Exhibit 1
HOUSEHOLD INTERNATIONAL, INC.
18,700,000 SHARES OF COMMON STOCK
Underwriting Agreement
October 24, 2002
Xxxxxxx, Xxxxx & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Dear Sirs:
Household International, Inc., a Delaware corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to Xxxxxxx, Sachs & Co. (the "Underwriter") an aggregate of 18,700,000 shares of
common stock, with a par value of $1.00 per share, of the Company (the
"Shares").
1. The Company represents and warrants to, and agrees with, the
Underwriter that:
(a) The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-3 (No. 333-60510)
relating to securities of the Company, including the Shares, and the
offering thereof from time to time in accordance with Rule 415 under the
Securities Act of 1933 (the "1933 Act") and has filed such amendments
thereto as may have been required to the date hereof. Such registration
statement, as amended, has been declared effective by the Commission, and no
stop order suspending the effectiveness of such registration statement has
been issued and no proceeding for that purpose has been instituted or
threatened by the Commission (any prospectus subject to completion included
in such registration statement or filed with the Commission pursuant to Rule
424 of the rules and regulations of the Commission under the 1933 Act, being
hereinafter called a "Preliminary Prospectus"; the various parts of such
registration statement including all exhibits thereto and the documents
incorporated by reference in the prospectus contained in the registration
statement at the time such part of the registration statement became
effective, being hereinafter called the "Registration Statement"; the
prospectus related to the Shares, in the form in which it has most recently
been filed, or transmitted for filing with the Commission on or prior to the
date of this Agreement, being hereinafter called the
"Prospectus"; any reference herein to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to the applicable form under the
1933 Act, as of the date of such Preliminary Prospectus or Prospectus, as
the case may be; any reference to any amendment or supplement to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include any documents filed after the date of such Preliminary Prospectus or
Prospectus, as the case may be, under the Securities Exchange Act of 1934,
as amended (the "1934 Act"), and incorporated by reference in such
Preliminary Prospectus or the Prospectus, as the case may be; any reference
to any amendment to the Registration Statement shall be deemed to include
any annual report of the Company filed pursuant to Section 13(a) or 15(d) of
the 1934 Act after the effective date of the Registration Statement that is
incorporated by reference in the Registration Statement; and any reference
to the Prospectus as amended or supplemented shall be deemed to refer to the
Prospectus as amended or supplemented in relation to the Shares in the form
in which it is filed with the Commission pursuant to Rule 424(b) under the
1933 Act in accordance with Section 5(a) hereof, including any documents
incorporated by reference therein as of the date of such filing);
(b) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the 1933 Act or
the 1934 Act, as applicable, and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and any
further documents so filed and incorporated by reference in the Prospectus
and in the Prospectus as amended or supplemented, when they become effective
or are filed with the Commission, as the case may be, will conform in all
material respects to the requirements of the 1933 Act or the 1934 Act, as
applicable, and the rules and regulations of the Commission thereunder and
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information furnished in
writing to the Company by the Underwriter expressly for use in the
Prospectus as amended or supplemented relating to the Shares;
(c) The Registration Statement and the Prospectus conform, and any
amendments or supplements thereto will conform, in all material respects to
the requirements of the 1933 Act and the rules and regulations of the
Commission thereunder; the Registration Statement and any amendment thereof
(including the filing of any annual report on Form 10-K), at the time it
became effective, did not contain an untrue statement of 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, at the time
the Registration Statement became effective did not, as amended or
supplemented as of the date hereof does not, and as amended or supplemented
at the Time of Delivery (as hereinafter defined) will not, contain an untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements
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therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that this representation and warranty shall
not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by the
Underwriter expressly for use in the Prospectus as amended or supplemented
relating to Shares;
(d) The financial statements included in the Registration Statement and
Prospectus present fairly, in all material respects, the financial position
of the Company and its subsidiaries as of the dates indicated and the
results of their operations for the periods specified; except as otherwise
stated in the Registration Statement or Prospectus, said financial
statements have been prepared in conformity with generally accepted
accounting principles applied on a basis which is consistent during the
periods involved;
(e) 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 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, which is material to the Company and its subsidiaries considered
as one enterprise, otherwise than as set forth or contemplated in the
Prospectus; and, since the respective dates as of which information is given
in the Registration Statement and the Prospectus, there has not been any
material adverse change in or affecting the general affairs or management or
the consolidated financial position, shareholders' equity or results of
operations of the Company and its subsidiaries considered as one enterprise
otherwise than as set forth or contemplated in the Prospectus;
(f) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware with
corporate power and authority to own, lease and operate its properties and
conduct its business as described in the Registration Statement; and the
Company is duly qualified as a foreign corporation to transact business and
is in good standing in each jurisdiction in which the character or location
of its properties or the nature or the conduct of its business requires such
qualification, except for any failures to be so qualified or to be in good
standing which, taken as a whole, are not material to the Company and its
subsidiaries considered as one enterprise;
(g) Each subsidiary of the Company which is a "significant subsidiary"
as defined in Rule 405 of Regulation C of the rules and regulations
promulgated under the 1933 Act (a "Significant Subsidiary") has been duly
incorporated or organized and is validly existing as a corporation or other
corporate entity in good standing, if applicable, under the laws of the
jurisdiction of its incorporation or organization, has corporate power and
authority to own, lease and operate its properties and conduct its business
as described in the Registration Statement and is duly qualified as a
foreign corporation, if required, to transact business and is in good
standing, if applicable, in each jurisdiction in which the character or
location of its properties or the nature or the conduct of its business
requires such qualification, except for any failures to be so qualified or
to be in
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good standing which, taken as a whole, are not material to the Company and
its subsidiaries considered as one enterprise; all of the issued and
outstanding capital stock of each such Significant Subsidiary has been duly
authorized and validly issued and is fully paid and non-assessable; and the
capital stock of each such Significant Subsidiary owned by the Company,
directly or through its subsidiaries, is owned free and clear of any
mortgage, pledge, lien, encumbrance, claim or equity;
(h) The authorized, issued and outstanding capital stock of the Company
is as set forth in the Prospectus (except for subsequent repurchases under
the Company's stock repurchase program and subsequent issuances pursuant to
reservations, agreements, employee benefit plans or the exercise of
convertible securities referred to in the Prospectus); the Shares to be
issued and sold by the Company to the Underwriter hereunder have been duly
authorized for issuance and sale and when the Shares are issued and
delivered against payment therefor as provided herein, the Shares will be
validly issued and fully paid and non-assessable and will conform in all
material respects to all statements relating thereto contained in the
Prospectus; and all corporate action required to be taken for the
authorization, issue and sale of the Shares has been validly and
sufficiently taken;
(i) The issue and sale of the Shares by the Company and the compliance
by the Company with all of the provisions of this Agreement and the
consummation of the transactions herein contemplated have been duly
authorized by all necessary corporate action and will not conflict with or
constitute a breach of, or default under, or result in the creation or i
imposition of any lien, charge or encumbrance upon any property or assets of
the Company or any of its subsidiaries pursuant to, any material contract,
indenture, mortgage, loan agreement, note, lease or other instrument to
which the Company or any of its subsidiaries is a party or by which it or
any of them may be bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject (except for conflicts,
breaches or defaults which would not, individually or in the aggregate, be
materially adverse to the Company and its subsidiaries taken as a whole or
materially adverse to the transactions contemplated by this Agreement), nor
will such action result in any violation of the provisions of the charter or
by-laws of the Company or, to the best of its knowledge, any law,
administrative regulation or administrative or court decree; and no consent,
approval, authorization or order of any court or governmental authority or
agency is required for the consummation by the Company of the transactions
contemplated by this Agreement, except such as may be required under the
1933 Act or state securities or Blue Sky laws;
(j) The Company and its Significant Subsidiaries possess adequate
certificates, authorities or permits issued by the appropriate state,
federal or foreign regulatory agencies or bodies necessary to conduct the
business now operated by them, except such certificates, authorities or
permits which are not material to such conduct of their business, and
neither the Company nor any of its Significant Subsidiaries has received any
notice of proceedings relating to the revocation or modification of any such
certificate, authority or permit which, singly or in the aggregate, if the
subject of any unfavorable decision, ruling or finding, would materially
adversely affect the conduct of
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the business, operations, financial condition or income of the Company and
its subsidiaries considered as one enterprise;
(k) There are no legal or governmental proceedings pending, other than
those referred to in the Prospectus, to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any of
its subsidiaries is the subject, other than proceedings which are not
reasonably expected, individually or in the aggregate, to have a material
adverse effect on the consolidated financial position, shareholders' equity
or results of operations of the Company and its subsidiaries considered as
one enterprise; and, to the best of the Company's knowledge, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others; and
(l) To the best of the Company's knowledge, KPMG LLP, who have
certified certain financial statements of the Company and its subsidiaries,
are independent public accountants as required by the 1933 Act and the rules
and regulations of the Commission thereunder.
(m) The Company is not and, after giving effect to the offering and
sale of the Shares, will not be an "investment company," as such term is
defined in the Investment Company Act of 1940, as amended.
2. Subject to the terms and conditions herein set forth, the Company
agrees to issue and sell to the Underwriter, and the Underwriter agrees to
purchase from the Company, at a purchase price per Share of $21.40, 18,700,000
Shares.
3. Upon the authorization by you of the release of the Shares, the
Underwriter proposes to offer the Shares for sale upon the terms and conditions
set forth in the Prospectus.
4. Certificates in definitive form for the Shares to be purchased by
the Underwriter hereunder, and in such denominations and registered in such
names as Xxxxxxx, Xxxxx & Co. may request upon at least forty-eight hours prior
notice to the Company, shall be delivered by or on behalf of the Company to the
Underwriter, against payment by the Underwriter of the purchase price therefor
by wire transfer of Federal (same day) funds to the account specified by the
Company to Xxxxxxx, Sachs & Co. at least forty-eight hours in advance. The time
and date of such delivery and payment shall be 9:00 a.m., Chicago time, on
October 29, 2002, or at such other time and date as the Underwriter and the
Company may agree upon in writing. Such time and date for delivery is herein
called the "Time of Delivery."
5. The Company agrees with the Underwriter:
(a) To prepare the Prospectus as amended or supplemented relating to
the Shares in a form approved by the Underwriter and to transmit for filing
such Prospectus pursuant to Rule 424(b) under the 1933 Act so that it is
reasonably expected that such Prospectus will be filed not later than the
Commission's close of business on the second business day following the
execution and delivery of this Agreement, to make no further
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amendment or any supplement to the Registration Statement or Prospectus as
amended or supplemented prior to the Time of Delivery which shall be
disapproved by the Underwriter promptly after reasonable notice thereof; to
advise the Underwriter, 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 Underwriter 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 1934 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
Shares; to advise the Underwriter, 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
prospectus, of the suspension of the qualification of the Shares 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 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 prospectus or suspending any such qualification, to use
promptly its best efforts to obtain its withdrawal;
(b) Promptly from time to time to take such action as the Underwriter
may reasonably request to qualify the Shares for offering and sale under the
securities laws of such jurisdictions as the Underwriter may request 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 Shares, 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;
(c) To furnish the Underwriter with copies of the Prospectus as amended
or supplemented relating to the Shares in such quantities as the Underwriter
may from time to time reasonably request, and, if the delivery of a
prospectus is required at any time prior to the expiration of nine months
after the time of issue of the Prospectus as amended or supplemented in
connection with the offering or sale of the Shares and if at such time any
event shall have occurred as a result of which such 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 during such period to further amend or supplement the
Prospectus as then amended or supplemented or to file under the 1934 Act any
document incorporated by reference in the Prospectus in order to comply with
the 1933 Act or the 1934 Act, to notify the Underwriter and to file such
document and to prepare and furnish without charge to the Underwriter and to
any dealer in securities as many copies as the Underwriter may from time to
time reasonably request of an amended Prospectus or a supplement to the
Prospectus which will correct such statement or omission or effect such
compliance, and in case the Underwriter is required
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to deliver a prospectus in connection with sales of any of the Shares at any
time nine months or more after the time of issue of the Prospectus, upon the
Underwriter's request but at the expense of the Underwriter, to prepare and
deliver to the Underwriter as many copies as the Underwriter may request of
an amended or supplemented Prospectus complying with Section 10(a)(3) of the
1933 Act;
(d) To make generally available to its security holders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)
under the 0000 Xxx) an earning statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the 1933 Act and
the rules and regulations thereunder (including, at the option of the
Company, Rule 158);
(e) During the period beginning from the date hereof and continuing to
and including the date ninety days after the date of this Agreement, not to
offer, sell, contract to sell or otherwise dispose of any securities of the
Company (other than pursuant to employee stock option or benefit plans, on
the conversion of convertible securities outstanding on the date of this
Agreement or in connection with any acquisition described in the Prospectus)
which are substantially similar to the Shares, without the Underwriter's
prior written consent;
(f) To furnish to its stockholders as soon as practicable after the end
of each fiscal year an annual report (including a balance sheet and
statements of income and stockholders' equity and, as required, statements
of cash flow or statement of changes in financial condition of the Company
and its consolidated subsidiaries certified by independent public
accountants) and, as soon as practicable after the end of each of the first
three quarters of each fiscal year (beginning with the fiscal quarter ending
after the effective date of the Registration Statement), consolidated
summary financial information of the Company and its subsidiaries for such
quarter in reasonable detail; and
(g) To use its best effort to list, subject to notice of issuance, the
Shares on the New York Stock Exchange.
(h) To obtain and deliver to the Underwriter, within 14 days after the
Time of Delivery, copies of an agreement executed by the directors and
executive officers of the Company, substantially to the effect as set forth
in subsection 5(e) hereof and in form and substance satisfactory to the
Underwriter.
6. The Company covenants and agrees with the Underwriter that the
Company will pay or cause to be paid the following: (i) the fees, disbursements
and expenses of the Company's counsel and accountants in connection with the
registration of the Shares under the 1933 Act and all other expenses in
connection with the preparation, printing and filing of the Registration
Statement, any Preliminary Prospectus and the Prospectus and amendments and
supplements thereto and the mailing and delivering of copies thereof to the
Underwriter and dealers; (ii) the cost of processing and reproducing this
Agreement, the Blue Sky Memorandum and any other documents in connection with
the offering, purchase, sale and delivery of the
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Shares; (iii) all expenses in connection with the qualification of the Shares
for offering and sale under state securities laws as provided in Section 5(b)
hereof, including the fees and disbursements of counsel for the Underwriter in
connection with such qualification and in connection with the Blue Sky survey;
(iv) the cost of preparing stock certificates; (v) the cost and charges of any
transfer agent and registrar; and (vi) all other costs and expenses incident to
the performance of its obligations hereunder which are not otherwise
specifically provided for in this Section. It is understood, however, that,
except as provided in this Section, Section 8 and Section 11 hereof, the
Underwriter will pay all of its own costs and expenses, including the fees of
their counsel, stock transfer taxes on resale of any of the Shares by them, and
any advertising expenses connected with any offers they may make.
7. The obligations of the Underwriter hereunder shall be subject, in
their discretion, to the condition that all representations and warranties and
other statements of the Company herein are, at and as of the Time of Delivery,
true and correct, the condition that the Company shall have performed all of its
obligations hereunder theretofore to be performed, and the following additional
conditions:
(a) The Prospectus as amended or supplemented relating to the Shares
shall have been filed with the Commission pursuant to Rule 424(b) under the
1933 Act within the applicable time period prescribed for such filing by the
rules and regulations under the 1933 Act and in accordance with Section 5(a)
hereof; 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
all requests for additional information on the part of the Commission shall
have been complied with to the Underwriter's reasonable satisfaction;
(b) XxXxxxxxx, Will & Xxxxx, counsel for the Underwriter, shall have
furnished to the Underwriter such opinion or opinions, dated the Time of
Delivery, with respect to the incorporation of the Company, the validity of
the Shares being delivered at such Time of Delivery, the Registration
Statement, the Prospectus, the Prospectus as amended or supplemented
relating to the Shares and other related matters as the Underwriter may
reasonably request, and such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon such
matters;
(c) Counsel for the Company shall have furnished to the Underwriter his
written opinion, dated the Time of Delivery, in form and substance
satisfactory to the Underwriter, to the effect that:
(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of
Delaware, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus;
(ii) The Company has an authorized capitalization as set forth in
the Prospectus, and all of the issued shares of capital stock of the
Company
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(including the Shares) have been duly and validly authorized and issued
and are fully paid and non-assessable;
(iii) The Company has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the laws
of each other jurisdiction in which it owns or leases properties, or
conducts any business, so as to require such qualification, or is
subject to no material liability or disability by reason of failure to
be so qualified in any such jurisdiction;
(iv) Each Significant Subsidiary of the Company has been duly
incorporated or organized and is validly existing as a corporation or
other corporate entity in good standing, if applicable, under the laws
of its jurisdiction of incorporation or organization; and all of the
issued shares of capital stock of each Significant Subsidiary have been
duly and validly authorized and issued, are fully paid and
non-assessable and are owned directly or indirectly by the Company,
free and clear of all liens, encumbrances, equities or claims;
(v) This Agreement has been duly authorized, executed and
delivered by the Company;
(vi) The Shares have been duly authorized, executed and delivered
and have been validly issued and are fully paid and non-assessable and
no holder thereof will be subject to personal liability by reason of
being such a holder; the Shares will not be subject to the preemptive
rights of any stockholder of the Company and all corporate action
required to be taken for the authorization, issue and sale of the
Shares has been validly and sufficiently taken;
(vii) To the best of such counsel's knowledge and other than as
set forth in the Prospectus as amended or supplemented, there are no
legal or governmental proceedings pending to which the Company or any
of its subsidiaries is a party or of which any property of the Company
or any of its subsidiaries is the subject which, if determined
adversely to the Company or any of its subsidiaries, would individually
or in the aggregate have a material adverse effect on the consolidated
financial position, stockholders' equity or results of operations of
the Company and its subsidiaries considered as one enterprise; and, to
the best of such counsel's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by
others;
(viii) The issue and sale of the Shares by the Company and the
compliance by the Company with all of the provisions of this Agreement
and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or violation
of any of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which the Company or
any of its subsidiaries is a party or by which the Company or any of
its subsidiaries is bound or to which any of the property or assets of
the Company
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or any of its subsidiaries is subject (except for conflicts, breaches
and defaults which would not, individually or in the aggregate, be
materially adverse to the Company and its subsidiaries considered as
one enterprise), nor will such action result in any violation of the
provisions of the Certificate of Incorporation of the Company or any
statute or any order, rule or regulation known to such counsel of any
court or governmental agency or body having jurisdiction over the
Company or any of its subsidiaries or any of their properties;
(ix) No consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body
is required for the issue and sale of the Shares or the consummation by
the Company of the transactions contemplated by this Agreement, except
the registration under the 1933 Act of the Shares, and such consents,
approvals, authorizations, registrations or qualifications which may be
required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Shares by the Underwriter;
(x) The documents incorporated by reference in the Prospectus as
amended or supplemented or any further amendment or supplement thereto
made by the Company prior to the Time of Delivery (other than the
financial statements and related schedules therein, as to which such
counsel need express no opinion), when they became effective or were
filed with the Commission, as the case may be, complied as to form in
all material respects with the requirements of the 1933 Act or the 1934
Act, as applicable, and the rules and regulations of the Commission
thereunder; and he has no reason to believe that any of such documents,
when such documents became effective or were so filed, as the case may
be, contained in the case of a registration statement which became
effective under the 1933 Act, 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, in the
case of other documents which were filed under the 1934 Act with the
Commission, an untrue statement of a material fact or omitted to state
a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made when such
documents were so filed, not misleading; and
(xi) The Registration Statement and the Prospectus and any further
amendments and supplements thereto made by the Company prior to the
Time of Delivery (other than the financial statements and related
schedules therein, as to which such counsel need express no opinion)
comply as to form in all material respects with the requirements of the
1933 Act and the rules and regulations thereunder; he has no reason to
believe that, as of its effective date, the Registration Statement or
any further amendment thereto made by the Company prior to the Time of
Delivery (other than the financial statements and related schedules
therein, as to which such counsel need express not opinion) contained
an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading or
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that, as of its date, the Prospectus as amended or supplemented or any
further amendment or supplement thereto made by the Company prior to
the Time of Delivery (other than the financial statements and related
schedules therein, as to which such counsel need express no opinion)
contained an untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein, in the light of
the circumstances in which they were made, not misleading or that, as
of the Time of Delivery (other than the financial statements and
related schedules therein, as to which such counsel need express no
opinion) contains an untrue statement of a material fact or omits to
state a material fact necessary to make the statements therein, in the
light of the circumstances in which they were made, not misleading; and
they do not know of any amendment to the Registration Statement
required to be filed or of any contracts or other documents of a
character required to be filed as an exhibit to the Registration
Statement or required to be incorporated by reference into the
Prospectus or required to be described in the Registration Statement or
the Prospectus which are not filed or incorporated by reference or
described as required;
(d) On the date of this Agreement and at the Time of Delivery, KPMG LLP
or other independent certified public accountants acceptable to the
Underwriter shall have furnished to the Underwriter a letter or letters,
dated the date of delivery thereof, in form and substance satisfactory to
the Underwriter, to the effect set forth in Annex I hereto;
(e) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the respective dates 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, which is material
to the Company and its subsidiaries considered as one enterprise, otherwise
than as set forth as contemplated in the Prospectus as amended or
supplemented, and (ii) since the respective dates as of which information is
given in the Prospectus as amended or supplemented there shall not have been
any material adverse change, or any development involving a prospective
material adverse change, in or affecting the business affairs, financial
position, stockholders' equity or results of operations of the Company and
its subsidiaries considered as one enterprise otherwise than as set forth or
contemplated in the Prospectus as amended or supplemented;
(f) On or after the date hereof no downgrading shall have occurred in
the rating accorded the Company's debt securities or preferred stock by any
"nationally recognized statistical rating organization," as that term is
defined by the Commission for purposes of Rule 436(g)(2) under the 1933 Act;
(g) On or after the date hereof there shall not have occurred any of
the following: (i) a suspension or material limitation in trading in the
Company's common stock or in securities generally on the New York Stock
Exchange; (ii) a general moratorium on commercial banking activities in New
York or Illinois declared by either Federal or state authorities; or (iii)
the outbreak or material escalation of hostilities
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involving the United States or the declaration by the United States of a
national emergency or war, or any other calamity or crisis, if the effect of
any such event specified in this Clause (iii) in the Underwriter's judgment
makes it impracticable or inadvisable to proceed with the public offering or
the delivery of the Shares being delivered at the Time of Delivery on the
terms and in the manner contemplated in the Prospectus as amended and
supplemented; and
(h) The Company shall have furnished or caused to be furnished to the
Underwriter at such Time of Delivery certificates of officers of the Company
satisfactory to the Underwriter as to the accuracy of the representations
and warranties of the Company herein at and as of such Time of Delivery, as
to the performance by the Company of all of its obligations hereunder to be
performed at or prior to such Time of Delivery, as to the matters set forth
in subsections (a) and (e) of this Section and as to such matters as the
Underwriter may reasonably request.
8. (a) The Company will indemnify and hold harmless the Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
the Underwriter may become subject, under the 1933 Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment 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 will reimburse the Underwriter for any legal or
other expenses reasonably incurred by the Underwriter in connection with
investigating or defending any such action or claim 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 or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration Statement
or the Prospectus or any such amendment or supplement thereto in reliance upon
and in conformity with written information furnished to the Company by the
Underwriter expressly for use therein.
(b) The Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the 1933 Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of
or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment 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, in each case to the extent, but only
to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in any Preliminary Prospectus, the
Registration Statement or the Prospectus or any such amendment or supplement
in reliance upon and in conformity with written information furnished to the
Company by the Underwriter expressly for use therein; and will reimburse the
Company
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for any legal or other expenses reasonably incurred by the Company in
connection with investigating or defending any such action or claim as such
expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have
to any indemnified party otherwise than under such subsection. In case any
such action shall be brought against any indemnified party and it shall
notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
shall wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel satisfactory to such indemnified
party (who shall not, except with the consent of the indemnified party, be
counsel to the indemnifying party), and, after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such indemnified
party under such subsection for any legal expenses of other counsel or any
other expenses, in each case subsequently incurred by such indemnified
party, in connection with the defense thereof other than reasonable costs of
investigation.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or action in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand, and
the Underwriter on the other, from the offering of the Shares. If, however,
the allocation provided by the immediately preceding sentence is not
permitted by applicable law or if the indemnified party failed to give the
notice required under subsection (c) above, then each indemnifying party
shall contribute to such amount paid or payable by such indemnified party in
such proportion as is appropriate to reflect not only such relative benefits
but also the relative fault of the Company on the one hand and the
Underwriter on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the
Underwriter on the other shall be deemed to be in the same proportion as the
total net proceeds from the offering of the Shares purchased under this
Agreement (before deducting expenses) received by the Company bear to the
total underwriting discounts and commissions received by the Underwriter
with respect to the Shares purchased under this Agreement, in each case as
set forth in the table on the cover page of the Prospectus as amended or
supplemented relating to the Shares. The relative fault shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company on the one hand
or the Underwriter on the other and the parties' relative
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intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the Underwriter agree
that it would not be just and equitable if contributions pursuant to this
subsection (d) were determined by pro rata allocation or by any other method
of allocation which does not take account of the equitable considerations
referred to above in this subsection (d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities
(or actions in respect thereof) referred to above in this subsection (d)
shall be deemed to include 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 subsection (d),
the Underwriter shall not be required to contribute any amount in excess of
the amount by which the total price at which the Shares underwritten by it
and distributed to the public were offered to the public exceeds the amount
of any damages which the Underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 0000 Xxx) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions to each person, if any, who
controls the Underwriter within the meaning of the 1933 Act; and the
obligations of the Underwriter under this Section 8 shall be in addition to
any liability which the Underwriter may otherwise have and shall extend,
upon the same terms and conditions, to each officer and director of the
Company and to each person, if any, who controls the Company within the
meaning of the 1933 Act.
9. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the Underwriter, as set forth in this
Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of the Underwriter or any controlling person of the Underwriter, or the Company,
or any officer or director or controlling person of the Company, and shall
survive delivery of and payment for the Shares.
10. If the Shares to be delivered at the Time of Delivery are not
purchased by the Underwriter because a condition precedent specified in Section
7(g) is not satisfied, the Company shall not then be under liability to the
Underwriter except as provided in Section 6 and Section 8 hereof; but, if for
any other reason, any Shares are not delivered by or on behalf of the Company as
provided herein, the Company will reimburse the Underwriter for all
out-of-pocket expenses approved in writing by the Underwriter, including fees
and disbursements of counsel reasonably incurred by the Underwriter in making
preparations for the purchase, sale and delivery of the Shares not so delivered,
but the Company shall then be under no further liability to the Underwriter in
respect of the Shares not so delivered except as provided in Section 6 and
Section 8 hereof.
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11. All statements, requests, notices and agreements hereunder shall be
in writing, and if to the Underwriter shall be delivered or sent by mail, telex
or facsimile transmission to the Underwriter in care of Xxxxxxx, Xxxxx & Co., 00
Xxxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention: Registration Department; and if to
the Company shall be delivered or sent by mail, telex or facsimile transmission
to the address of the Company set forth in the Registration Statement,
Attention: Corporate Secretary; provided, however that any notice to the
Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by mail,
telex or facsimile transmission to the Underwriter at its address set forth in
its Underwriter's Questionnaire, or telex constituting such Questionnaire, which
address will be supplied to the Company by the Underwriter upon request. Any
such statements, requests, notices or agreements shall take effect at the time
of receipt thereof.
12. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriter, the Company and, to the extent provided in Sections
8 and 10 hereof, the officers and directors of the Company and each person who
controls the Company or the Underwriter, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of the
Shares from the Underwriter shall be deemed a successor or assign by reason
merely of such purchase.
13. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
14. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
15. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
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If the foregoing is in accordance with your understanding, please sign
and return to us four counterparts hereof, and upon acceptance hereof by you,
this letter and such acceptance hereof shall constitute a binding agreement
between the Underwriter and the Company.
Very truly yours,
Household International, Inc.
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
Accepted as of the date hereof:
------------------------------------
(Xxxxxxx, Sachs & Co.)
(Underwriting Agreement - Household International, Inc. - 10/24/02)
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Annex I
Pursuant to Section 7(d) of the Underwriting Agreement, KPMG LLP shall
furnish a letter or letters to the Underwriter to the effect that:
(i) They are independent certified public accountants with respect to
the Company and its subsidiaries within the meaning of the 1933 Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules examined by them and included or
incorporated by reference in the Registration Statement or the Prospectus
comply as to form in all material respects with the applicable accounting
requirements of the 1933 Act or the 1934 Act, as applicable, and the related
published rules and regulations thereunder;
(iii) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company for
the five most recent fiscal years included or incorporated by reference in
Item 6 of the Company's Annual Report on Form 10-K for the most recent
fiscal year agrees with the corresponding amounts (after restatement where
applicable) in the audited consolidated financial statements for such fiscal
years which were included or incorporated by reference in the Company's
Annual Reports on Form 10-K for such fiscal years;
(iv) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements of the Company
and its subsidiaries, inspection of the minute books of the Company and its
subsidiaries since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus, inquiries of
officials of the Company and its subsidiaries responsible for financial and
accounting matters and such other inquiries and procedures as may be
specified in such letter, nothing came to their attention that caused them
to be believe that:
(A) the unaudited condensed consolidated statement of income,
consolidated balance sheets and consolidated statements of cash flows
included or incorporated by reference in the Company's Quarterly
Reports on Form 10-Q incorporated by reference in the Prospectus, if
any, do not comply as to form in all material respects with the
applicable accounting requirements of the 1934 Act as it applied to
Form 10-Q and the related published rules and regulations thereunder or
are not in conformity with generally accepted accounting principles
applied on a basis substantially consistent with the basis for the
audited consolidated statements of cash flows included or incorporated
by reference in the Company's Annual Report on Form 10-K for the most
recent fiscal year;
(B) any other unaudited income statement data and balance sheet
items included in the Prospectus do not agree with the corresponding
items in the unaudited consolidated financial statements from which
such data and items were derived, and any such unaudited data and items
were not determined on a basis
substantially consistent with the basis for the corresponding amounts
in the audited consolidated financial statements included or
incorporated by reference in the Company's Annual Report on Form 10-K
for the most recent fiscal year;
(C) the unaudited financial statements which were not included in
the Prospectus but from which were derived the unaudited condensed
financial statements referred to in Clause (A) and any unaudited income
statement data and balance sheet items included in the Prospectus and
referred to in Clause (B) were not determined on a basis substantially
consistent with the basis for the audited financial statements included
or incorporated by reference in the Company's Annual Report on Form
10-K for the most recent year;
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus do
not comply as to form in all material respects with the applicable
accounting requirements of the 1933 Act and the published rules and
regulations thereunder or the pro forma adjustments have not been
properly applied to the historical amounts in the compilation of those
statements;
(E) as of the most recent date for which unaudited consolidated
financial statements of the Company are available, there have been any
changes in the consolidated long-term debt of the Company and its
subsidiaries or any changes in consolidated stockholders' equity, or
total assets or other items specified by the Underwriter, or any
changes in any other items specified by the Underwriter in each case as
compared with amounts shown in the latest audited balance sheet
included or incorporated by reference in the Prospectus, except in each
case for changes, increases or decreases which the Prospectus discloses
have occurred or may occur or which are described in such letter; and
(F) for the period from the date of the latest audited financial
statements included or incorporated by reference in the Prospectus to
the specified date referred to in Clause (E) there were any changes in
consolidated net revenues, net income after provision for credit losses
or the total or primary or fully diluted per share amounts of
consolidated net income or other items specified by the Underwriter, or
any changes in any other items specified by the Underwriter, in each
case as compared with the comparable period of the preceding year and
with any other period of corresponding length specified by the
Underwriter, except in each case for increases or decreases which the
Prospectus discloses have occurred or may occur or which are described
in such letter; and
(v) In addition to the examination referred to in their report(s)
included or incorporated by reference in the Prospectus and the limited
procedures, inspection of minute books, inquiries and other procedures
referred to in paragraphs (iii) and (iv) above, they have carried out
certain specified procedures, not constituting an examination in accordance
with generally accepted auditing standards, with respect to certain amounts,
percentages and financial information specified by the Underwriter which are
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derived from the general accounting records of the Company and its
subsidiaries, which appear in the Prospectus (excluding documents
incorporated by reference) or in Part II of, or in exhibits and schedules
to, the Registration Statement specified by the Underwriter or in documents
incorporated by reference in the Prospectus specified by the Underwriter,
and have compared certain of such amounts, percentages and financial
information with the accounting records of the Company and its subsidiaries
and have found them to be in agreement.
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