), when they were filed with the Commission, as
the case may be, conformed in all material respects to the requirements of
the Securities Act and the Exchange Act, as applicable; and none of the
Incorporated Documents, when such documents were filed with the
Commission, contained any untrue statement of a material fact or omitted
to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which
they were made, not misleading; and any further documents so filed and
incorporated by reference in the Prospectus, when such documents are filed
with Commission will conform in all material respects to the requirements
of the Exchange Act and will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading.
(e) No relationship, direct or indirect, exists between or among the
Company on the one hand, and the directors, officers, shareholders,
customers or suppliers of the Company on the other hand, which is required
to be described in the Prospectus which is not so described.
(f) There are no contracts, agreements or other documents which are
required to be described in the Prospectus or filed as exhibits to the
Registration Statement or the Incorporated Documents by the Securities Act
or the Exchange Act, as the case may be, which have not been described in
the Prospectus or filed as exhibits to the Registration Statement or the
Incorporated Documents.
(g) Except as set forth in or contemplated by the Prospectus,
neither the Company nor any of its subsidiaries has sustained, since the
date of the latest audited financial statements included or incorporated
by reference in the Prospectus, any material loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree (a "MATERIAL LOSS"); since such date, there has
not been any material adverse change in the capital stock, short-term debt
or long-term debt of the Company or any of its subsidiaries or any
material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs, management,
consolidated financial position, shareholders' equity, results of
operations, business of the Company and its subsidiaries (a "MATERIAL
ADVERSE CHANGE"); and subsequent to the respective dates as of which
information is given in the Prospectus and up to the Delivery Date, except
as set forth in the Prospectus, (i) neither the Company nor any of its
subsidiaries has incurred any liabilities or obligations outside the
ordinary course of business, direct or contingent, which are material to
the Company and its subsidiaries taken as a whole, nor entered into any
material transaction not in the ordinary course of business and (ii) there
have not been dividends or distributions of any kind declared, paid or
made by the Company on any class of its capital stock, except for
regularly scheduled dividends.
(h) Each of the Company and each of The Commerce Insurance Company,
Commerce West Insurance Company, American Commerce Insurance Company, ACIC
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Holdings Co., Inc., Citation Insurance Company and Commerce Holdings, Inc.
(the "SIGNIFICANT SUBSIDIARIES"), which are the Company's only
"significant subsidiaries" (as defined under Rule 405 of the Securities
Act), has been duly organized, is validly existing as a corporation in
good standing under the laws of its respective jurisdiction of
incorporation, has all requisite corporate power and authority to carry on
its business as it is currently being conducted and in all material
respects as described in the Prospectus and to own, lease and operate its
properties, and is duly qualified and in good standing as a foreign
corporation authorized to do business in each jurisdiction in which the
nature of its business or its ownership or leasing of property requires
such qualification, except where the failure to so register or qualify
would not, singly or in the aggregate, result in a material adverse effect
on the properties, business, results of operations, conditions (financial
or otherwise), affairs or prospects of the Company and its subsidiaries,
taken as a whole (a "MATERIAL ADVERSE EFFECT").
(i) The entities listed on Schedule 2 hereto are the only
subsidiaries, direct or indirect, and Affiliates (as defined below) of the
Company. The Company owns, directly or indirectly through other
subsidiaries, the percentage indicated on Schedule 2 of the outstanding
capital stock or other securities evidencing equity ownership of such
subsidiaries, free and clear of any security interest, claim, lien,
limitation on voting rights or encumbrance; and all of such securities
have been duly authorized, validly issued, are fully paid and
nonassessable and were not issued in violation of any preemptive or
similar rights. There are no outstanding subscriptions, preemptive or
other rights, warrants, calls, commitments of sale or options to acquire,
or instruments convertible into or exchangeable for, any such shares of
capital stock or other equity interest of such subsidiaries.
(j) Neither the Company nor any of its subsidiaries is (i) in
violation of its respective charter or bylaws (or equivalent
organizational documents), (ii) is in default in the performance of any
bond, debenture, note, indenture, mortgage, deed of trust or other
agreement or instrument to which it is a party or by which it is bound or
to which any of its properties is subject, or (iii) is in violation of any
law, statute, rule, regulation, judgment or court decree applicable to the
Company, any of its subsidiaries or their assets or properties, except in
the case of clauses (ii) and (iii) for any such violation or default which
does not or would have a Material Adverse Effect.
(k) The catastrophic coverage arrangements described in the
Prospectus are in full force and effect as of the date hereof and all
other retrocessional treaties and arrangements to which the Company or any
of its Significant Subsidiaries is a party and which have not terminated
or expired by their terms are in full force and effect, and none of the
Company or any of its Significant Subsidiaries is in violation of or in
default in the performance, observance or fulfillment of, any obligation,
agreement, covenant or condition contained therein, except to the extent
that any such violation or default would not have a Material Adverse
Effect; neither the Company nor any of its Significant Subsidiaries has
received any notice from any of the other parties to such treaties,
contracts or agreements that such other party intends not to perform such
treaty, contract or agreement where such failure to perform would have a
Material Adverse Effect and, to the best knowledge of the Company, the
Company has no reason to believe that any of
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the other parties to such treaties or arrangements will be unable to
perform such treaty or arrangement in any respect that would have a
Material Adverse Effect.
(l) The execution, delivery and performance by the Company of the
Transaction Agreements, the issuance and sale of the Securities and the
consummation of the transactions contemplated hereby and thereby will not
violate or constitute a breach of any of the terms or provisions of, or a
default under (or an event that with notice or the lapse of time, or both,
would constitute a default), or require consent under, or result in the
imposition of a lien or encumbrance on any properties of the Company or
any of its subsidiaries, or an acceleration of indebtedness pursuant to,
(i) the charter or bylaws (or equivalent organizational documents) of the
Company or any of its subsidiaries, (ii) any bond, debenture, note,
indenture, mortgage, deed of trust or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by which any of
them or their property is or may be bound, (iii) any statute, rule or
regulation applicable to the Company, any of its subsidiaries or any of
their assets or properties, or (iv) any judgment, order or decree of any
court or governmental agency or authority having jurisdiction over the
Company, any of its subsidiaries or their assets or properties, other
than, in the case of clauses (ii) through (iv), any violation, breach,
default, consent, imposition or acceleration that would not a Material
Adverse Effect and except for such consents or waivers as may have been
obtained by the Company or such consents or filings as may be required
under the state or foreign securities or Blue Sky laws and regulations or
as may be required by the National Association of Securities Dealers, Inc.
(the "NASD"). No consent, approval, authorization or order of, or filing,
registration, qualification, license or permit of or with, any court or
governmental agency, body or administrative agency is required for the
execution, delivery and performance by the Company of the Transaction
Agreements, the issuance and sale of the Securities and the consummation
of the transactions contemplated hereby and thereby, except such as (i)
would not have a Material Adverse Effect, (ii) would not prohibit or
adversely affect the issuance of any of the Securities and (iii) have been
obtained and made under the Securities Act, the Trust Indenture Act of
1939 (the "TRUST INDENTURE ACT"), state or foreign securities or Blue Sky
laws and regulations or such as may be required by the NASD. No consents
or waivers from any other person are required for the execution, delivery
and performance by the Company of any of the Transaction Agreements, the
issuance and sale of the Securities and the consummation of the
transactions contemplated hereby and thereby, other than such consents and
waivers which failure to obtain (i) would not have a Material Adverse
Effect, or (ii) would not prohibit or adversely affect the issuance of any
of the Securities or which have been obtained.
(m) Except as set forth in or contemplated by the Prospectus, there
is (i) no action, suit or proceeding before or by any court, arbitrator or
governmental agency, body or official, domestic or foreign, now pending or
threatened or, to the knowledge of the Company, contemplated to which the
Company or any of its subsidiaries is or may be a party or to which the
business or property of the Company or any of its subsidiaries is or may
be subject, (ii) no statute, rule, regulation or order that has been
enacted, adopted or issued by any governmental agency or that has been
proposed by any governmental body and (iii) no injunction, restraining
order or order of any nature by a United States federal or state court or
foreign court of competent jurisdiction to which the Company or any of
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its subsidiaries is or may be subject issued that, in the case of clauses
(i), (ii) and (iii) above, (x) would, singly or in the aggregate, result
in a Material Adverse Effect, (y) would interfere with or adversely affect
the issuance of any of the Securities or (z) in any manner draw into
question the validity of any of the Transaction Agreements or any of the
Securities.
(n) None of the employees of the Company and its subsidiaries is
represented by a union and, to the best knowledge of the Company and its
subsidiaries, no union organizing activities are taking place. Neither the
Company nor any of its subsidiaries has violated any United States
federal, state or local law or foreign law relating to discrimination in
hiring, promotion or pay of employees, nor any applicable wage or hour
laws, nor any provision of the Employee Retirement Income Security Act of
1974, as amended, and the rules and regulations thereunder (collectively,
"ERISA"), or analogous foreign laws and regulations, which would result in
a Material Adverse Effect.
(o) Each of the Company and its subsidiaries has (i) good and, in
the case of real property, marketable title to all of the properties and
assets described in the Prospectus as owned by it, free and clear of all
liens, charges, encumbrances and restrictions, except such as are
described in the Prospectus, or as would not have a Material Adverse
Effect, (ii) peaceful and undisturbed possession under all leases to which
it is party as lessee, (iii) all material licenses, certificates, permits,
authorizations, approvals, franchises and other rights from, and has made
all declarations and filings with, all United States federal, state and
local governmental authorities (including, without limitation, from the
insurance regulatory agencies of the various jurisdictions where it
conducts business) and all courts and other governmental tribunals (each,
an "AUTHORIZATION") necessary to engage in the business currently
conducted by it in the manner described in the Prospectus, except where
failure to hold such Authorizations would not have a Material Adverse
Effect, (iv) have fulfilled and performed all obligations necessary to
maintain each authorization and (v) no knowledge of any threatened action,
suit or proceeding or investigation that would result in the revocation,
termination or suspension of any Authorization, the revocation,
termination or suspension of which would have a Material Adverse Effect.
Except as would not have a Material Adverse Effect, all such
Authorizations are valid and in full force and effect and the Company and
its subsidiaries are in compliance in all material respects with the terms
and conditions of all such Authorizations and with the rules and
regulations of the regulatory authorities having jurisdiction with respect
thereto. No insurance regulatory agency or body has issued any order or
decree impairing, restricting or prohibiting the payment of dividends by
any subsidiary of the Company to its parent, other than any such orders or
decrees the issuance of which could not have a Material Adverse Effect.
Except as would not have a Material Adverse Effect, all leases to which
the Company or any of its subsidiaries is a party are valid and binding
and no default by the Company or any of its subsidiaries has occurred and
is continuing thereunder, and, to the Company's knowledge, no material
defaults by the landlord are existing under any such lease.
(p) All tax returns required to be filed by the Company or any of
its subsidiaries, in all jurisdictions through the date hereof, have been
so filed or extensions or filing times have been duly requested. All
taxes, including withholding taxes,
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penalties and interest, assessments, fees and other charges due or claimed
to be due from such entities or that are due and payable have been paid,
other than those being contested in good faith and for which adequate
reserves have been provided or those currently payable without penalty or
interest. The Company does not know of any material proposed additional
tax assessments against it or any of its subsidiaries.
(q) Neither the Company nor any of its subsidiaries is, or after the
application of the net proceeds from the sale of the Securities will be,
an "investment company" as defined, and subject to regulation, under the
Investment Company Act of 1940, as amended, and the rules and regulations
of the Commission thereunder (collectively, the "INVESTMENT COMPANY ACT"),
or analogous foreign laws and regulations.
(r) The authorized, issued and outstanding capital stock of the
Company has been validly authorized and issued, is fully paid and
nonassessable and was not issued in violation of or subject to any
preemptive or similar rights; and such authorized capital stock conforms
in all material respects to the description thereof set forth in the
Prospectus. The Company had at __________, 2003, an authorized and
outstanding capitalization as set forth in the Prospectus and, except as
expressly set forth in the Prospectus, there are no outstanding preemptive
or other rights, warrants or options to acquire, or instruments
convertible into or exchangeable for, any shares of capital stock or other
equity interest in the Company or any of its subsidiaries, or any
contract, commitment, agreement, understanding or arrangement of any kind
relating to the issuance of any capital stock of the Company or any such
subsidiary, any such convertible or exchangeable securities or any such
rights, warrants or options. There has been no change in the authorized or
outstanding capitalization of the Company since the date indicated in the
Prospectus, except with respect to (i) changes occurring in the ordinary
course of business and (ii) changes in the outstanding common stock, par
value $.01 per share, of the Company (the "COMMON STOCK"), and options or
rights to acquire Common Stock resulting from transactions relating to the
Company's employee benefit, dividend reinvestment, stock purchase plans or
stock options granted to agents in connection with the acquisition of
American Commerce Insurance Company as described in the Prospectus.
(s) The Company and each of its subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable assurance
that: (i) transactions are executed in accordance with management's
general or specific authorizations; (ii) transactions are recorded as
necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain accountability
for assets; (iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect thereto.
(t) The Company and each of its subsidiaries maintains insurance
covering their properties, personnel and business. Such insurance insures
against such losses and risks as are adequate in accordance with the
Company's perception of customary industry practice to protect the Company
and its subsidiaries and their businesses. Neither the
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Company nor any of its subsidiaries have received notice from any insurer
or agent of such insurer that substantial capital improvements or other
expenditures will have to be made in order to continue such insurance. All
such insurance is outstanding and duly in force on the date hereof and
will be outstanding and duly in force on the Delivery Date.
(u) Neither the Company nor any agent thereof acting on the behalf
of the Company has taken, and none of them will take, any action that
might cause the execution, delivery and performance by the Company of the
Transaction Agreements, the issuance and sale of the Securities and the
consummation of the transactions contemplated hereby and thereby to
violate Regulation G (12 C.F.R. Part 207), Regulation T (12 C.F.R. Part
220), Regulation U (12 C.F.R. Part 221) or Regulation X (12 C.F.R. Part
224) of the Board of Governors of the Federal Reserve System.
(v) Ernst & Young LLP, who have certified the financial statements
and supporting schedules included or incorporated by reference in the
Prospectus, and PricewaterhouseCoopers LLP, the Company's current
auditors, are or were independent accountants as required by the
Securities Act during the periods covered by the financial statements on
which they reported or which they reviewed included or incorporated by
reference into the Prospectus. The consolidated historical statements
together with the related schedules and notes fairly present, in all
material respects, the consolidated financial condition and results of
operations of the Company and its subsidiaries at the respective dates and
for the respective periods indicated, in accordance with generally
accepted accounting principles consistently applied throughout such
periods, except as stated therein. Other financial and statistical
information and data included or incorporated by reference in the
Prospectus are, in all material respects, accurately presented and
prepared on a basis consistent with such financial statements, except as
may otherwise be indicated therein, and the books and records of the
Company and its subsidiaries.
(w) Each of the Company's subsidiaries is in compliance with the
requirements of the insurance laws and regulations of its jurisdictions of
incorporation and the insurance laws and regulations of the jurisdictions
which are applicable to each such subsidiary, and has filed all notices,
reports, documents or other information required to be filed thereunder,
except where the failure to so comply or file would not result in a
Material Adverse Effect.
(x) All reinsurance treaties and arrangements to which any
subsidiary is a party are in full force and effect and no subsidiary is in
violation of or in default in the performance, observance or fulfillment
of, any obligation, agreement, covenant or condition contained therein; no
subsidiary has received any notice from any of the other parties to such
treaties, contracts or agreements that such other party intends not to
perform such treaty and the Company has no reason to believe that any of
the other parties to such treaties or arrangements will be unable to
perform such treaty or arrangement; except, in each of the above cases,
(i) to the extent adequately and properly reserved for the consolidated
financial statements of the Company included in the Prospectus and (ii)
for such violations or defaults that, singly or in the aggregate, would
not result in a Material Adverse Effect.
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(y) The 2002 statutory annual statements of each of The Commerce
Insurance Company, Commerce West Insurance Company, American Commerce
Insurance Company and Citation Insurance Company. (together, the
"INSURANCE SUBSIDIARIES") and the statutory balance sheets and income
statements included in such statutory annual statements together with
related schedules and notes, have been prepared, in all material respects,
in conformity with statutory accounting principles or practices required
or permitted by the appropriate Insurance Department of the jurisdiction
of domicile of each such subsidiary, and such statutory accounting
practices have been applied on a consistent basis throughout the periods
involved, except as may otherwise be indicated therein or in the notes
thereto, and present fairly, in all material respects, the statutory
financial position of the Insurance Subsidiaries as of the dates thereof,
and the statutory basis results of operations of the Subsidiaries for the
periods covered thereby.
(z) The Company and the Insurance Subsidiaries have made no material
changes in their insurance reserving practices since __________, 2003,
except where such change in such insurance reserving practices would not
reasonably be expected to have a Material Adverse Effect.
(aa) Except as otherwise disclosed in the Propsectus, the Company is
not aware of any threatened or pending downgrading of any Significant
Subsidiaries' claims-paying ability rating from A.M. Best Company, Inc.
[or financial strength rating of "[ ]" and "[ ]" from Standard & Poor's
Rating Services, Inc. and Xxxxx'x Investor Services, respectively].
(bb) There are no contracts, agreements or understandings between
the Company, any of the subsidiaries of the Company and any person
granting such person the right to require the Company to file a
registration statement under the Securities Act with respect to any
securities of the Company owned or to be owned by such person as a result
of the transaction contemplated hereby.
(cc) The Company has all necessary corporate power and authority to
execute and deliver this Agreement and to perform its obligations
hereunder; this Agreement has been duly authorized, executed and delivered
by the Company and assuming due authorization, execution and delivery by
the Underwriters, it will be a legally valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms,
except (i) as such enforcement may be limited by bankruptcy, insolvency,
reorganization, receivership, moratorium, fraudulent transfer or similar
laws now or hereinafter in effect relating to or affecting creditors'
rights generally and by general principles of equity, including, without
limitation, concepts of reasonableness, materiality, good faith and fair
dealing, (ii) that the remedies of specific performance and injunctive and
other forms of equitable relief are subject to general equitable
principles, whether such enforcement is sought at law or in equity, (iii)
that such enforcement may be subject to the discretion of the court before
which any proceedings therefore may be brought and (iv) except with
respect to the rights of indemnification and contribution hereunder, where
enforcement hereof may be limited by United States federal or state
securities laws or the policies underlying such laws.
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(dd) The Indenture has been duly authorized by the Company; the
Company has all necessary corporate power and authority to execute and
deliver the Indenture and to perform its obligations thereunder; the
Indenture will, when filed with the Commission, be qualified under the
Trust Indenture Act and conform in all material respects to the
requirements of the Trust Indenture Act; the Indenture, when duly executed
and delivered by the Company, assuming due authorization, execution and
delivery of the Indenture by the Trustee, will constitute a legally valid
and binding agreement of the Company, enforceable against the Company in
accordance with its terms, except (i) as such enforcement may be limited
by bankruptcy, insolvency, reorganization, receivership, moratorium,
fraudulent transfer or similar laws now or hereinafter in effect relating
to or affecting creditors' rights generally and by general principles of
equity, including, without limitation, concepts of reasonableness,
materiality, good faith and fair dealing, (ii) that the remedies of
specific performance and injunctive and other forms of equitable relief
are subject to general equitable principles, whether such enforcement is
sought at law or in equity, (iii) that such enforcement may be subject to
the discretion of the court before which any proceedings therefore may be
brought and (iv) except with respect to the rights of indemnification and
contribution thereunder, where enforcement thereof may be limited by
United States federal or state securities laws or by public policy. The
Indenture will conform, when executed and delivered, in all material
respects to the description thereof contained in the Prospectus.
(ee) The Securities have been duly authorized by the Company and
when the Securities are executed, authenticated and issued in accordance
with the terms of the Indenture and delivered to and paid for by the
Underwriters pursuant to this Agreement, assuming due authentication of
the Securities by the Trustee, such Securities will constitute legally
valid and binding obligations of the Company, entitled to the benefits of
the Indenture, enforceable against the Company in accordance with their
terms, except (i) as such enforcement may be limited by bankruptcy,
insolvency, reorganization, receivership, moratorium, fraudulent transfer
or similar laws now or hereinafter in effect relating to or affecting
creditors' rights generally and by general principles of equity,
including, without limitation, concepts of reasonableness, materiality,
good faith and fair dealing, (ii) that the remedies of specific
performance and injunctive and other forms of equitable relief are subject
to general equitable principles, whether such enforcement is sought at law
or in equity, and (iii) that such enforcement may be subject to the
discretion of the court before which any proceedings therefore may be
brought. The Securities will conform, when issued, in all material
respects to the description thereof contained in the Prospectus.
(ff) The statements made in the Prospectus under the caption
"Description of the Notes," insofar as such statements purport to
constitute summaries of the Indenture and the Securities, constitute
accurate summaries of the matters described therein in all material
respects.
(gg) Neither the Company, nor to its knowledge, any of its
Affiliates (as defined in Regulation C of the Securities Act, an
"AFFILIATE"), has taken, directly or indirectly, any action designed to
cause or result in, or which has constituted or which
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might reasonably be expected to constitute, the stabilization or
manipulation of the price of the Securities to facilitate the sale or
resale of such securities.
(hh) No event has occurred nor has any circumstance arisen which,
had the Securities been issued on the date hereof, would constitute a
default or an event of default under the Indenture as summarized in the
Prospectus.
(ii) Except as disclosed in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person that would
give rise to a valid claim against the Company or any Underwriter for a
brokerage commission, finder's fee or other like payment in connection
with this offering.
(jj) Each certificate signed by any officer of the Company and
delivered to the Underwriters or counsel for the Underwriters shall be
deemed to be a representation and warranty by the Company to the
Underwriters as to the matters covered thereby.
2. Purchase of the Securities by the Underwriters. On the basis of
the representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell to the several
Underwriters and each of the Underwriters, severally and not jointly, agrees to
purchase from the Company the aggregate principal amount of Securities set forth
opposite that Underwriter's name in Schedule 1 hereto. The price of the
Securities shall be [ ]% of the principal amount thereof. The Company shall not
be obligated to deliver any of the Securities to be delivered on the Delivery
Date, except upon payment for all the Securities to be purchased on the Delivery
Date as provided herein.
3. Offering of Securities by the Underwriters. The several
Underwriters propose to offer the Securities for sale upon the terms and
conditions set forth in the Prospectus.
4. Delivery of and Payment for the Securities. Delivery of and
payment for the Securities shall be made at the office of Xxxxxxx Xxxxxxx &
Xxxxxxxx LLP, at 10:00 a.m. (New York City time) on the third full business day
following the date of this Agreement, or at such other date or place as shall be
determined by agreement between the Underwriters and the Company (such date and
time of delivery of payment for the Securities, the "DELIVERY DATE"). On the
Delivery Date, the Company shall deliver or cause to be delivered certificates
representing the Securities to the Underwriters for the account of each
Underwriter against payment to or upon the order of the Company of the purchase
price by wire transfer in immediately available funds. Time shall be of the
essence, and delivery at the time and place specified pursuant to this Agreement
is a further condition of the obligation of each Underwriter hereunder. Upon
delivery, the Securities shall be registered in such names and in such
denominations as the Lead Underwriters shall request in writing not less than
two full business days prior to the Delivery Date.
The Company will deliver, against payment of the purchase price, the
Securities in the form of one or more permanent global certificates (the "GLOBAL
SECURITIES"), registered in the name of Cede & Co., as nominee for The
Depository Trust Company ("DTC"). The Global Securities will be made available,
at the request of the Underwriters, for checking at least 24 hours prior to the
Delivery Date.
12
5. Further Agreements of the Company. The Company agrees:
(a) To prepare the Prospectus in a form approved by the Lead
Underwriters and to file such Prospectus pursuant to Rule 424(b) under the
Securities Act not later than Commission's close of business on the second
business day following the execution and delivery of this Agreement or, if
applicable, such earlier time as may be required by Rule 430A(a)(3) under
the Securities Act; to make no further amendment or any supplement to the
Registration Statement or to the Prospectus prior to the Delivery Date
except as permitted herein; to advise the Underwriters, promptly after it
receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been filed and
to furnish the Underwriters with copies thereof; to file promptly all
reports and any definitive proxy or information statements required to be
filed by the Company with the Commission pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of the Prospectus
and for so long as the delivery of a prospectus is required in connection
with the offering or sale of the Securities; to advise the Underwriters,
promptly after it receives notice thereof, of the issuance by the
Commission of any stop order or of any order preventing or suspending the
use of any Preliminary Prospectus or the Prospectus, of the suspension of
the qualification of the Securities for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for any
such purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or the Prospectus or for
additional information; and, in the event of the issuance of any stop
order or of any order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus or suspending any such qualification, to use
promptly its best efforts to obtain its withdrawal;
(b) To furnish promptly to the Underwriters and to counsel for the
Underwriters a signed or facsimile signed copy of the Registration
Statement as originally filed with the Commission, and each amendment
thereto filed with the Commission, including all consents and exhibits
filed therewith;
(c) To deliver promptly to the Underwriters such number of the
following documents as the Underwriters shall reasonably request: (i)
conformed copies of the Registration Statement as originally filed with
the Commission and each amendment thereto (in each case excluding
exhibits) and (ii) each Preliminary Prospectus, the Prospectus and any
amended or supplemented Prospectus, and, if the delivery of a prospectus
is required at any time after the Effective Time in connection with the
offering or sale of the Securities or any other securities relating
thereto and if at such time any events shall have occurred as a result of
which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such Prospectus is
delivered, not misleading, or, if for any other reason it shall be
necessary to amend or supplement the Prospectus in order to comply with
the Securities Act, to notify the Underwriters and, upon their request, to
prepare and furnish without charge to the Underwriters and to any dealer
in securities as many copies as the Underwriters may from time to time
reasonably
13
request of an amended or supplemented Prospectus which will correct such
statement or omission or effect such compliance;
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the
Prospectus that may, in the reasonable judgment of the Company or the Lead
Underwriters, be required by the Securities Act or is requested by the
Commission;
(e) For so long as the delivery of a prospectus is required in
connection with the initial offering or sale of the Securities, prior to
filing with the Commission any amendment to the Registration Statement or
supplement to the Prospectus or any Prospectus and any document
incorporated by reference in the Prospectus pursuant to Rule 424 of the
Securities Act, to furnish a copy thereof to the Underwriters and counsel
for the Underwriters and obtain the consent of the Lead Underwriters to
the filing;
(f) As soon as practicable after the Effective Date, to make
generally available to the Company's security holders and to deliver to
the Underwriters an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Securities
Act (including, at the option of the Company, Rule 158 of the Securities
Act);
(g) Promptly from time to time, to take such action as the Lead
Underwriters may reasonably request to qualify the Securities for offering
and sale under the securities laws of such jurisdictions in the United
States as the Lead Underwriters may request and in such other
jurisdictions as the Company and the Lead Underwriters may mutually agree,
and to comply with such laws so as to permit the continuance of sales and
dealings therein in such jurisdictions for as long as may be necessary to
complete the distribution of the Securities; provided that, in connection
therewith, the Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any
jurisdiction;
(h) Not to take, directly or indirectly, any action which is
designed to stabilize or manipulate, or which constitutes or which might
reasonably be expected to cause or result in stabilization or
manipulation, of the price of any security of the Company in connection
with the initial offering of the Securities (except after consultation
with the Underwriters and as may be permitted by under United States
federal securities laws);
(i) To use its best efforts to cause the Securities to be accepted
for clearance and settlement through the facilities of DTC;
(j) To execute and deliver the Indenture in form and substance
satisfactory to the Lead Underwriters;
(k) To apply the net proceeds from the issuance of the Securities as
set forth under "Use of Proceeds" in the Prospectus;
14
(l) To take such steps as shall be necessary to ensure that the
Company or any of its subsidiaries shall not become an "investment
company" as defined, and subject to regulation, under the Investment
Company Act.
6. Expenses. Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement becomes effective or is terminated,
the Company agrees to pay: (a) the costs incident to the issuance, sale and
delivery of the Securities; (b) the costs incident to the preparation, printing
and filing under the Securities Act of the Registration Statement and any
amendments and exhibits thereto any Preliminary Prospectus and any Prospectus or
any amendment or supplement thereto; (c) the costs of distributing the
Registration Statement as originally filed and each amendment thereto and any
post-effective amendments thereof (including, in each case, exhibits), any
Preliminary Prospectus, the Prospectus and any amendment or supplement to the
Prospectus, in each case, as provided in this Agreement; (d) the costs of
distributing the terms of any agreement relating to the organization of the
underwriting syndicate and selling group to the members thereof, by mail, telex
or other reasonable means of communication; (e) the costs, if any, of producing
and distributing the Transaction Agreements; (f) the fees and expenses of
qualifying the Securities under the securities laws of the several jurisdictions
in the United States as provided in Section 5(g) and of preparing, photocopying
and distributing Blue Sky memoranda (including related fees and expenses of
counsel to the Underwriters in connection therewith); (g) the expenses of the
Company and the Underwriters in connection with the marketing and offering of
the Securities, including, if applicable, all reasonable costs and expenses
incident to the preparation of "road show" presentation or comparable marketing
materials and the road show traveling expenses of the Company in connection with
the offering of the Securities; (h) all fees and expenses incurred in connection
with any rating of the Securities; (i) the fees and expenses of the Company's
counsel and independent accountants and the fees and expenses (including fees
and expenses of counsel, if applicable) of the Company, the Trustee and the
costs and charges of any registrar and paying agent under the Indenture; and (j)
all other costs and expenses incident to the performance of the obligations of
the Company under this Agreement; provided, however, that, except as provided in
this Section 6 and in Section 11, the Underwriters shall pay their own costs and
expenses, including the costs and expenses of their counsel.
7. Conditions of the Underwriters' Obligations. The several
obligations of the Underwriters hereunder are subject to the accuracy, when made
and on the Delivery Date, of the representations and warranties of the Company
contained herein, to the performance by the Company of its obligations
hereunder, and to the satisfaction of each of the following additional
conditions and agreements:
(a) The Prospectus shall have been timely filed with the Commission
in accordance with Section 5(a) of this Agreement; no stop order
suspending the effectiveness of the Registration Statement or any part
thereof shall have been issued and no proceeding for that purpose shall
have been initiated or threatened by the Commission; and any request of
the Commission for inclusion of additional information in the Registration
Statement or the Prospectus or otherwise shall have been complied with in
all material respects.
15
(b) No Underwriter shall have discovered and disclosed to the
Company on or prior to the Delivery Date that the Registration Statement
or any amendment thereto, contained, as of the Effective Date, an untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading or that the Prospectus or any supplement thereto, contains and
will contain, as of the date hereof and the Delivery Date, an untrue
statement of a material fact or omits and will omit to state a material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(c) All corporate proceedings and other legal matters incident to
the authorization, form and validity of the Registration Statement, the
Preliminary Prospectus, the Prospectus, the Transaction Agreements and the
Securities, and all other legal matters relating to the offering, issuance
and sale of the Securities and the transactions contemplated hereby and
thereby shall be satisfactory in all material respects to counsel to the
Underwriters.
(d) Xxxxxx, XxXxxxxxx & Fish LLP, special counsel to the Company,
shall have furnished to the Underwriters its written opinion, addressed to
the Underwriters and dated the Delivery Date, in form and substance
satisfactory to the Underwriters, substantially to the effect that:
(i) The Registration Statement was declared effective under
the Securities Act and the Indenture was qualified under the Trust
Indenture Act as of the date and time specified in such opinion, the
Prospectus was filed with the Commission pursuant to the
subparagraph of Rule 424(b) of the Securities Act specified in such
opinion on the date specified therein; and no stop order suspending
the effectiveness of the Registration Statements has been issued
and, to the knowledge of such counsel, no proceeding for that
purpose is pending or threatened by the Commission.
(ii) The Registration Statement and the Prospectus (including
any documents incorporated by reference therein) and any further
amendments or supplements thereto made by the Company prior to the
Delivery Date (other than the financial statements and notes thereto
and related schedules and other financial and accounting data
contained therein or omitted therefrom, as to which such counsel
need express no opinion), when they were filed with the Commission
complied as to form in all material respects with the requirements
of the Securities Act, and the Indenture conforms in all material
respects to the requirements of the Trust Indenture Act.
(iii) The Company has duly authorized, executed and delivered
this Agreement.
(iv) The statements made in the Prospectus under the caption
"Description of the Notes," insofar as such statements purport to
constitute summaries of the Indenture and the Securities, constitute
accurate summaries of
16
the matters described therein in all material respects. The
Securities conform in all material respects to the description
thereof in the Prospectus.
(v) The issue and sale of the Securities by the Company and
the compliance of the Company with all of the provisions of this
Agreement, and the execution and delivery of the Indenture and the
Securities, will not breach or result in a default under any
indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument identified on an annexed schedule furnished
to such counsel by the Company, nor will such action violate the
Articles of Organization or By-laws of the Company or any United
States federal or Massachusetts statute or any rule or regulation
that has been issued pursuant to any United States federal or
Massachusetts statute or any order known to such counsel issued
pursuant to any United States federal or Massachusetts statute or by
any court or governmental agency or body having jurisdiction over
the Company or any of its properties.
(vi) No consent, approval, authorization, order, license,
registration or qualification of or with any United States federal
or Massachusetts governmental agency or body is required for the
sale of the Securities by the Company or the compliance by the
Company with all of the provisions of the Transaction Agreements,
except such consents, approvals, authorizations, orders, licenses,
registrations or qualifications which have been obtained or made or
as may be required under state securities or Blue Sky Laws in
connection with the purchase and distribution of the Securities by
the Underwriters.
(vii) The Incorporated Documents or any further amendment or
supplement thereto made by the Company prior to the Delivery Date
(other than the financial statements, notes and schedules or any
other financial or accounting data included or incorporated by
reference in or omitted from the Incorporated Documents, as to which
such counsel need express no opinion), when they were filed with the
Commission and as of the Delivery Date, complied or comply, as the
case may be as to form in all material respects with the
requirements of the Exchange Act.
(viii) There are no contacts or other documents which are
required to be described in the Prospectus or filed as exhibits to
the Registration Statement by the Securities Act which have not been
described in the Prospectus or filed as exhibits to the Registration
Statement.
(ix) Neither the Company nor any of its subsidiaries is, or
after the application of the net proceeds from the sale of the
Securities will be, an "investment company" as defined in, and
subject to regulation under, the Investment Company Act.
In rendering such opinion, such counsel may state that its opinion
is limited to matters governed by the federal laws of the United States of
America and the laws of the Commonwealth of Massachusetts and that such
counsel is not admitted in any state other
17
than the Commonwealth of Massachusetts. In addition, the opinions of such
counsel described in this paragraph shall be rendered to the Underwriters
at the request of the Company and shall so state therein. In addition,
such opinions may contain customary recitals, conditions and
qualifications.
In addition, such counsel shall state that it has participated in
conferences with officers and other representatives of the Company,
representatives of Ernst & Young LLP, PricewaterhouseCoopers LLP, the
Underwriters and their counsel in connection with the preparation of the
Registration Statement and the Prospectus at which conferences the
contents of the Registration Statement and the Prospectus were discussed,
reviewed and revised. Although such counsel is not passing upon, and does
not assume responsibility for, the accuracy, completeness or fairness of
such statements and has not made any independent investigation thereof
(except as indicated above), on the basis of the information which was
developed in the course thereof, considered in light of such counsel's
understanding of applicable law and experience such counsel has gained
through its practice thereunder, such counsel will advise the Underwriters
that such counsel has no reason to believe that (i) the Registration
Statement (including the Incorporated Documents), on the Effective Date,
contained an untrue statement of material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading and (ii) the Prospectus (including the
Incorporated Documents), as of its date and as of the Delivery Date,
contained or contains an untrue statement of a material fact or omitted or
omits to state a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading. Such counsel need not express any
view as to the financial statements, notes and schedules or any other
financial or accounting data included or incorporated by reference in or
omitted from the Registration Statement and the Prospectus or the Form T-1
filed as an exhibit to the Registration Statement.
(e) Xxxxx X. Xxxxxxx, Esq., Senior Vice President and General
Counsel of the Company, shall have furnished to the Underwriters his
written opinion, addressed to the Underwriters and dated the Delivery
Date, in form and substance reasonably satisfactory to the Underwriters,
substantially to the effect that:
(i) Each of the Company and its Significant Subsidiaries which
is incorporated in the United States has been duly incorporated and
is validly existing as a corporation in good standing under the laws
of its respective jurisdiction of incorporation, has all requisite
corporate power and authority to own, lease and operate its
properties and to conduct its business in all material respects as
it is currently being conducted and as described in the Prospectus,
and is duly qualified and in good standing as a foreign corporation
authorized to do business in each jurisdiction described in Schedule
3 in which the ownership, leasing and operation of its property and
the conduct of its business requires such qualification (except
where the failure to be so qualified and in good standing could not
have a Material Adverse Effect).
18
(ii) The entities listed on Schedule 2 hereto are the only
subsidiaries, direct or indirect, and Affiliates of the Company.
Except as otherwise set forth in the Prospectus, the Company owns,
directly or indirectly through other subsidiaries, the percentage
indicated on Schedule 2 of the outstanding capital stock or other
securities evidencing equity ownership of such subsidiaries, free
and clear of any security interest and, to the knowledge of such
counsel, any claim, lien, limitation on voting rights or
encumbrance; and all of such securities have been duly authorized,
validly issued, are fully paid and nonassessable and were not issued
in violation of any preemptive or similar rights. There are no
outstanding subscriptions, rights, warrants, calls, commitments of
sale or options to acquire, or instruments convertible into or
exchangeable for, any such shares of capital stock or other equity
interest of such subsidiaries owned by the Company.
(iii) The Company has all requisite corporate power and
authority to execute, deliver and perform its obligations under the
Transaction Agreements and the Securities and to consummate the
transactions contemplated hereby or thereby, including, without
limitation, the corporate power and authority to issue, sell and
deliver the Securities as provided herein.
(iv) The Company had an authorized capitalization as of
_________, 2003 as set forth in the Prospectus.
(v) To such counsel's knowledge, neither the Company nor any
of its Significant Subsidiaries which are incorporated in the United
States is (i) in violation of its respective charter or bylaws, (ii)
is in default in the performance of any obligation, agreement or
condition contained in any material bond, debenture, note or any
other evidence of indebtedness or in any other instrument,
indenture, mortgage, deed of trust, retrocessional treaty or
arrangement, or other material agreement to which it is a party or
by which it is bound or to which any of its properties is subject or
(iii) is in violation of any Massachusetts or United States federal
law, statute, rule, regulation, judgment or court decree applicable
to the Company or its Significant Subsidiaries which are
incorporated in the United States, except in the case of clauses
(ii) and (iii) for any such violation or default which would not
have a Material Adverse Effect.
(vi) The execution, delivery and performance by the Company of
the Transaction Agreements, the issuance and sale of the Securities
and the compliance by the Company with all of the provisions of the
Transaction Agreements will not violate or constitute a breach of
any of the terms or provisions of, or a default under (or an event
that with notice or the lapse of time, or both, would constitute a
default), or require consent under, or result in the imposition of a
lien or encumbrance on any properties of the Company or any of its
Significant Subsidiaries which are incorporated in the United
States, or an acceleration of indebtedness pursuant to, (i) the
charter or bylaws of the Company or any of its Significant
Subsidiaries which are incorporated in the United States, (ii) any
bond, debenture, note, indenture, mortgage, deed of trust or other
agreement or instrument known to such counsel to which the Company
or any of
19
its Significant Subsidiaries which are incorporated in the United
States is a party or by which any of them or their property is or
may be bound, (iii) any United States federal or Massachusetts
statute, rule or regulation reasonably recognized by such counsel as
applicable to transactions of this kind, or (iv) any judgment, order
or decree known to such counsel of any United States federal or
Massachusetts court or governmental agency or authority having
jurisdiction over the Company, any of its Significant Subsidiaries
which are incorporated in the United States or their assets or
properties except for any such violations, breaches or defaults
which would have a Material Adverse Effect and except for such
consents as may have been obtained by the Company or such consents
or filings as may be required under state or foreign securities or
Blue Sky laws and regulations or such as may be required by the
NASD. No consent, approval, authorization or order of, or filing,
registration, qualification, license or permit of or with, any
governmental agency, body, administrative agency or, to the
knowledge of such counsel, any court, is required for the execution
and delivery, the issuance and sale of the Securities compliance by
the Company with all of the provisions of the Transaction
Agreements, except such as (i) would not have a Material Adverse
Effect, (ii) would not prohibit or adversely affect the issuance of
the Securities or (iii) may be required under the Securities Act and
state or foreign securities or Blue Sky laws and regulations or such
as may be required by the NASD. No consents or waivers from any
other person are required for the execution and delivery of the
Transaction Agreements, the issuance and sale of the Securities and
the compliance by the Company with all of the provisions of the
Transaction Agreements, other than such consents and waivers which
the failure to obtain (i) would not have a Material Adverse Effect
or (ii) would not prohibit or adversely affect the issuance of the
Securities or which have been obtained.
(vii) To the best knowledge of such counsel, the Company and
each of its Significant Subsidiaries which are incorporated in the
United States has (i) all Authorizations necessary to engage in the
business currently conducted by it in the manner described in the
Prospectus, except where failure to hold such Authorizations would
not have a Material Adverse Effect and (ii) no reason to believe
that any governmental body or agency is considering limiting,
suspending or revoking any such Authorization. To the best knowledge
of such counsel and except as would not have a Material Adverse
Effect, all such Authorizations are valid and in full force and
effect and the Company and its Significant Subsidiaries which are
incorporated in the United States are in compliance in all material
respects with the terms and conditions of all such Authorizations
and with the rules and regulations of the regulatory authorities
having jurisdiction with respect thereto. Except as described in the
Prospectus, no insurance regulatory agency or body has issued any
order or decree impairing, restricting or prohibiting the payment of
dividends by any Significant Subsidiary which are incorporated in
the United States of the Company to its parent, other than any such
orders or decrees the issuance of which could not have a Material
Adverse Effect.
20
(viii) The Incorporated Documents or any further amendment or
supplement thereto made by the Company prior to the Delivery Date
(other than the financial statements, notes and schedules or any
other financial or accounting data included or incorporated by
reference in or omitted from the Incorporated Documents, as to which
such counsel need express no opinion), when they were filed with the
Commission and as of the Delivery Date, complied and comply, as the
case may be, as to form in all material respects with the
requirements of the Exchange Act.
In addition, such counsel shall state that he has participated in
conferences with other officers and other representatives of the Company,
representatives of Ernst & Young LLP, PricewaterhouseCoopers LLP, the
Underwriters and their counsel in connection with the preparation of the
Registration Statements and the Prospectus at which conferences the
contents of the Registration Statements and the Prospectus were discussed,
reviewed and revised. Although such counsel is not passing upon, and does
not assume responsibility for, the accuracy, completeness or fairness of
such statements and has not made any independent investigation thereof
(except as indicated above), on the basis of the information which was
developed in the course thereof, such counsel will advise the Underwriters
that such counsel has no reason to believe that (i) the Registration
Statement, on the Effective Date, contained an untrue statement of
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading and
(ii) the Prospectus, at the time such Prospectus was circulated and on the
Delivery Date, contained or contains an untrue statement of a material
fact or omitted or omits to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. Such counsel
need not express any view as to the financial statements, notes and
schedules or any other financial or accounting data included or
incorporated by reference in or omitted from the Registration Statement
and the Prospectus.
The opinions of such counsel described in this paragraph shall be
rendered to the Underwriters at the request of the Company and shall so
state therein. Such opinions may contain customary recitals, conditions
and qualifications.
(f) Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP shall have furnished to
the Underwriters its written opinion, as special New York counsel to the
Company addressed to the Underwriters and dated the Delivery Date, in form
and substance reasonably satisfactory to the Underwriters, substantially
to the effect that:
(i) The Indenture has been duly authorized, executed and
delivered by the Company and, assuming due authorization, execution
and delivery thereof by the Trustee, constitutes a valid and binding
obligation of the Company, enforceable against the Company in
accordance with its terms.
(ii) The Securities have been duly authorized by the Company
and, assuming due authentication thereof by the Trustee, and upon
payment for and delivery thereof in accordance with this Agreement,
the Securities will be valid
21
and binding obligations of the Company, enforceable against the
Company in accordance with their terms and entitled to the benefits
of the Indenture.
(iii) The execution and delivery by the Company of the
Transaction Agreements, the issuance and sale of the Securities by
the Company and the compliance by the Company with all of the
provisions of the Transaction Agreements will not conflict with or
result in a breach or violation of any New York statute or any
order, rule or regulation reasonably recognized by such counsel as
applicable to transaction of this kind or, to the knowledge of any
such counsel, any order of any New York court or governmental agency
or body having jurisdiction over the Company or any of its
subsidiaries or any of their properties or assets, except for such
conflicts, breaches or violation that would not be reasonably
expected to result in a Material Adverse Effect.
(iv) No consent, approval, authorization, order, license,
registration or qualification of or with any New York governmental
agency or body is required for the sale of the Securities by the
Company or the compliance by the Company with all of the provisions
of the Transaction Agreements, except such consents, approvals,
authorizations, orders, licenses, registrations or qualifications
which have been obtained or made or as may be required under state
securities or Blue Sky Laws in connection with the purchase and
distribution of the Securities by the Underwriters.
The opinions described in paragraph numbers (i) and (ii) above may
be subject to the effect of applicable bankruptcy, insolvency, fraudulent
transfer, reorganization, receivership, moratorium, arrangement and
assignment for the benefit of creditors laws, and other similar laws
relating to or affecting the rights and remedies of creditors generally.
The opinions may also be subject to the effect of general principles of
equity, whether applied by a court of law or equity. Such opinions may
also be subject to the qualification that the enforceability of any
indemnification or contribution provisions set forth in any documents or
agreements referred to herein may be limited by United States federal or
state securities laws or by public policy. The opinions of such counsel
described in this paragraph shall be rendered to the Underwriters at the
request of the Company and shall so state therein.
(g) [Reserved]
(h) Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, shall have furnished to the
Underwriters its written opinion, as counsel to the Underwriters,
addressed to the Underwriters and dated the Delivery Date, in form and
substance reasonably satisfactory to the Underwriters.
(i) By the date hereof and on the Delivery Date, Ernst & Young LLP
shall have furnished to the Underwriters its letters, in form and
substance satisfactory to the Underwriters, containing statements and
information of the type customarily included in accountants' initial and
bring-down "comfort letters" to underwriters with respect to the
22
financial statements and certain financial information contained and
incorporated by reference in the Registration Statement and the
Prospectus.
(j) By the date hereof and on the Delivery Date,
PricewaterhouseCoopers LLP shall have furnished to the Underwriters its
letters, in form and substance satisfactory to the Underwriters,
containing statements and information of the type customarily included in
accountants' initial and bring-down "comfort letters" to underwriters with
respect to the financial statements and certain financial information
contained and incorporated by reference in the Registration Statement and
the Prospectus.
(k) The Company shall have furnished to the Underwriters a
certificate, dated the Delivery Date, of its President or any Executive or
Senior Vice President and its principal financial or accounting officer
stating, in the name of and in their capacity as officers of the Company,
that:
(i) The representations, warranties and agreements of the
Company in Section 1 are true and correct in all material respects
as of the Delivery Date, except for those representations and
warranties that address matters as of a particular date, which
representation and warranties shall be accurate in all material
respects as of such date; the Company has complied with in all
material respects all its agreements contained herein to be
performed prior to or on the Delivery Date; and the conditions set
forth in Section 7(a) have been fulfilled.
(ii) (A) Neither the Company nor any of its subsidiaries has
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus any material
loss or interference with its business from (I) any governmental or
regulatory action, notice, order or decree of a regulatory authority
or (II) fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court, in each
case, otherwise than as set forth in the Prospectus; (B) since such
date there has not been any material change in the capital stock,
short-term debt or long-term debt of the Company or any of its
subsidiaries or any change, or any development involving a
prospective change, in or affecting the general affairs, management,
financial position, stockholders' equity or results of operations of
the Company and its subsidiaries taken as a whole, otherwise than as
set forth or contemplated in the Prospectus; and (C) the Company has
not declared or paid any dividend on its capital stock, except for
dividends declared in the ordinary course of business and consistent
with past practice, otherwise than as set forth in the Prospectus
and, except as set forth or contemplated in the Prospectus, neither
the Company nor any of its subsidiaries has entered into any
transaction or agreement (whether or not in the ordinary course of
business) material to the Company and its subsidiaries taken as a
whole.
(iii) They have carefully examined the Registration Statement
and the Prospectus and, in their opinion (A) the Registration
Statement, as of the Effective Date, did not include any untrue
statement of a material fact and did not omit to state a material
fact required to be stated therein or necessary to make the
23
statements therein not misleading, (B) the Prospectus, as of the
date hereof and as of the Delivery Date, did not include any untrue
statement of a material fact and did not omit to state a material
fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading and (C) since the Effective Date, no
event has occurred which should have been set forth in a supplement
or amendment to the Registration Statement or the Prospectus.
(l) The Indenture, in form and substance satisfactory to the
Underwriters, shall have been duly executed and delivered by the Company
and the Trustee, and the Securities shall have been duly executed and
delivered by the Company and duly authenticated by the Trustee.
(m) On or prior to the Delivery Date, counsel to the Underwriters
shall have been furnished with such documents as they may reasonably
require for the purpose of enabling them to pass upon the issuance and
sale of the Securities as herein contemplated and related proceedings or
in order to evidence the accuracy and completeness of any of the
representations and warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company in
connection with the issuance and sale of the Securities as herein
contemplated shall be satisfactory in form and substance to the
Underwriters and their counsel.
(n) Neither the Company nor any of its subsidiaries (i) shall have
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree, otherwise than as set
forth or contemplated in the Prospectus or (ii) since such date there
shall not have been any change in the capital stock, short-term debt or
long-term debt of the Company or any of its subsidiaries or any change, or
any development involving a prospective change, in or affecting the
general affairs, management, financial position, prospects, stockholders'
equity or results of operations of the Company and its subsidiaries,
otherwise than as set forth or contemplated in the Prospectus, the effect
of which, in any such case described in clause (i) or (ii), is, in the
reasonable judgment of the Lead Underwriters, so material and adverse as
to make it impracticable or inadvisable to proceed with the offering or
the delivery of the Securities being delivered on the Delivery Date on the
terms and in the manner contemplated in the Prospectus.
(o) Subsequent to the execution and delivery of this Agreement, (i)
no downgrading shall have occurred in the rating accorded the Company's
debt securities by any "nationally recognized statistical rating
organization", as that term is defined by the Commission for purposes of
Rule 436(g)(2) of the Securities Act and (ii) no such organization shall
have publicly announced or privately communicated to the Company that it
has under surveillance or review, with possible negative implications, its
rating of any of the Company's debt securities.
24
(p) Subsequent to the execution and delivery of this Agreement,
there shall not have occurred any of the following: (i) trading in
securities generally on the New York Stock Exchange, the American Stock
Exchange, the Nasdaq National Market or the over-the-counter market, or
trading in any securities of the Company on any exchange shall have been
suspended, the settlement of such trading generally shall have been
materially disrupted or minimum prices shall have been established on any
such exchange or market by the Commission, by such exchange or by any
other regulatory body or governmental authority having jurisdiction, (ii)
a banking moratorium shall have been declared by United States federal or
state authorities, (iii) the United States shall have become engaged in
hostilities, there shall have been an escalation in hostilities involving
the United States, or there shall have been a declaration of a national
emergency or war by the United States, or (iv) there shall have occurred a
material adverse change in general domestic or international economic,
political or financial conditions, including, without limitation, as a
result of terrorist activities, or the effect of international conditions
on the financial markets in the United States shall be such, as to make it
in the reasonable judgment of the Lead Underwriters, impracticable or
inadvisable to proceed with the public offering or delivery of the
Securities being delivered on the Delivery Date on the terms and in the
manner contemplated in the Prospectus.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel to the Underwriters. No opinion shall state that it is to be governed
or qualified by, or that it is otherwise subject to, any treatise, written
policy or other document relating to legal opinions, including, without
limitation, the Legal Opinion Accord of the ABA Section of Business Law (1991).
All opinions shall state that they may be relied upon by Xxxxxxx Xxxxxxx &
Xxxxxxxx LLP as to matters of law (other than New York and United States federal
law) in rendering the opinion referred to in (h) above.
8. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless each Underwriter,
its directors, officers and employees and each person, if any, who
controls any Underwriter within the meaning of the Securities Act, from
and against any loss, claim, damage or liability, joint or several, or any
action in respect thereof (including, but not limited to, any loss, claim,
damage, liability or action relating to purchases and sales of the
Securities), to which that Underwriter, director, officer, employee or
controlling person may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action arises
out of, or is based upon, (i) any untrue statement or alleged untrue
statement of a material fact contained in any (A) Preliminary Prospectus,
the Registration Statement, the Prospectus or in any amendment or
supplement thereto, or (B) any Blue Sky application or other document
prepared or executed by the Company (or based upon any written information
furnished by the Company) filed in any jurisdiction specifically for the
purpose of qualifying any or all of the Securities under the securities
laws of any state or other jurisdiction (such application, document or
information being hereinafter called a "BLUE SKY APPLICATION") or (ii) the
omission or alleged omission to state in any Preliminary Prospectus, the
Registration Statement, the
25
Prospectus or in any amendment or supplement thereto, or in any Blue Sky
Application, any material fact required to be stated therein or necessary
to make the statements therein not misleading; and shall reimburse each
Underwriter and each such director, officer, employee or controlling
person promptly upon demand for any legal or other expenses reasonably
incurred by that Underwriter, director, officer, employee or controlling
person in connection with investigating or defending or preparing to
defend against any such loss, claim, damage, liability or action as such
expenses are incurred; provided, however, that the Company shall not be
liable in any such case to the extent that any such loss, claim, damage,
liability or action arises out of, or is based upon, any untrue statement
or alleged untrue statement or omission or alleged omission made in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or
in any such amendment or supplement, in reliance upon and in conformity
with the written information concerning that Underwriter furnished to the
Company through the Lead Underwriters by or on behalf of any Underwriter
concerning that Underwriter specifically for inclusion therein which
information consists solely of the information set forth in Section 8(e);
and provided further, that the Company shall not be liable to indemnify
any Underwriter or any person who controls such Underwriter on account of
any such loss, liability, claim, damage or expense arising out of any such
defect or alleged defect in any Preliminary Prospectus or Prospectus if a
copy of the Prospectus (exclusive of the Incorporated Documents), as
amended or supplemented, shall not have been given or sent by such
Underwriter, if required by law to do so, with or prior to the written
confirmation of the sale involved to the extent that (i) the Prospectus,
as amended or supplemented, would have cured such defect or alleged defect
and (ii) sufficient quantities of the Prospectus, as amended or
supplemented, were made available to such Underwriter to allow it to
deliver such Prospectus on a timely basis. The foregoing indemnity
agreement is in addition to any liability which the Company may otherwise
have to any Underwriter or to any director, officer, employee or
controlling person of that Underwriter.
(b) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless, the Company, its officers and employees, each of its
directors, and each person, if any, who controls the Company within the
meaning of the Securities Act from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which
the Company or any such director, officer, employee or controlling person
may become subject, under the Securities Act or otherwise, insofar as such
loss, claim, damage, liability or action arises out of, or is based upon,
(i) any untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement or the
Prospectus or in any amendment or supplement thereto, or in any Blue Sky
Application or (ii) the omission or alleged omission to state in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or
in any amendment or supplement thereto or in any Blue Sky Application, any
material fact required to be stated therein or necessary to make the
statements therein not misleading, but in each case only to the extent
that the untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with the
written information furnished to the Company through the Lead Underwriters
by or on behalf of that Underwriter specifically for inclusion therein and
described in Section 8(e), and shall reimburse the Company and any such
director, officer, employee or controlling person promptly upon demand for
any legal or other expenses reasonably incurred by the
26
Company or any such director, officer, employee or controlling person in
connection with investigating or defending or preparing to defend against
any such loss, claim, damage, liability or action as such expenses are
incurred; provided, however, that in no case shall any Underwriter be
liable or responsible for any amount in excess of the underwriting
discount applicable to the Securities to be purchased by such Underwriter
hereunder. The foregoing indemnity agreement is in addition to any
liability which any Underwriter may otherwise have to the Company or any
such director, officer, employee or controlling person.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under this Section 8, notify the
indemnifying party in writing of the claim or the commencement of that
action; provided, however, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have under this
Section 8 except to the extent it has been materially prejudiced by such
failure and, provided, further, that the failure to notify the
indemnifying party shall not relieve it from any liability which it may
have to an indemnified party otherwise than under this Section 8. If any
such claim or action shall be brought against an indemnified party, and it
shall notify the indemnifying party thereof, the indemnifying party shall
be entitled to participate therein and, to the extent that it wishes,
jointly with any other similarly notified indemnifying party, to assume
the defense thereof with counsel satisfactory to the indemnified party.
After notice from the indemnifying party to the indemnified party of its
election to assume the defense of such claim or action, the indemnifying
party shall not be liable to the indemnified party under this Section 8
for any legal or other expenses subsequently incurred by the indemnified
party in connection with the defense thereof other than reasonable costs
of investigation; provided, however, that the Underwriters shall have the
right to employ separate counsel to represent jointly the Underwriters and
their respective directors, officers, employees and controlling persons
who may be subject to liability arising out of any claim in respect of
which indemnity may be sought by the Underwriters against the Company
under this Section 8 if, in the reasonable judgment of counsel to such
Underwriters, it is advisable for such Underwriters, directors, officers,
employees and controlling persons to be jointly represented by separate
counsel, due to the availability of one or more legal defenses to them
which are different from or additional to those available to the
indemnifying party, and in that event the reasonable fees and expenses of
such separate counsel shall be paid by the Company, provided further, that
the Company shall not be liable for the fees and expenses of more than one
separate firm of attorneys (in addition to one local counsel in each
relevant jurisdiction) at any time for all such indemnified parties. No
indemnifying party shall, (i) without the prior written consent of the
indemnified parties (which consent shall not be unreasonably withheld)
settle or compromise or consent to the entry of any judgment with respect
to any pending or threatened claim, action, suit or proceeding in respect
of which indemnification or contribution may be sought hereunder (whether
or not the indemnified parties are actual or potential parties to such
claim or action) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising
out of such claim, action, suit or proceeding, or (ii) be liable for any
settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with its
written consent
27
or if there be a final judgment of the plaintiff in any such action, the
indemnifying party agrees to indemnify and hold harmless any indemnified
party from and against any loss or liability by reason of such settlement
or judgment.
(d) If the indemnification provided for in this Section 8 shall for
any reason be unavailable or insufficient to hold harmless an indemnified
party under Section 8(a) or 8(b) in respect of any loss, claim, damage or
liability, or any action in respect thereof, referred to therein, other
than to the extent that such indemnification is unavailable or
insufficient due to a failure to provide prompt notice in accordance with
Section 8(c), then each indemnifying party shall, in lieu of indemnifying
such indemnified party, contribute to the amount paid or payable by such
indemnified party as a result of such loss, claim, damage or liability, or
action in respect thereof, (i) in such proportion as shall be appropriate
to reflect the relative benefits received by the Company on the one hand
and the Underwriters on the other from the offering of the Securities or
(ii) if the allocation provided by clause 8(d)(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 8(d)(i) but also the
relative fault of the Company on the one hand and the Underwriters on the
other with respect to the statements or omissions or alleged statements or
alleged omissions that resulted in such loss, claim, damage or liability,
or action in respect thereof, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one
hand and the Underwriters on the other with respect to such offering shall
be deemed to be in the same proportion as the total net proceeds from the
offering of the Securities purchased under this Agreement (before
deducting expenses) received by the Company, on the one hand, and the
total underwriting discounts and commissions realized or received by the
Underwriters with respect to the Securities purchased under this
Agreement, on the other hand, bear to the total gross proceeds from the
offering of the Securities under this Agreement, in each case, as set
forth in the table on the cover page of the Prospectus. The relative fault
shall be determined by reference to whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the Company or the
Underwriters, the intent of the parties and their relative 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 the amount of contributions pursuant to this Section
8(d) were to be determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other
method of allocation, which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an
indemnified party as a result of the loss, claim, damage or liability, or
action in respect thereof, referred to above in this Section 8(d) shall be
deemed to include, for purposes of this Section 8(d), any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 8(d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the discounts and
commissions applicable to the Securities underwritten by it and
distributed to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any 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
28
Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The Underwriters'
obligations to contribute as provided in this Section 8(d) are several in
proportion to their respective underwriting obligations and not joint.
(e) The Underwriters severally confirm and the Company acknowledges
that the statements with respect to the offering of the Securities by the
Underwriters set forth in the [ ] paragraph on the cover page and in the [
], [ ] and [ ] paragraphs under the caption "Underwriting" in the
Prospectus are correct and constitute the only information concerning such
Underwriters furnished in writing to the Company through the Lead
Underwriters by or on behalf of the Underwriters specifically for
inclusion in the Prospectus and the Underwriters severally confirm that
such statements are accurate and complete.
9. Defaulting Underwriters. If, on the Delivery Date, any
Underwriter defaults in the performance of its obligations under this Agreement,
the remaining nondefaulting Underwriters shall be obligated to purchase the
principal amount of Securities which the defaulting Underwriter agreed but
failed to purchase on the Delivery Date in the respective proportions which the
principal amount of the Securities set forth opposite the name of each remaining
non-defaulting Underwriter in Schedule 1 hereto bears to the aggregate principal
amount of Securities set forth opposite the names of all the remaining
non-defaulting Underwriters in Schedule 1 hereto; provided, however, that the
remaining non-defaulting Underwriters shall not be obligated to purchase any of
the Securities on the Delivery Date if the total aggregate principal amount of
the Securities which the defaulting Underwriter or Underwriters agreed but
failed to purchase on such date exceeds 10% of the aggregate principal amount of
the Securities to be purchased on the Delivery Date, and any remaining
nondefaulting Underwriter shall not be obligated to purchase more than 110% of
the aggregate principal amount of the Securities which it agreed to purchase on
the Delivery Date pursuant to the terms of Section 2. If the foregoing maximums
are exceeded, the remaining non-defaulting Underwriters, or those other
underwriters satisfactory to the Lead Underwriters who so agree, shall have the
right, but shall not be obligated, to purchase, in such proportion as may be
agreed upon among them, the total aggregate principal amount of Securities to be
purchased on the Delivery Date. If the remaining Underwriters or other
underwriters satisfactory to the Lead Underwriters do not elect to purchase on
the Delivery Date the aggregate principal amount of Securities which the
defaulting Underwriter or Underwriters agreed but failed to purchase on the
Delivery Date, this Agreement shall terminate without liability on the part of
any non-defaulting Underwriter and the Company, except that the Company will
continue to be liable for the payment of expenses to the extent set forth in
Sections 6 and 11. As used in this Agreement, the term "Underwriter" includes,
for all purposes of this Agreement unless the context requires otherwise, any
party not listed in Schedule 1 hereto who, pursuant to this Section 9, purchases
which a defaulting Underwriter agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of
any liability it may have to the Company for damages caused by its default. If
other underwriters are obligated or agree to purchase the Securities of a
defaulting or withdrawing Underwriter, either the Lead Underwriters or the
Company may postpone the Delivery Date for up to seven full business days
29
in order to effect any changes that, in the opinion of counsel to the Company or
counsel to the Underwriters, may be necessary in the Prospectus or in any other
document or arrangement.
10. Termination. The obligations of the Underwriters hereunder may
be terminated by the Underwriters by notice given to and received by the Company
prior to delivery of and payment for the Securities if, prior to that time, any
of the events described in Sections 7(n), 7(o) or 7(p) shall have occurred or if
the Underwriters shall decline to purchase the Securities for any reason
permitted under this Agreement.
11. Reimbursement of Underwriters' Expenses. If (a) the Company
shall fail to tender the Securities for delivery to the Underwriters by reason
of any failure, refusal or inability on the part of the Company to perform any
agreement on its part to be performed, or because any other condition of the
Underwriters' obligations hereunder required to be fulfilled by the Company
(including, without limitation, with respect to the transactions other than as a
result of the condition described in Section 7(p)) is not fulfilled or (b) the
Underwriters shall decline to purchase the Securities for any reason permitted
under this Agreement (including the termination of this Agreement pursuant to
Section 10, the Company shall reimburse the Underwriters for all reasonable
documented out-of-pocket expenses (including fees and disbursements of counsel)
incurred by the Underwriters in connection with this Agreement and the proposed
purchase of the Securities, and upon demand the Company shall pay the full
amount thereof to the Underwriters. If this Agreement is terminated pursuant to
Section 9 by reason of the default of one or more Underwriters, the Company
shall not be obligated to reimburse any defaulting Underwriter on account of
those expenses.
12. Notices, etc. Notices given pursuant to any provision of this
Agreement shall be given in writing and shall be addressed as follows:
(a) if to the Underwriters, to Bear, Xxxxxxx & Co. Inc., 000 Xxxxxxx
Xxxxxx, Xxx Xxxx, XX 00000; Attention: Xxxxxx Xxxxxxxxx (Fax No.: (917)
849-0608); and to Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, 0
Xxxxx Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention: [ ] (Fax No.: [ ]);
and
(b) if to the Company to, 000 Xxxx Xxxxxx, Xxxxxxx, XX 00000,
Attention: _______ (Fax No.: (000) 000-0000); and
with a copy to Issuer's Counsel Xxxxxx, XxXxxxxxx & Fish, LLP,
000 Xxxxxxx Xxxxxxxxx, Xxxxxx, XX 00000; Attention: Xxxxxxx X. Xxxxx (Fax
No. (000) 000-0000);
provided, however, that any notice to an Underwriter pursuant to Section 8(c)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to Bear, Xxxxxxx &
Co. Inc. or Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, as the case may
be, which address will be supplied to any other party hereto by Bear, Xxxxxxx &
Co. Inc. or Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated and as the case
may be, upon request. Any such statements, requests, notices or agreements shall
take effect at the time of receipt thereof. The Company shall be entitled to act
and rely upon any request,
30
consent, notice or agreement given or made on behalf of the Underwriters by the
Lead Underwriters on behalf of the Underwriters.
13. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Underwriters, the Company, and
their respective successors. This Agreement and the terms and provisions hereof
are for the sole benefit of only those persons, except that (A) the
representations, warranties, indemnities and agreements of the Company contained
in this Agreement shall also be deemed to be for the benefit of the officers,
directors and employees of the Underwriters and the person or persons, if any,
who control any Underwriter within the meaning of Section 15 of the Securities
Act and (B) any indemnity agreement of the Underwriters contained in this
Agreement shall be deemed to be for the benefit of directors, officers and
employees of the Company, and any person controlling the Company within the
meaning of Section 15 of the Securities Act. Nothing contained in this Agreement
is intended or shall be construed to give any person, other than the persons
referred to in this Section 13, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained herein.
14. Survival. The respective indemnities, representations,
warranties and agreements of the Company and the Underwriters contained in this
Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall survive the delivery of and payment for the Securities and
shall remain in full force and effect, regardless of any termination or
cancellation of this Agreement or any investigation made by or on behalf of any
of them or any person controlling any of them.
15. Definition of the term "Business Day." For purposes of this
Agreement, "BUSINESS DAY" means any day on which the New York Stock Exchange is
open for trading.
16. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.
17. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
18. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
[The rest of this page has been left blank intentionally;
the signature page follows.]
If the foregoing correctly sets forth the agreement between the Company
and the Underwriters, please indicate your acceptance in the space provided for
that purpose below.
Very truly yours,
THE COMMERCE GROUP, INC.
By:____________________________________
Name:
Title:
Accepted and agreed by:
Bear, Xxxxxxx & Co. Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
For themselves and the other Underwriters
named in Schedule 1 hereto
By Bear, Xxxxxxx & Co. Inc.
By:_______________________________________
Authorized Representative
By: Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
By:_______________________________________
Authorized Representative
SCHEDULE 1
AGGREGATE PRINCIPAL
AMOUNT OF SECURITIES TO
UNDERWRITER BE PURCHASED
----------- ------------
Bear, Xxxxxxx & Co. Inc............................................................. $
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated.........................................................
[____________________________]......................................................
[____________________________]......................................................
[____________________________]......................................................
[____________________________]...................................................... ------------
Total...................................................................... $300,000,000
============
SCHEDULE 2
LIST OF SUBSIDIARIES AND AFFILIATES OF
THE COMMERCE GROUP, INC.
AS OF NOVEMBER __, 2003
COMPANY OWNERSHIP PERCENTAGE
------- --------------------
Commerce Holdings Inc. 100%
The Commerce Insurance Company 100%
Commerce West Insurance Company 100%
ACIC Holding Co., Inc. 95%
American Commerce Insurance Company 95%
Citation Insurance Company 100%
Bay Finance Company, Inc. 100%
Xxxxx-Xxxxx Insurance Agency, Inc. 100%
SCHEDULE 3
JURISDICTIONS OF FOREIGN QUALIFICATION
