1
CINCINNATI XXXX INC.
2,000,000 Common Shares*
(par value $1.00 per share)
UNDERWRITING AGREEMENT
New York, New York
November __, 1996
Xxxxxx Xxxxxxx & Co. Incorporated
Salomon Brothers Inc
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxxx & Co. International Limited
Salomon Brothers International Limited
c/o Morgan Xxxxxxx & Co. International Limited
00 Xxxxx Xxxxxx
Xxxxxx Xxxxx
Xxxxxx X00 0XX
England
Ladies and Gentlemen:
The Cincinnati Xxxx Pension Plans Trust (the "Pension Trust")
proposes to sell to the several Underwriters (as defined below) 2,000,000 common
shares, par value $1.00 per share (the "Firm Shares"), of Cincinnati Xxxx Inc.,
an Ohio corporation ("CBI").
It is understood that, subject to the conditions hereinafter
stated, 1,600,000 Firm Shares (the "U.S. Firm Shares") will be sold to the
several U.S. Underwriters named in Schedule I hereto (the "U.S. Underwriters")
in connection with the offering and sale of such U.S. Firm Shares in the United
States and Canada to United States and Canadian Persons (as such terms are
defined in the Agreement Between U.S. and International Underwriters of even
date herewith), and 400,000 Firm Shares (the "International Shares") will be
sold to the several International Underwriters named in Schedule II hereto (the
"International Underwriters") in connection with the offering and sale of such
International Shares outside the United States and
-----------------
* Plus an option to purchase from the Cincinnati Xxxx Pension Plans Trust up
to 300,000 additional Common Shares to cover over-allotments.
2
Canada to persons other than United States and Canadian Persons. Xxxxxx Xxxxxxx
& Co. Incorporated and Salomon Brothers Inc shall act as representatives (the
"U.S. Representatives") of the several U.S. Underwriters, and Xxxxxx Xxxxxxx &
Co. International Limited and Salomon Brothers International Limited shall act
as representatives (the "International Representatives") of the several
International Underwriters. The U.S. Underwriters and the International
Underwriters are hereinafter collectively referred as to the "Underwriters." The
U.S. Representatives and the International Representatives are collectively
referred to as the "Representatives."
The Pension Trust also proposes to sell to the several U.S.
Underwriters not more than an additional 300,000 common shares, par value $1.00
per share (the "Option Shares"), if and to the extent that the U.S.
Representatives shall have determined to exercise, on behalf of the U.S.
Underwriters, the right to purchase such shares of common stock granted to the
U.S. Underwriters in Section 2 hereof. The Firm Shares and the Option Shares are
hereinafter collectively referred to as the "Shares." The common shares, par
value $1.00 per share, of CBI (including the shares to be outstanding after
giving effect to the sales of Shares contemplated hereby) are hereinafter
referred to as the "CBI Common Stock."
It is further understood by the parties hereto that Salomon
Inc ("Salomon") and CBI are concurrently entering into a separate underwriting
agreement dated the date hereof (the "DECS Underwriting Agreement") with the
group of underwriters named therein, which provides for the sale by Salomon to
such underwriters of 3,000,000 DECSSM (Debt Exchangeable for Common StockSM)
consisting of its _____ % Exchangeable Notes Due February 1, 2001 (the "DECS"),
plus up to an additional 450,000 DECS solely to cover over-allotments. At
maturity (including as a result of acceleration or otherwise), the DECS may be
mandatorily exchanged by Salomon into CBI Common Stock (or, at Salomon's option,
cash with an equal value).
In connection with the foregoing and pursuant to the
Registration Rights Agreement dated as of July 22, 1988 between CBI and the
parties named therein and the letter agreements dated January 30, 1984 and
January 29, 1988, respectively, between CBI and Bankers Trust Company
(collectively, the "Registration Rights Agreements"), CBI has filed with the
Commission a registration statement with respect to (i) 3,000,000 shares (the
"Firm DECS Shares") of CBI Common Stock, in respect of the Firm DECS, plus an
additional 450,000 shares (the "Option DECS Shares;" the Option DECS Shares,
together with the Firm DECS Shares, being hereinafter called the "DECS Shares")
of CBI Common Stock, in respect of the Option DECS, for delivery by Salomon
pursuant to the DECS and (ii) the Shares, which registration statement is
referred to in Section 1(a)(i) of this Agreement.
Certain terms used in this Agreement are defined in paragraph
(a)(iii) of Section 1.
1. Representations and Warranties.
(a) Representations and Warranties of CBI. CBI represents and
warrants to, and agrees with, each Underwriter and the Pension Trust as
set forth below in this Section 1(a).
2
3
(i) CBI meets the requirements for use of Form S-3 under the
Securities Act of 1933 (the "Act") and has filed with the Securities
and Exchange Commission (the "Commission") a registration statement
(file number 333-13699) on such Form, including a related preliminary
prospectus, for the registration under the Act of the offering and sale
of the DECS Shares in connection with the offering and sale of the DECS
and an alternate form of related preliminary prospectus, for
registration under the Act of the offering and sale of the Shares. CBI
may have filed one or more amendments thereto, including the related
preliminary prospectuses, each of which amendments has previously been
furnished to the Representatives. CBI will next file with the
Commission one of the following: (A) prior to effectiveness of such
registration statement, a further amendment to such registration
statement, including the final forms of such prospectuses, (B) such
final prospectuses in accordance with Rules 430A and 424(b)(1) or (4)
or (C) such final prospectuses in accordance with Rules 415 and
424(b)(2) or (5). In the case of clause (B), CBI has included in such
registration statement, as amended at the CBI Effective Date, all
information (other than CBI Rule 430A Information) required by the Act
and the rules thereunder to be included in such prospectuses with
respect to the DECS Shares, the Shares and the offering thereof. As
filed, such amendment and final forms of prospectuses, or such final
prospectuses, shall contain all CBI Rule 430A Information, together
with all other such required information, with respect to the DECS
Shares, the Shares and the offering thereof and, except to the extent
the Representatives shall agree in writing to a modification, shall be
in all substantive respects in the form furnished to the
Representatives prior to the Execution Time or, to the extent not
completed at the Execution Time, shall contain only such specific
additional information and other changes (beyond that contained in the
latest Preliminary CBI Prospectus) as CBI has advised the
Representatives, prior to the Execution Time, will be included or made
therein. If the Registration Statement contains the undertaking
specified by Regulation S-K Item 512(a), the Registration Statement, at
the Execution Time, meets the requirements to Rule 415(a)(1)(x).
(ii) On the CBI Effective Date, the CBI Registration Statement
did or will, and when the CBI Prospectus is first filed (if required)
in accordance with Rule 424(b) and on the Closing Date (as hereinafter
defined), the CBI Prospectus (and any supplement thereto) will, comply
in all material respects with the applicable requirements of the Act,
the Securities Exchange Act of 1934, as amended (the "Exchange Act")
and the respective rules thereunder; on the CBI Effective Date, the CBI
Registration Statement did not or will not contain any untrue statement
of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein not
misleading; and, on the CBI Effective Date, the CBI Prospectus, if not
filed pursuant to Rule 424(b), did not or will not, and on the date of
any filing pursuant to Rule 424(b) and on the Closing Date, the CBI
Prospectus (together with any supplement thereto) will not, include any
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
3
4
circumstances under which they were made, not misleading; provided,
however, that CBI makes no representations or warranties as to the
information contained in or omitted from the CBI Registration Statement
or the CBI Prospectus (or any supplement thereto) in reliance upon and
in conformity with information furnished in writing to CBI by or on
behalf of any Underwriter through the Representatives specifically for
inclusion in the CBI Registration Statement or the CBI Prospectus (or
any supplement thereto).
(iii) The terms which follow, when used in this Agreement,
shall have the meanings indicated. The term "CBI Effective Date" shall
mean each date that the CBI Registration Statement and any post-
effective amendment or amendments thereto became or become effective.
"Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto. "Preliminary CBI
Prospectus" shall mean any preliminary prospectus referred to in
paragraph (a)(i) of this Section 1, any preliminary prospectus included
in the CBI Registration Statement at the CBI Effective Date that omits
CBI Rule 430A Information and any preliminary prospectus relating to
the International Shares that is used in connection with the offering
and sale of the International Shares. "CBI DECS Prospectus" shall mean
the prospectus relating to the DECS Shares that is used in connection
with the offering and sale of the DECS and that is first filed pursuant
to Rule 424(b) after the Execution Time or, if no filing pursuant to
Rule 424(b) is required, shall mean the form of such final prospectus
relating to the DECS Shares included in the CBI Registration Statement
at the CBI Effective Date. "CBI Pension Trust Prospectus" shall mean
(i) the prospectus relating to the U.S. Firm Shares and the Option
Shares that is used in connection with the offering and sale of the
U.S. Firm Shares and the Option Shares and that is first filed pursuant
to Rule 424(b) after the Execution Time or, if no filing pursuant to
Rule 424(b) is required, shall mean the form of such final prospectus
included in the CBI Registration Statement at the CBI Effective Date
and (ii) the prospectus relating to the International Shares that is
used in connection with the offering and sale of the International
Shares. "CBI Prospectus" shall mean the CBI DECS Prospectus and the CBI
Pension Trust Prospectus. "CBI Registration Statement" shall mean the
registration statement referred to in paragraph (b)(i) of this Section
1, including incorporated documents, exhibits and financial statements,
as amended at the Execution Time (or, if not effective at the Execution
Time, in the form in which it shall become effective) and, in the event
any post-effective amendment thereto or a registration statement filed
with respect to the Shares pursuant to Rule 462(b) (or post-effective
amendment thereto) becomes effective prior to the Closing Date, shall
also mean such registration statement as so amended or such
registration (or amendment thereto) filed pursuant to Rule 462(b),
respectively. The term "CBI Registration Statement" shall include any
CBI Rule 430A Information deemed to be included therein at the CBI
Effective Date as provided by Rule 430A. "Rule 415," "Rule 424," "Rule
430A," "Rule 462" and "Regulation S-K" refer to such rules or
regulation under the Act. "CBI Rule 430A Information" means information
with respect to the DECS Shares and
4
5
the Shares permitted to be omitted from the CBI Registration Statement
when it becomes effective pursuant to Rule 430A. Any reference herein
to the CBI Registration Statement, any Preliminary CBI Prospectus or
the CBI Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item 12 of Form
S-3 which were filed under the Exchange Act on or before the CBI
Effective Date or the issue date of such Preliminary CBI Prospectus or
the CBI Prospectus, as the case may be; and any reference herein to the
terms "amend," "amendment" or "supplement" with respect to the CBI
Registration Statement, any Preliminary CBI Prospectus or the CBI
Prospectus shall be deemed to refer to and include the filing of any
document under the Exchange Act after the CBI Effective Date or the
issue date of any Preliminary CBI Prospectus or the CBI Prospectus, as
the case may be, deemed to be incorporated therein by reference.
(iv) CBI has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its
property and to conduct its business as described in the CBI Prospectus
and is duly qualified to transact business and is in good standing in
each jurisdiction in which the conduct of its business or its ownership
or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would
not have a material adverse effect on CBI and its subsidiaries, taken
as a whole.
(v) Each subsidiary of CBI has been duly incorporated, is
validly existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as described
in the CBI Prospectus and is duly qualified to transact business and is
in good standing in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified
or be in good standing would not have a material adverse effect on CBI
and its subsidiaries, taken as a whole.
(vi) All of the outstanding shares of capital stock of each
subsidiary of CBI have been duly and validly authorized and issued, are
fully paid and nonassessable and are owned beneficially by CBI free and
clear of any security interests, liens, encumbrances, equities or
claims.
(vii) This Agreement has been duly authorized, executed and
delivered by CBI.
(viii) CBI's authorized equity capitalization consists of
240,000,000 shares of CBI Common Stock and 5,000,000 preferred shares;
and the authorized capital stock of CBI conforms as to legal matters to
the description thereof contained or incorporated by reference in the
CBI Prospectus.
5
6
(ix) The shares of CBI Common Stock (including the Shares)
outstanding have been duly authorized and are validly issued, fully
paid and non-assessable.
(x) The shares of CBI Common Stock (including the Shares) have
been duly authorized for listing on the New York Stock Exchange (the
"NYSE") and the Cincinnati Stock Exchange (the "CSE").
(xi) CBI has passed title to the Shares to be sold by the
Pension Trust pursuant to this Agreement to the Pension Trust, free and
clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity.
(xii) With respect to the management of the Pension Trust, CBI
has not taken and will not take, directly or indirectly, any action
designed to or which has constituted or which might reasonably be
expected to cause or result in any action that has caused or would
cause any of the representations and warranties of the Pension Trust
contained in this Agreement to be inaccurate or misleading as of the
date hereof.
(xiii) Coopers & Xxxxxxx L.L.P., whose reports appear in the
documents incorporated by reference in the CBI Registration Statement,
are independent public accountants with respect to CBI and its
subsidiaries as required by the Act and the rules and regulations
thereunder.
(xiv) The historical consolidated financial statements
(including the related notes) included or incorporated by reference in
the CBI Registration Statement present fairly the consolidated
financial position of CBI and its consolidated subsidiaries as of the
dates indicated and the results of operations and changes in financial
condition for the periods specified; such financial statements have
been prepared in conformity with generally accepted accounting
principals applied on a consistent basis throughout the periods
involved; and the supporting schedules included or incorporated by
reference in the CBI Registration Statement present fairly the
information required to be stated therein. The selected historical
consolidated financial data included in the CBI Prospectus present
fairly the information shown therein and have been compiled on a basis
consistent with that of the related historical consolidated financial
statements included or incorporated by reference in the CBI
Registration Statement.
(xv) The execution and delivery by CBI of, and the performance
by CBI of its obligations under, this Agreement will not contravene any
provision of applicable law or the certificate of incorporation or
by-laws of CBI or any agreement or other instrument binding upon CBI or
any of its subsidiaries that is material to CBI and its subsidiaries,
taken as a whole, or any judgment, order or decree of any governmental
body, agency or court having jurisdiction over CBI or any subsidiary,
and no consent, approval, authorization or order of, or qualification
with, any governmental body or agency is required for the
6
7
performance by CBI of its obligations under this Agreement, except such
as may be required by the securities or Blue Sky laws of the various
states in connection with the offer and sale of the Shares.
(xvi) There has not occurred any material adverse change, or
any development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of CBI and its subsidiaries, taken as a whole, from that set
forth in the CBI Prospectus (exclusive of any amendments or supplements
thereto subsequent to the date of this Agreement).
(xvii) There is no legal or governmental proceeding pending or
threatened to which CBI or any of its subsidiaries is a party or to
which any of the properties of CBI or any of its subsidiaries is
subject that (A) has adversely affected, or would reasonably be likely
to adversely affect, the execution by CBI of this Agreement, the
performance by CBI of any of its obligations hereunder or the
consummation of any of the transactions contemplated in this Agreement,
(B) except as disclosed in the CBI Prospectus, has had or is reasonably
likely to have, singularly or in the aggregate with all such actions,
suits, proceedings or investigations, a material adverse effect on CBI
and its subsidiaries, taken as a whole, or (C) is required to be
described in the CBI Registration Statement or the CBI Prospectus and
is not so described; and there are no statutes, regulations, contracts
or other documents that are required to be described in the CBI
Registration Statement or the CBI Prospectus or to be filed as exhibits
to the CBI Registration Statement that are not described or filed as
required.
(xviii) CBI is not an "investment company" as such term is
defined in the Investment Company Act of 1940, as amended.
(xix) CBI and its subsidiaries (A) are in compliance with any
and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (B) have received all permits,
licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (C) are
in compliance with all terms and conditions of any such permit, license
or approval, except where such noncompliance with Environmental Laws,
failure to receive required permits, licenses or other approvals or
failure to comply with the terms and conditions of such permits,
licenses or approvals would not, singly or in the aggregate, have a
material adverse effect on CBI and its subsidiaries, taken as a whole.
(xx) In the ordinary course of its business, CBI conducts a
periodic review of the effect of Environmental Laws on the business,
operations and properties of CBI and its subsidiaries, in the course of
which it identifies and
7
8
evaluates associated costs and liabilities (including, without
limitation, any capital or operating expenditures required for
clean-up, closure of properties or compliance with Environmental Laws
or any permit, license or approval, any related constraints on
operating activities and any potential liabilities to third parties).
On the basis of such review, CBI has reasonably concluded that such
associated costs and liabilities would not, singly or in the aggregate,
have a material adverse effect on CBI and its subsidiaries, taken as a
whole.
(xxi) There are no contracts, agreements or understandings
between CBI and any person granting such person the right to require
CBI to file a registration statement under the Act with respect to any
securities of CBI (other than the Registration Rights Agreements) or to
require CBI to include such securities with the Shares registered
pursuant to the CBI Registration Statement.
(xxii) CBI has not taken and will not take, directly or
indirectly, any action designed to or which has constituted or which
might reasonably be expected to cause or result, under the Exchange Act
or otherwise, in stabilization or manipulation of the price of any
security of CBI to facilitate the sale or resale of the DECS, the DECS
Shares or the Shares.
(xxiii) The execution, delivery and performance of this
Agreement does not and will not constitute a prohibited transaction
under the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), by reason of Prohibited Transaction Class Exemption 84-14
(respecting Qualified Professional Asset Managers); provided, however,
that for purposes of this representation, CBI may assume that no
Underwriter (or any person controlling, or controlled by, any
Underwriter) owns a five percent or greater interest in Bankers Trust
Company ("Bankers Trust") within the meaning of section V(h) of PTCE
84-14.
(b) Representations and Warranties of CBI and the Pension Trust. Each
of CBI and the Pension Trust represents and warrants to, and agrees with,
each Underwriter as set forth below in this Section 1(b).
(i) This Agreement has been duly authorized, executed and
delivered by the Pension Trust.
(ii) The execution and delivery by the Pension Trust of, and
the performance by the Pension Trust of its obligations under, this
Agreement will not contravene any provision of applicable law (subject
to clause (ix) below), or the trust agreement of the Pension Trust, or
any agreement or other instrument binding upon the Pension Trust or any
judgment, order or decree of any governmental body, agency or court
having jurisdiction over the Pension Trust, and no consent, approval,
authorization or order of, or qualification with, any governmental body
or agency is required for the performance by the Pension Trust of its
obligations under this Agreement, except such as may be required by
8
9
the securities or Blue Sky laws of the various states in connection
with the offer and sale of the Shares.
(iii) The Pension Trust has, and on the Closing Date will
have, valid title to the Shares to be sold by the Pension Trust and the
legal right and power, and all authorization and approval required by
law, to enter into this Agreement and to sell, transfer and deliver the
Shares to be sold by the Pension Trust.
(iv) The Shares to be sold by the Pension Trust pursuant to
this Agreement have been duly authorized and are validly issued, fully
paid and non-assessable.
(v) Delivery of the Shares to be sold by the Pension Trust
pursuant to this Agreement will pass title to such Shares, free and
clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity.
(vi) The Pension Trust has not taken and will not take,
directly or indirectly, any action designed to or which has constituted
or which might reasonably be expected to cause or result, under the
Exchange Act or otherwise, in stabilization or manipulation of the
price of any security of CBI to facilitate the sale or resale of the
DECS, the DECS Shares or the Shares; and the Pension Trust has not
effected any sales of CBI Common Stock which, if effected by the
issuer, would be required to be disclosed in response to Item 701 of
Regulation S-K.
(vii) Bankers Trust, as trustee of the Pension Trust, has full
power and authority to execute and deliver this Agreement for the
account and on behalf of the Pension Trust and to so bind the Pension
Trust.
(viii) The execution, delivery and performance of this
Agreement does not and will not constitute a prohibited transaction
under ERISA by reason of Prohibited Transaction Class Exemption 84-14
(respecting Qualified Professional Asset Managers); provided, however,
that for purposes of this representation, the Pension Trust may assume
that no Underwriter (or any person controlling, or controlled by, any
Underwriter) owns a five percent or greater interest in Bankers Trust
within the meaning of section V(h) of PTCE 84-14.
(c) Representations and Warranties of Bankers Trust. Bankers Trust, in
its corporate and in its fiduciary capacity, represents and warrants to, and
agrees with, each Underwriter as set forth below in this Section 1(c).
(i) This Agreement has been duly authorized, executed and
delivered by the Pension Trust.
(ii) The execution and delivery by the Pension Trust of, and
the performance by the Pension Trust of its obligations under, this
Agreement will not contravene the trust agreement of the Pension Trust
or, to the best knowledge of
9
10
Bankers Trust, any provision of applicable law or any agreement or
other instrument binding upon the Pension Trust, or any judgment, order
or decree of any governmental body, agency or court having jurisdiction
over the Pension Trust, and, to the best knowledge of Bankers Trust, no
consent, approval, authorization or order of, or qualification with,
any governmental body or agency is required for the performance by the
Pension Trust of its obligations under this Agreement, except such as
may be required by the securities or Blue Sky laws of the various
states in connection with the offer and sale of the Shares.
(iii) The Pension Trust has, and on the Closing Date will
have, the legal right and power, and all authorization and approval
required by law, to enter into this Agreement and to sell, transfer and
deliver the Shares to be sold by the Pension Trust.
(iv) Bankers Trust, as trustee of the Pension Trust, has full
power and authority to execute and deliver this Agreement for the
account and on behalf of the Pension Trust and to so bind the Pension
Trust.
(v) The execution, delivery and performance of this Agreement
does not and will not constitute a prohibited transaction under ERISA
by reason of Prohibited Transaction Class Exemption 84-14 (respecting
Qualified Professional Asset Managers); provided, however, that for
purposes of this representation, Bankers Trust may assume that no
Underwriter (or any person controlling, or controlled by, any
Underwriter) owns a five percent or greater interest in Bankers Trust
within the meaning of section V(h) of PTCE 84-14.
2. Purchase and Sale. (a) Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the Pension
Trust agrees to sell to each Underwriter, and each Underwriter agrees, severally
and not jointly, to purchase from the Pension Trust, at a purchase price of
$_______ per share, the respective number of Firm Shares set forth opposite such
Underwriter's name in Schedules I and II hereto.
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Pension Trust hereby grants
an option to the several U.S. Underwriters to purchase, severally and not
jointly, up to 300,000 Option Shares at the same purchase price per share as the
Underwriters shall pay for the Firm Shares. Said option may be exercised only to
cover over-allotments in the sale of the Firm Shares by the Underwriters. Said
option may be exercised in whole or in part at any time (but not more than once)
on or before the 30th day after the date of the CBI Prospectus upon written or
telegraphic notice by the U.S. Underwriters to the Pension Trust and CBI setting
forth the number of Option Shares as to which the U.S. Underwriters are
exercising the option and the settlement date. Delivery of certificates for the
Option Shares, and payment therefor, shall be made as provided in Section 3
hereof. The number of Option Shares to be purchased by each U.S. Underwriter
shall be the same percentage of the total number of Option Shares to be
purchased by the several U.S. Underwriters as such
10
11
U.S. Underwriter is purchasing of the Firm Shares, subject to such adjustments
as the U.S. Representatives in their absolute discretion shall make to eliminate
any fractional shares.
3. Delivery and Payment. Delivery of and payment for the Firm Shares
(and the Option Shares (if and to the extent the option provided for in Section
2(b) hereof shall have been exercised on or before the first business day prior
to the Closing Date)) shall be made at 10:00 AM, New York City time, on November
__, 1996, or such later date (not later than November __, 1996) as the
Representatives shall designate, which date and time may be postponed by
agreement between the Representatives and the Pension Trust or as provided in
Section 9 hereof (such date and time of delivery and payment for the Firm Shares
being herein called the "Closing Date"). Delivery of the Shares shall be made on
the instructions of the Representatives for the respective accounts of the
several Underwriters against payment by the several Underwriters through the
Representatives of the purchase price thereof to or upon the order of the
Pension Trust in immediately available funds. Delivery of, and payment for, the
Shares shall be made through the facilities of The Depository Trust Company.
Certificates for the Shares shall be registered in such names and in such
denominations as the Representatives shall request not less than one full
business day in advance of the Closing.
The Pension Trust agrees to have the Shares available for inspection,
checking and packaging by the Representatives in New York, New York, not later
than 1:00 PM on the business day prior to the Closing Date.
If the option provided for in Section 2(b) hereof is exercised after
the first full business day prior to the Closing Date, the Pension Trust will
deliver (at the expense of the Pension Trust) to the U.S. Representatives, at
0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx, xx the date specified by the U.S.
Representatives in the notice described in Section 2(b), or such later date (not
later than December __, 1996) specified by the U.S. Representatives,
certificates for the Option Shares in such names and denominations as the U.S.
Representatives shall have requested against payment of the purchase price
thereof to or upon the order of the Pension Trust in immediately available
funds. If settlement for the Option Shares occurs after the Closing Date, the
Pension Trust will deliver to the U.S. Representatives on the settlement date
for the Option Shares, and the obligation of the U.S. Underwriters to purchase
the Option Shares shall be conditioned upon receipt of, supplemental opinions,
certificates and letters confirming as of such date the opinions, certificates
and letters delivered on the Closing Date pursuant to Section 6 hereof.
4. Offering by the Underwriters. It is understood that the several
Underwriters propose to offer the Shares for sale to the public as set forth in
the CBI Prospectus.
5. Agreements.
(a) Agreements of CBI. CBI agrees with the several Underwriters that:
(i) CBI will use its best efforts to cause the CBI
Registration Statement, if not effective at the Execution Time, and any
amendment thereof to become effective. Prior to the termination of the
offering of the Shares, CBI will
11
12
not file any amendment of the CBI Registration Statement or supplement
to the CBI Prospectus unless CBI has furnished the Representatives a
copy for their review prior to filing and will not file any such
proposed amendment or supplement to which the Representatives
reasonably object. Subject to the foregoing sentence, if the CBI
Registration Statement has become or becomes effective pursuant to Rule
430A, or filing of the CBI Prospectus is otherwise required under Rule
424(b), CBI will cause the CBI Prospectus, properly completed, and any
supplement thereof to be filed with the Commission pursuant to the
applicable paragraph of Rule 424(b) within the time period prescribed
and will provide evidence satisfactory to the Representatives of such
timely filing. CBI will promptly advise the Representatives (A) when
the CBI Registration Statement, if not effective at the Execution Time,
and any amendment thereof, shall have become effective, (B) when the
CBI Prospectus, and any supplement thereto, shall have been filed (if
required) with the Commission pursuant to Rule 424(b), (C) when, prior
to termination of the offering of the Shares, any amendment to the CBI
Registration Statement shall have been filed or become effective, (D)
of any request by the Commission for any amendment of the CBI
Registration Statement or supplement to the CBI Prospectus or for any
additional information, (E) of the issuance by the Commission of any
stop order suspending the effectiveness of the CBI Registration
Statement or the institution or threatening of any proceeding for that
purpose and (F) of the receipt by CBI of any notification with respect
to the suspension of the qualification of the Shares for sale in any
jurisdiction or the initiation or threatening of any proceeding for
such purpose. CBI will use its best efforts to prevent the issuance of
any such stop order and, if issued, to obtain as soon as possible the
withdrawal thereof.
(ii) If, at any time when a prospectus relating to the CBI
Common Stock is required to be delivered under the Act (including in
respect of the offering and sale of the Shares) in the opinion of
counsel for the Underwriters, any event occurs or condition exists as a
result of which the CBI Prospectus as then supplemented would include
any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein in the light of the
circumstances under which they were made not misleading, or if, in the
opinion of counsel for the Underwriters, it shall be necessary to amend
the CBI Registration Statement or supplement the CBI Prospectus to
comply with the Act or the Exchange Act or the respective rules
thereunder, CBI (A) immediately will notify the Representatives of such
event or necessity and (B) promptly will prepare and file with the
Commission, subject to the second sentence of paragraph (a)(i) of this
Section 5, an amendment or supplement which will correct such statement
or omission or effect such compliance.
(iii) As soon as practicable, CBI will make generally
available to its security holders and to the Representatives an
earnings statement or statements of CBI and its subsidiaries which will
satisfy the provisions of Section 11(a) of the Act and Rule 158 under
the Act.
12
13
(iv) CBI will furnish to the Representatives and counsel for
the Underwriters, without charge, signed copies of the CBI Registration
Statement (including exhibits thereto) and to each other Underwriter a
copy of the CBI Registration Statement (without exhibits thereto) and,
so long as delivery of a prospectus by an Underwriter or dealer may be
required by the Act, as many copies of each Preliminary CBI Prospectus,
the CBI Prospectus and any supplement thereto as the Representatives
may reasonably request. CBI will pay the expenses of printing or other
production of all documents relating to the offering, including the CBI
Registration Statement, each Preliminary CBI Prospectus and the CBI
Prospectus.
(v) CBI will arrange for the qualification of the Shares for
sale under the laws of such jurisdictions as the Representatives may
designate, will maintain such qualifications in effect so long as
required for the distribution of the Shares, will arrange for the
determination of the legality of the Shares for purchase by
institutional investors and will pay the fee of the National
Association of Securities Dealers, Inc., in connection with its review,
if any, of the offering.
(vi) Without the prior written consent of the Representatives
on behalf of the Underwriters, CBI will not, during the period ending
90 days after the date of the CBI Prospectus, (A) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to
purchase or otherwise transfer or dispose of, directly or indirectly,
or announce the offering of, any shares of CBI Common Stock or any
securities convertible into or exercisable or exchangeable for CBI
Common Stock (whether such shares or any such securities are now owned
by CBI or are hereafter acquired) or (B) enter into any swap or other
arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the CBI Common Stock, whether any
such transaction described in clause (A) or (B) above is to be settled
by delivery of CBI Common Stock or such other securities, in cash or
otherwise; provided, however, that CBI may issue, or grant options for,
shares of CBI Common Stock pursuant to any stock plan for employees or
directors or any qualified employee benefit plan in effect on the date
of the CBI Prospectus, or pursuant to any stock options outstanding on
the date of the CBI Prospectus, and any defined contribution qualified
employee benefit plan in effect on the date of the CBI Prospectus may
sell shares of CBI Common Stock to satisfy plan liquidity needs. In
addition, CBI agrees that, without the prior written consent of the
Representatives on behalf of the Underwriters, it will not, during the
period ending 90 days after the date of the CBI Prospectus, make any
demand for, or exercise any right with respect to, the registration of
any shares of CBI Common Stock or any security convertible into or
exercisable or exchangeable for CBI Common Stock. CBI further agrees to
establish an internal mechanism for monitoring and ensuring compliance
by each executive officer and director with the aggregate limit on
sales of CBI Common Stock by such persons
13
14
set forth in the proviso to the second paragraph of the form of letter
agreement to be executed by such persons attached hereto as Exhibit A.
(vii) CBI will take such actions as may be reasonably
necessary to comply with the rules and regulations of the NYSE and the
CSE in respect of the offering of the Shares.
(b) Agreements of the Pension Trust. The Pension Trust agrees with the
several underwriters that, without the prior written consent of the
Representatives on behalf of the Underwriters, the Pension Trust will not,
during the period ending 90 days after the date of the CBI Prospectus, (A)
offer, pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase or otherwise transfer or dispose of, directly or indirectly, or
announce the offering of, any shares of CBI Common Stock or any securities
convertible into or exercisable or exchangeable for CBI Common Stock (whether
such shares or any such securities are now owned by the Pension Trust or are
hereafter acquired) or (B) enter into any swap or other arrangement that
transfers to another, in whole or in part, any of the economic consequences of
ownership of the CBI Common Stock, whether any such transaction described in
clause (A) or (B) above is to be settled by delivery of CBI Common Stock or such
other securities, in cash or otherwise. The foregoing sentence shall not apply
to the Shares to be sold hereunder. In addition, the Pension Trust agrees that,
without the prior written consent of the Representatives on behalf of the
Underwriters, it will not, during the period ending 90 days after the date of
the CBI Prospectus, make any demand for, or exercise any right with respect to,
the registration of any shares of CBI Common Stock or any security convertible
into or exercisable or exchangeable for CBI Common Stock.
6. Conditions to the Obligations of the Underwriters. The obligations
of the Underwriters to purchase the Firm Shares and the Option Shares, as the
case may be, shall be subject to the accuracy of the representations and
warranties on the part of each of CBI and the Pension Trust contained herein as
of the Execution Time and the Closing Date and any settlement date pursuant to
Section 3 hereof, to the accuracy of the statements of CBI and the Pension Trust
made in any certificates pursuant to the provisions hereof, to the performance
by each of CBI and the Pension Trust of its obligations hereunder and to the
following additional conditions:
(a) If the CBI Registration Statement has not become effective
prior to the Execution Time, unless the Representatives agree in
writing to a later time, the CBI Registration Statement will become
effective not later than (i) 6:00 PM New York City time, on the date of
determination of the public offering price of the Shares, if such
determination occurred at or prior to 3:00 PM New York City time on
such date or (ii) 12:00 Noon New York City time on the business day
following the date of determination of the public offering price of the
Shares, if such determination occurred after 3:00 PM New York City time
on such date; if filing of the CBI Prospectus, or any supplement
thereto, is required pursuant to Rule 424(b), the CBI Prospectus, and
any such supplement, shall have been filed in the manner and within the
time period required
14
15
by Rule 424(b); and no stop order suspending the effectiveness of the
CBI Registration Statement shall have been issued and no proceedings
for that purpose shall have been instituted or threatened.
(b) CBI shall have furnished to the Representatives the
opinion of Frost & Xxxxxx, counsel for CBI, dated as of the Closing
Date, to the effect that:
(i) CBI has been duly incorporated, is validly
existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, has the corporate power
and authority to own its property and to conduct its business
as described in the CBI Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction
in which CBI has informed such counsel that the conduct of its
business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material
adverse effect on CBI and its subsidiaries, taken as a whole;
(ii) each subsidiary of CBI has been duly
incorporated, is validly existing as a corporation in good
standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own
its property and to conduct its business as described in the
CBI Prospectus and is duly qualified to transact business and
is in good standing in each jurisdiction in which CBI has
informed such counsel that the conduct of its business or its
ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be
in good standing would not have a material adverse effect on
CBI and its subsidiaries, taken as a whole;
(iii) all the outstanding shares of capital stock of
each subsidiary of CBI have been duly and validly authorized
and issued and are fully paid and nonassessable, and, except
as otherwise set forth in the CBI Prospectus, all outstanding
shares of capital stock of each such subsidiary are owned by
CBI either directly or through wholly owned subsidiaries free
and clear of any perfected security interest and, to the
knowledge of such counsel, after due inquiry, any other
security interests, claims, liens or encumbrances;
(iv) this Agreement has been duly authorized,
executed and delivered by CBI;
(v) CBI's authorized equity capitalization consists
of 240,000,000 shares of CBI Common Stock and 5,000,000
preferred shares; and the authorized capital stock of CBI
conforms as to legal matters to the description thereof
contained or incorporated by reference in the CBI Prospectus;
(vi) the shares of CBI Common Stock (including the
Shares) outstanding have been duly authorized and are validly
issued, fully paid and non-assessable;
15
16
(vii) the shares of CBI Common Stock (including the
Shares) have been duly authorized for listing on the NYSE and
the CSE;
(viii) the execution and delivery by CBI of, and the
performance by CBI of its obligations under, this Agreement
will not contravene any provision of applicable law or the
certificate of incorporation or by-laws of CBI or, to the best
of such counsel's knowledge, any agreement or other instrument
binding upon CBI or any of its subsidiaries that is material
to CBI and its subsidiaries, taken as a whole, or, to the best
of such counsel's knowledge, any judgment, order or decree of
any governmental body, agency or court having jurisdiction
over CBI or any subsidiary, and no consent, approval,
authorization or order of, or qualification with, any
governmental body or agency is required for the performance by
CBI of its obligations under this Agreement, except such as
may be required by the securities or Blue Sky laws of the
various states in connection with the offer and sale of the
Shares;
(ix) the statements (A) in the CBI Pension Trust
Prospectus under the captions "Business--Cincinnati Xxxx
Telephone Company--Regulation" (third and fourth paragraphs),
"Business--Other Businesses" (fourth paragraph), "Description
of Capital Stock" and "Certain United States Tax Consequences
to Non-United States Holders" and (B) in the CBI Registration
Statement in Item 15, in each case insofar as such statements
constitute summaries of the legal matters, documents or
proceedings referred to therein, fairly present the
information called for with respect to such legal matters,
documents and proceedings and fairly summarize the matters
referred to therein;
(x) after due inquiry, such counsel does not know of
any legal or governmental proceedings pending or threatened to
which CBI or any of its subsidiaries is a party or to which
any of the properties of CBI or any of its subsidiaries is
subject that are required to be described in the CBI
Registration Statement or the CBI Prospectus and are not so
described or of any statutes, regulations, contracts or other
documents that are required to be described in the CBI
Registration Statement or the CBI Prospectus or to be filed as
exhibits to the CBI Registration Statement that are not
described or filed as required;
(xi) CBI is not an "investment company" as such term
is defined in the Investment Company Act of 1940, as amended;
(xii) the CBI Registration Statement has become
effective under the Act; any required filing of the CBI
Prospectus, and any supplements thereto, pursuant to Rule
424(b) has been made in the manner and within the time period
required by Rule 424(b); and to the best knowledge of such
counsel, no stop order suspending the effectiveness of the CBI
Registration Statement has been issued, and no proceedings for
that purpose have been instituted or threatened;
16
17
(xiii) such counsel (A) is of the opinion that the CBI
Registration Statement and CBI Prospectus (except for financial
statements and schedules and other financial and statistical data
included therein as to which such counsel need not express any opinion)
comply as to form in all material respects with the Securities Act and
the applicable rules and regulations of the Commission thereunder, (B)
has no reason to believe that (except for financial statements and
schedules and other financial and statistical data as to which such
counsel need not express any belief) the CBI Registration Statement and
the prospectus included therein at the time the CBI Registration
Statement became effective contained any 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 and (C) has
no reason to believe that (except for financial statements and
schedules and other financial and statistical data as to which such
counsel need not express any belief) the CBI Prospectus contains any
untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and
(xiv) no holders of securities of CBI have rights to the
registration of such securities under the CBI Registration Statement
(other than pursuant to the Registration Rights Agreements).
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State of
Ohio or the United States, to the extent they deem proper and specified in such
opinion, upon the opinion of other counsel of good standing whom they believe to
be reliable and who are satisfactory to counsel for the Underwriters and (B) as
to matters of fact, to the extent they deem proper, on certificates of
responsible officers of CBI and public officials. References to the CBI
Prospectus in this paragraph (b) include any supplements thereto at the Closing
Date.
(c) The Pension Trust shall have furnished to the Representatives the
opinion of Xxxxx X. Xxxxxxxx, counsel for Bankers Trust, dated the Closing Date,
to the effect that:
(i) Bankers Trust, as trustee of the Pension Trust, has full
power and authority to execute and deliver this Agreement for the
account and on behalf of the Pension Trust and to so bind the Pension
Trust;
(ii) this Agreement has been duly authorized, executed and
delivered by the Pension Trust;
(iii) the Pension Trust has valid title to the Shares to be
sold by the Pension Trust and the legal right and power, and all
authorization and approval required by law, to enter into this
Agreement and to sell, transfer and deliver the Shares to be sold by
the Pension Trust;
17
18
(iv) upon the delivery of and payment for the Shares to be
sold by the Pension Trust pursuant to this Agreement as herein
contemplated, such delivery of the Shares will pass title to such
Shares to the Underwriters, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity;
(v) the execution, delivery and performance of this Agreement
does not and will not constitute a prohibited transaction under ERISA
by reason of Prohibited Transaction Class Exemption 84-14 (respecting
Qualified Professional Asset Managers), assuming that no Underwriter
(or any person controlling, or controlled by, any Underwriter) owns a
five percent or greater interest in Bankers Trust within the meaning of
section V(h) of PTCE 84-14.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State of
New York or the United States, to the extent they deem proper and specified in
such opinion, upon the opinion of other counsel of good standing whom they
believe to be reliable and who are satisfactory to counsel for the Underwriters
and (B) as to matters of fact, to the extent they deem proper, on certificates
of responsible officers of CBI and public officials. References to the CBI
Prospectus in this paragraph (c) include any supplements thereto at the Closing
Date.
(d) The Representatives shall have received from Cleary, Gottlieb,
Xxxxx & Xxxxxxxx, counsel for the Underwriters, such opinion or opinions, dated
the Closing Date, with respect to the issuance and sale of the Shares, the CBI
Registration Statement, the CBI Prospectus (together with any supplement
thereto) and other related matters as the Representatives may reasonably
require, and CBI and the Pension Trust shall have furnished to such counsel such
documents as such counsel may reasonably request for the purpose of enabling
such counsel to pass upon such matters.
(e) CBI shall have furnished to the Representatives a certificate of
CBI, signed by the Chairman of the Board or the President and the principal
financial or accounting officer of CBI, dated the Closing Date, to the effect
that the signers of such certificate have carefully examined the CBI
Registration Statement, the CBI Prospectus, any supplements to the CBI
Prospectus and this Agreement and that:
(i) the representations and warranties of CBI in this
Agreement are true and correct in all material respects on and as of
the Closing Date with the same effect as if made on the Closing Date
and CBI has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or prior to the
Closing Date;
(ii) no stop order suspending the effectiveness of the CBI
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to CBI's knowledge, threatened; and
18
19
(iii) since the date of the most recent financial statements
included in the CBI Prospectus (exclusive of any supplement thereto),
there has been no material adverse change in the condition (financial
or other), earnings, business, operations or properties of CBI and its
subsidiaries, whether or not arising from transactions in the ordinary
course of business, except as set forth in or contemplated in the CBI
Prospectus (exclusive of any supplement thereto).
(f) The Pension Trust shall have furnished to the Representatives a
certificate signed by two appropriate officers of Bankers Trust, dated the
Closing Date, to the effect that each signer of such certificate has carefully
examined the CBI Registration Statement, the CBI Prospectus, any supplement to
the CBI Prospectus and this Agreement and that (i) the representations and
warranties of the Pension Trust and Bankers Trust in this Agreement are true and
correct in all material respects on and as of the Closing Date with the same
effect as if made on the Closing Date and (ii) and the Pension Trust has
complied with all the agreements and satisfied all the conditions on its part to
be performed or satisfied at or prior to the Closing Date.
(g) At the Execution Time and at the Closing Date, Coopers & Xxxxxxx
L.L.P., accountants for CBI, shall have furnished to the Representatives a
letter or letters, dated respectively as of the Execution Time and as of the
Closing Date, in form and substance satisfactory to the Representatives,
confirming that they are independent accountants within the meaning of the Act
and the Exchange Act and the respective applicable published rules and
regulations thereunder and stating in effect that:
(i) in their opinion the audited financial statements and
financial statement schedules included or incorporated in the CBI
Registration Statement and the CBI Prospectus and reported on by them
comply in form in all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the related published
rules and regulations;
(ii) on the basis of a reading of the latest unaudited
financial statements made available by CBI and its subsidiaries; their
limited review in accordance with standards established by the American
Institute of Certified Public Accountants of the unaudited interim
financial information as indicated in their reports incorporated in the
CBI Registration Statement and CBI Prospectus; carrying out certain
specified procedures (but not an examination in accordance with
generally accepted auditing standards) which would not necessarily
reveal matters of significance with respect to the comments set forth
in such letter; a reading of the minutes of the meetings of the
stockholders, directors and Executive, Audit, Finance and Benefits and
Compensation committees of CBI and its subsidiaries; and inquiries of
certain officials of CBI who have responsibility for financial and
accounting matters of CBI and its subsidiaries as to transactions and
events subsequent to December 31, 1995, nothing came to their attention
which caused them to believe that:
19
20
(1) any unaudited financial statements included or
incorporated in the CBI Registration Statement and the CBI
Prospectus do not comply in form in all material respects with
applicable accounting requirements and with the published
rules and regulations of the Commission with respect to
financial statements included or incorporated in quarterly
reports on Form 10-Q under the Exchange Act; or said unaudited
financial statements are not in conformity with generally
accepted accounting principles applied on a basis
substantially consistent with that of the audited financial
statements included or incorporated in the CBI Registration
Statement and the CBI Prospectus; or
(2) with respect to the period subsequent to December
31, 1995, there were any changes, at a specified date not more
than three business days prior to the date of the letter, in
the long-term debt of CBI and its subsidiaries or capital
stock of CBI or any decreases in the shareowners' equity of
CBI as compared with the amounts shown on the December 31,
1995 consolidated balance sheet included or incorporated in
the CBI Registration Statement and the CBI Prospectus, or for
the period from January 1, 1996 to such specified date there
were any decreases, as compared with the corresponding period
in the preceding year in revenues, operating income or income
before income taxes, extraordinary charges and cumulative
effect of change in accounting principle or in the total or
per-share amounts of net income, except in all instances for
changes or decreases set forth in such letter, in which case
the letter shall be accompanied by an explanation by CBI as to
the significance thereof unless said explanation is not deemed
necessary by the Representatives; and
(iii) they have performed certain other specified procedures
as a result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of CBI and its subsidiaries) set forth or
incorporated in the CBI Registration Statement and the CBI Prospectus,
including the information set forth under the captions "Prospectus
Summary," "Risk Factors," "Selected Consolidated Financial
Information," "Management's Discussion and Analysis of Financial
Condition and Results of Operations," "Business Outlook," "Business"
and "Description of Capital Stock" in the CBI Prospectus, the
information included or incorporated in Items 1, 2, 6, 7, 8 and 11 of
CBI's Annual Report on Form 10-K, incorporated in the CBI Registration
Statement and the CBI Prospectus, the information included in the
portions of CBI's Proxy Statement dated March 14, 1996 incorporated in
the CBI Registration Statement and the CBI Prospectus and the
information included in the "Management's Discussion and Analysis of
Financial Condition and Results of Operations" included or incorporated
in CBI's Quarterly Reports on Form 10-Q, incorporated in the CBI
Registration Statement and the CBI
20
21
Prospectus, agrees with the accounting records of CBI and its
subsidiaries, excluding any questions of legal interpretation.
References to the CBI Prospectus in this paragraph (g) include any
supplement thereto at the date of the letter.
(h) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the CBI Registration Statements (exclusive of
any amendment thereof) and the CBI Prospectus (exclusive of any supplement
thereto), there shall not have been (i) any change or decrease specified in
the letter or letters referred to in paragraph (g) of this Section 6 or
(ii) any change, or any development involving a prospective change, in or
affecting the condition (financial or other), earnings, business,
operations or properties of CBI and their respective subsidiaries the
effect of which, in any case referred to in clause (i) or (ii) above, is,
in the judgment of the Representatives, so material and adverse as to make
it impractical or inadvisable to proceed with the offering or delivery of
the Shares as contemplated by the CBI Registration Statement (exclusive of
any amendment thereof) and the CBI Prospectus (exclusive of any supplement
thereto).
(i) Subsequent to the Execution Time, there shall not have been any
decrease in the ratings of any of CBI's debt securities by any "nationally
recognized statistical rating organization" (as defined for purpose of Rule
436(g) under the Act) or any notice given of any intended or potential
decrease in any such rating or of a possible change in any such rating that
does not indicate the direction of the possible change.
(j) On or prior to the Execution Time, the NYSE and the CSE shall have
approved the Underwriters' participation in the distribution of the Shares
to be sold by the Pension Trust.
(k) At the Execution Time, CBI shall have furnished to the
Representatives a letter substantially in the form of Exhibit A hereto from
each executive officer and director of CBI and from Waslic Company II and
The Western and Southern Life Insurance Company addressed to the
Representatives, relating to sales and certain other dispositions of shares
of CBI Common Stock or certain other securities, and such letter agreements
shall be in full force and effect on the Closing Date.
(l) Prior to the Closing Date, each of CBI and the Pension Trust shall
have furnished to the Representatives such further information,
certificates and documents as the Representatives may reasonably request.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Representatives and counsel for the Underwriters, this
Agreement and all obligations of the Underwriters hereunder may be canceled at,
or at any time prior to, the Closing Date by the Representatives. Notice of such
cancellation
21
22
shall be given to CBI and the Pension Trust in writing or by telephone or
telegraph confirmed in writing.
7. Expenses. (a) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, CBI agrees to pay or
cause to be paid all expenses incident to the performance of the obligations of
CBI and the Pension Trust under this Agreement, including: (i) the fees,
disbursements and expenses of the counsel of CBI and the Pension Trust and CBI's
accountants in connection with the registration and delivery of the Shares under
the Act and all other fees or expenses in connection with the preparation and
filing of the CBI Registration Statement, each Preliminary CBI Prospectus, the
CBI Prospectus and amendments and supplements to any of the foregoing, including
all printing costs associated therewith, and the mailing and delivering of
copies thereof to the Underwriters and dealers, in the quantities hereinabove
specified, (ii) all costs and expenses related to the transfer and delivery of
the Shares to the Underwriters, including any transfer or other taxes payable
thereon, (iii) the cost of printing or producing any Blue Sky or Legal
Investment memorandum in connection with the offer and sale of the Shares under
state securities laws and all expenses in connection with the qualification of
the Shares for offer and sale under state securities laws as provided in Section
5(a)(vi) hereof, including filing fees and the reasonable fees and disbursements
of counsel for the Underwriters in connection with such qualification and in
connection with the Blue Sky or Legal Investment memorandum, (iv) all filing
fees and disbursements of counsel to the Underwriters incurred in connection
with the review and qualification of the offering of the Shares by the National
Association of Securities Dealers, Inc., if any, (v) all costs and expenses
incident to listing the Shares on the NYSE and the CSE, (vi) the cost of
printing certificates representing the Shares, (vii) the costs and charges of
any transfer agent, registrar or depositary, (viii) the costs and expenses of
CBI relating to investor presentations on any "road show" undertaken in
connection with the marketing of the offering of the Shares, including, without
limitation, expenses associated with the production of road show slides and
graphics, fees and expenses of any consultants engaged in connection with the
road show presentations with the prior approval of CBI, travel and lodging
expenses of the representatives and officers of CBI and any such consultants,
and the cost of any aircraft chartered in connection with the road show, and
(ix) all other costs and expenses incident to the performance of the obligations
of CBI hereunder for which provision is not otherwise made in this Section .
(b) If the sale of the Shares provided for herein is not consummated
because any condition to the obligations of the Underwriters set forth in
Section 6 hereof is not satisfied, because of any termination pursuant to
Section 10 hereof or because of any refusal, inability or failure on the part of
CBI or the Pension Trust to perform any agreement herein or comply with any
provision hereof other than by reason of a default by any of the Underwriters,
CBI will reimburse the Underwriters severally upon demand for all out-of-pocket
expenses (including reasonable fees and disbursements of counsel) that shall
have been incurred by them in connection with the proposed purchase and sale of
the Shares.
(c) The provisions of this Section 7 shall not supersede or otherwise
affect any agreement that CBI and the Pension Trust may otherwise have for the
allocation of such expenses among themselves.
22
23
8. Indemnification and Contribution. (a) CBI agrees to indemnify and
hold harmless each Underwriter, the directors, officers, employees and agents of
each Underwriter and each person who controls any Underwriter within the meaning
of either the Act or the Exchange Act against any and all losses, claims,
damages or liabilities, joint or several, to which they or any of them may
become subject under the Act, the Exchange Act or other Federal or state
statutory law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in the CBI Registration Statement as originally filed or in any
amendment thereof, or in any Preliminary CBI Prospectus or the CBI Prospectus,
or in any amendment thereof or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and agrees to reimburse each such indemnified party, as incurred, for any legal
or other expenses reasonably incurred by them in connection with investigating
or defending any such loss, claim, damage, liability or action; provided,
however, that CBI shall not be liable under the indemnity agreement in this
paragraph (a) to the extent that any such loss, claim, damage or liability
arises out of or is based on any such untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon and in
conformity with written information furnished to CBI by or on behalf of any
Underwriter through the Representatives specifically for inclusion therein. This
indemnity agreement will be in addition to any liability which CBI may otherwise
have.
(b) Each Underwriter severally agrees to indemnify and hold harmless
CBI, each of its directors, each of its officers who signs the CBI Registration
Statement and each person who controls CBI within the meaning of either the Act
or the Exchange Act to the same extent as the foregoing indemnity in paragraph
(a) from CBI to each Underwriter, but only with reference to written information
relating to such Underwriter furnished to CBI by or on behalf of such
Underwriter through the Representatives specifically for inclusion in the
documents referred to in the foregoing indemnity. This indemnity agreement will
be in addition to any liability which any Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section 8
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a), (b) or (c) above unless and to the extent it did
not otherwise learn of such action and such failure results in the forfeiture by
the indemnifying party of substantial rights and defenses and (ii) will not, in
any event, relieve the indemnifying party from any obligations to any
indemnified party other than the indemnification obligation provided in
paragraph (a), (b) or (c) above. The indemnifying party shall be entitled to
appoint counsel of the indemnifying party's choice at the indemnifying party's
expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be satisfactory to the indemnified
party. Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall
23
24
have the right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel if (A) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict of
interest, (B) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (C) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action or (D) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. An indemnifying party will not, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b) of
this Section 8 is unavailable to or insufficient to hold harmless any
indemnified party for any reason, CBI and the Underwriters agree to contribute
to the aggregate losses, claims, damages and liabilities (including legal or
other expenses reasonably incurred in connection with investigating or defending
same) (collectively "Losses") to which CBI and one or more of the Underwriters
may be subject in such proportion as is appropriate to reflect the relative
benefits received by CBI and the Underwriters from the offering of the Shares;
provided, however, that in no case shall any Underwriter (except as may be
provided in any agreement among underwriters relating to the offering of the
Shares) be responsible for any amount in excess of the underwriting discount or
commission applicable to the Shares purchased by such Underwriter hereunder. If
the allocation provided by the immediately preceding sentence is unavailable for
any reason, CBI and the Underwriters shall contribute in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of CBI and the Underwriters in connection with the statements or omissions
which resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by CBI shall be deemed to be equal to the
total net proceeds from the offering (before deducting expenses) received by the
Pension Trust, and benefits received by the Underwriters shall be deemed to be
equal to the total underwriting discounts and commissions, in each case as set
forth on the cover page of the CBI Prospectus. Relative fault shall be
determined by reference to whether any alleged untrue statement or omission
relates to information provided by CBI or the Underwriters. CBI, the Pension
Trust and the Underwriters agree that it would not be just and equitable if
contribution were determined by pro rata allocation or any other method of
allocation which does not take account of the equitable considerations referred
to above. Notwithstanding the provisions of this paragraph (e), no person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 8, each person who
controls an Underwriter within the meaning of either the Act or the Exchange Act
and each director, officer, employee and agent of an
24
25
Underwriter shall have the same rights to contribution as such Underwriter; and
each person who controls CBI within the meaning of either the Act or the
Exchange Act, each officer of CBI who shall have signed the CBI Registration
Statement and each director of CBI shall have the same rights to contribution as
CBI, subject in each case to applicable terms and conditions of this paragraph
(e).
9. Default by an Underwriter. If any one or more Underwriters shall
fail to purchase and pay for any of the Shares agreed to be purchased by such
Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Shares set forth
opposite their names in Schedules I and II hereto bears to the aggregate
principal amount of Shares set forth opposite the names of all the remaining
Underwriters) the Shares which the defaulting Underwriter or Underwriters agreed
but failed to purchase; provided, however, that in the event that the aggregate
amount of Shares which the defaulting Underwriter or Underwriters agreed but
failed to purchase shall exceed 10% of the aggregate principal amount of Shares
set forth in Schedules I and II hereto, the remaining Underwriters shall have
the right to purchase all, but shall not be under any obligation to purchase
any, of the Shares, and if such nondefaulting Underwriters do not purchase all
the Shares, this Agreement will terminate without liability to any nondefaulting
Underwriter, the Pension Trust or CBI; provided, further, that in no event shall
the number of Shares that any Underwriter has agreed to purchase pursuant to
this Agreement be increased pursuant to this Section 9 by an amount in excess of
one-ninth of such Shares without the written consent of such Underwriter. In the
event of a default by any Underwriter as set forth in this Section 9, the
Closing Date shall be postponed for such period, not exceeding seven days, as
the Representatives shall determine in order that the required changes in the
CBI Registration Statement and the CBI Prospectus or in any other documents or
arrangements may be effected. Nothing contained in this Agreement shall relieve
any defaulting Underwriter of its liability, if any, to CBI, the Pension Trust
and any nondefaulting Underwriter for damages occasioned by its default
hereunder.
10. Termination. This Agreement shall be subject to termination in the
absolute discretion of the Representatives, by notice given to CBI and the
Pension Trust prior to delivery of and payment for the Shares, if prior to such
time (i) trading in any securities of CBI shall have been suspended by the
Commission or on any exchange or over-the-counter market or trading in
securities generally on the NYSE, the American Stock Exchange, the NASDAQ
National Market System or the CSE shall have been suspended or limited or
minimum prices shall have been established on any such Exchange or System, (ii)
a banking moratorium shall have been declared either by Federal or New York
State authorities or (iii) there shall have occurred any outbreak or escalation
of hostilities, declaration by the United States of a national emergency or war
or other calamity or crisis the effect of which on financial markets is such as
to make it, in the judgment of the Representatives, impracticable or inadvisable
to proceed with the offering or delivery of the Shares as contemplated by the
CBI Prospectus (exclusive of any supplement thereto).
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of CBI
or its officers, of the
25
26
Pension Trust, of Bankers Trust (in its corporate and in its fiduciary capacity)
and its officers, and of the Underwriters set forth in or made pursuant to this
Agreement will remain in full force and effect, regardless of any investigation
made by or on behalf of any Underwriter, the Pension Trust or CBI or any of the
officers, directors or controlling persons referred to in Section 8 hereof, and
will survive delivery of and payment for the Shares. The provisions of Sections
7 and 8 hereof shall survive the termination or cancellation of this Agreement.
12. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or telegraphed and confirmed to them, care of Xxxxxx Xxxxxxx & Co.
Incorporated, at 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, attention of the Legal
Department; if sent to CBI, will be mailed, delivered, telegraphed and confirmed
to it at 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxx 00000, attention of Xxxxx
Xxxxx; or if sent to the Pension Trust, will be mailed, delivered, telegraphed
and confirmed to it at Bankers Trust Company, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, attention of Xxxxx X. Xxxxxxxx.
13. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 8 hereof, and no
other person will have any right or obligation hereunder.
14. Applicable Law. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
26
27
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among CBI,
the Pension Trust, Bankers Trust (with respect to Section 1(c)) and the several
Underwriters.
Very truly yours,
Cincinnati Xxxx Inc.
By: _____________________________
Name:
Title:
Cincinnati Xxxx Pension Plans Trust
By: Bankers Trust Company, Trustee
By: _____________________________
Name:
Title:
Bankers Trust Company
By: _____________________________
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Xxxxxx Xxxxxxx & Co. Incorporated
Salomon Brothers Inc
For themselves and the other several
Underwriters named in Schedule I
to the foregoing Agreement.
By: Xxxxxx Xxxxxxx & Co. Incorporated
By: ___________________________
Name:
Title:
27
28
Xxxxxx Xxxxxxx & Co. International Limited
Salomon Brothers International Limited
For themselves and the other several
Underwriters named in Schedule II
to the foregoing Agreement.
By: Xxxxxx Xxxxxxx & Co. International Limited
By: ______________________________________
Name:
Title:
28
29
SCHEDULE I
U.S. Underwriters
Number of Firm Shares
Underwriters to be Purchased
------------ ---------------
Xxxxxx Xxxxxxx & Co. Incorporated.........
Salomon Brothers Inc......................
----------
Total U.S. Firm Shares ......... 1,600,000
==========
29
30
SCHEDULE II
International Underwriters
Number of Firm Shares
Underwriters to be Purchased
------------ ---------------
Xxxxxx Xxxxxxx & Co. International Limited.............
Salomon Brothers International Limited.................
--------
Total International Firm Shares ........ 400,000
========
30
31
EXHIBIT A
Cincinnati Xxxx Inc.
Public Offering of Common Shares
November __, 1996
Xxxxxx Xxxxxxx & Co. Incorporated
Salomon Brothers Inc
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxxx & Co. International Limited
Salomon Brothers International Limited
c/o Morgan Xxxxxxx & Co. International Limited
00 Xxxxx Xxxxxx
Xxxxxx Xxxxx
Xxxxxx X00 0XX
Xxxxxxx
Ladies and Gentlemen:
This letter is being delivered to you in connection with the
proposed Underwriting Agreement (the "Underwriting Agreement"), between
Cincinnati Xxxx Inc., an Ohio corporation ("CBI"), Cincinnati Xxxx Pension Plans
Trust and each of you as representatives (the "Representatives") of a group of
Underwriters named therein, relating to an underwritten public offering (the
"Public Offering") of common shares, par value $1.00 per share (the "CBI Common
Stock"), of CBI.
In order to induce you and the other Underwriters to enter
into the Underwriting Agreement and to continue your and their efforts in
connection with the Public Offering, the undersigned hereby agrees that, without
the prior written consent of the Representatives on behalf of the Underwriters,
the undersigned will not, during the period commencing on the date hereof and
ending 90 days after the date of the final prospectus relating to the Public
Offering (the "CBI Prospectus"), (1) offer, pledge, sell, contract to sell, sell
any option or contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant to purchase, or otherwise transfer or dispose
of, directly or indirectly, any shares of CBI Common Stock or any securities
convertible into or exercisable or exchangeable for CBI Common Stock (whether
such shares or any such securities are now owned by the undersigned or are
hereafter acquired), or (2) enter into any swap or other arrangement that
transfers to another, in whole or in part, any of the economic consequences of
ownership of the CBI Common Stock, whether any such transaction described in
clause (1) or (2) above is to be settled by delivery of CBI Common Stock or such
other securities, in cash or otherwise; provided, however, that the undersigned
may sell up to (x) 5,000 shares of CBI Common Stock or (y) 15% of the sum of the
number of shares
31
32
of CBI Common Stock that are owned by the undersigned on the date of this letter
and the number of shares of CBI Common Stock that may be purchased by the
undersigned pursuant to currently exercisable options owned by the undersigned
on the date of this letter (whichever of (x) or (y) is greater) so long as the
aggregate amount of shares of CBI Common Stock sold during such 90-day period by
all executive officers or directors of CBI who have entered into an agreement
with the Underwriters in connection with the Public Offering similar to this
letter agreement does not exceed 200,000 shares of CBI Common Stock.* In
addition, the undersigned agrees that, without the prior written consent of the
Representatives on behalf of the Underwriters, the undersigned will not, during
the period commencing on the date hereof and ending 90 days after the date of
the CBI Prospectus, make any demand for or exercise any right with respect to,
the registration of any shares of CBI Common Stock or any security convertible
into or exercisable or exchangeable for CBI Common Stock.
Whether or not the Public Offering actually occurs depends on
a number of factors, including market conditions. Any Public Offering will only
be made pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between CBI, the Cincinnati Xxxx Pension Plans Trust and the
Underwriters.
If for any reason the Underwriting Agreement shall be
terminated prior to the Closing Date (as defined in the Underwriting Agreement),
the agreement set forth above shall likewise be terminated.
Yours very truly,
__________________________
[Name]
----------------
* Proviso applies only to letters from executive officers and directors of
CBI.
32
