Exhibit 1.1
7,000,000 Equity Security Units
Equity Security Units
Toys "R" Us, Inc.
UNDERWRITING AGREEMENT
May _, 2002
CREDIT SUISSE FIRST BOSTON CORPORATION
XXXXXXX XXXXX XXXXXX INC.
FIRST UNION SECURITIES, INC.
BANC ONE CAPITAL MARKETS, INC.
BNY CAPITAL MARKETS, INC.
FLEET SECURITIES, INC.
MIZUHO INTERNATIONAL PLC
XX XXXXX SECURITIES CORPORATION
As Representatives of the Several Underwriters,
c/o Credit Suisse First Boston Corporation,
Eleven Madison Avenue,
New York, N.Y. 10010-3629
Dear Sirs:
1. Introductory. Toys "R" Us Inc., a Delaware
corporation (the "Company"), proposes to issue and sell 7,000,000 of the
Company's Equity Security Units (the "Firm Units") to the several underwriters
named in Schedule A hereto (the "Underwriters"), for whom Credit Suisse First
Boston Corporation ("CSFBC") and Xxxxxxx Xxxxx Xxxxxx Inc. ("SSB") are acting as
Representatives (the "Representatives"). In addition, the Company proposes to
sell to the Underwriters, at the option of the Underwriters, up to an additional
1,050,000 Units (the "Option Units") on the terms set forth in Section 3. The
Firm Units and the Option Units, if purchased, are hereinafter collectively
called the "Units."
Each Unit initially will consist of (a) a stock purchase
contract (the "Purchase Contract") under which the holder will agree to purchase
from the Company and the Company will agree to sell to the holder, on August 16,
2005 (the "Purchase Contract Date"), for $50, a number of shares (the "Shares")
of common stock, $0.10 par value per share, of the Company (the "Common Stock")
equal to the settlement rate then in effect pursuant to, and subject to
adjustment as set forth in the Purchase Contract Agreement (as defined below)
and (b) a Senior Note due 2007 of the Company (the "Senior Note"), having a
principal amount of $50.
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In accordance with the Purchase Contract Agreement, to be
dated as of May [ ], 2002 (the "Purchase Contract Agreement"), between the
Company and The Bank of New York, as purchase contract agent (the "Purchase
Contract Agent"), the Senior Note or Treasury security, as the case may be,
constituting a part of the Unit will be pledged by the Purchase Contract Agent,
on behalf of the holders of each Unit, to XX Xxxxxx Chase Bank, as collateral
agent (the "Collateral Agent"), and as the custodial agent (the "Custodial
Agent") pursuant to the Pledge Agreement, to be dated as of May [ ], 2002 (the
"Pledge Agreement"), among the Company, the Purchase Contract Agent, the
Collateral Agent, and XX Xxxxxx Xxxxx Bank, as securities intermediary, to
secure the holders' obligations to purchase Common Stock under the Purchase
Contracts. The rights and obligations of a holder of Units in respect of the
Senior Note, subject to the pledge thereof, and Purchase Contracts will be
evidenced by security certificates (the "Security Certificates") to be issued
pursuant to the Purchase Contract Agreement.
The Senior Notes are to be issued under an Indenture, the
"Base Indenture," to be dated as of May [ ], 2002 between the Company and The
Bank of New York, as Trustee (the "Trustee") as supplemented by the First
Supplemental Indenture, to be dated as of May [ ], 2002 between the Company and
the Trustee (the "Supplemental Indenture" and, together with the Base Indenture,
(the "Indenture")).
As used in this Agreement, the term "Transaction Agreements"
means this Agreement, the Purchase Contract Agreement (including the Purchase
Contracts), the Pledge Agreement, the Senior Notes, the Indenture and the
Supplemental Indenture.
2. Representations and Warranties of the Company. The
Company represents and warrants to, and agrees with, the several
Underwriters that:
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(a) A registration statement (No. 333-84254) relating to the
Units, including a form of prospectus, has been filed with the
Securities and Exchange Commission ("Commission") and either (i) has
been declared effective under the Securities Act of 1933, as amended
("Act"), and is not proposed to be amended or (ii) is proposed to be
amended by amendment or post-effective amendment. If such registration
statement ("initial registration statement") has been declared
effective, either (i) an additional registration statement ("additional
registration statement") relating to the Units may have been filed with
the Commission pursuant to Rule 462(b) ("Rule 462(b)") under the Act
and, if so filed, has become effective upon filing pursuant to such
Rule and the Units all have been duly registered under the Act pursuant
to the initial registration statement and, if applicable, the
additional registration statement or (ii) such an additional
registration statement is proposed to be filed with the Commission
pursuant to Rule 462(b) and will become effective upon filing pursuant
to such Rule and upon such filing the Units will all have been duly
registered under the Act pursuant to the initial registration statement
and such additional registration statement. If the Company does not
propose to amend the initial registration statement or if an additional
registration statement has been filed and the Company does not propose
to amend it, and if any post-effective amendment to either such
registration statement has been filed with the Commission prior to the
execution and delivery of this Agreement, the most recent amendment (if
any) to each such registration statement has been declared effective by
the Commission or has become effective upon filing pursuant to Rule
462(c) ("Rule 462(c)") under the Act or, in the case of the additional
registration statement, Rule 462(b). For purposes of this Agreement,
"Effective Time" with respect to the initial registration statement or,
if filed prior to the execution and delivery of this Agreement, the
additional registration statement means (i) if the Company has advised
the Representatives that it does not propose to amend such registration
statement, the date and time as of which such registration statement,
or the most recent post-effective amendment thereto (if any) filed
prior to the execution and delivery of this Agreement, was declared
effective by the Commission or has become effective upon filing
pursuant to Rule 462(c), or (ii) if the Company has advised the
Representatives that it proposes to file an amendment or post-effective
amendment to such registration statement, the date and time as of which
such registration statement, as amended by such amendment or
post-effective amendment, as the case may be, is declared effective by
the Commission. If an additional registration statement has not been
filed prior to the execution and delivery of this Agreement but the
Company has advised the Representatives that it proposes to file one,
"Effective Time" with respect to such additional registration statement
means the date and time as of which such registration statement is
filed and becomes effective pursuant to Rule 462(b). "Effective Date"
with respect to the initial registration statement or the additional
registration statement (if any) means the date of the Effective Time
thereof. The initial registration statement, as amended at its
Effective Time, including all material incorporated by reference
therein, including all information contained in the additional
registration statement (if any) and deemed to be a part of the initial
registration statement as of the Effective Time of the additional
registration statement pursuant to the General Instructions of the Form
on which it is filed and including all information (if any) deemed to
be a part of the initial registration statement as of its Effective
Time pursuant to Rule 430A(b) ("Rule 430A(b)") under the Act, is
hereinafter referred to as the "Initial Registration Statement." The
additional registration statement, as amended at its Effective Time,
including the contents of the initial registration statement
incorporated by reference therein and including all information (if
any) deemed to be a part of the additional registration statement as of
its Effective Time pursuant to Rule 430A(b), is hereinafter referred to
as the "Additional Registration Statement." The Initial Registration
Statement and the Additional Registration Statement are herein referred
to collectively as the "Registration Statements" and individually as a
"Registration Statement." The form of prospectus relating to the Units,
as first filed with the Commission pursuant to and in accordance with
Rule 424(b) ("Rule 424(b)") under the Act or (if no such filing is
required) as included in a Registration Statement, including all
documents incorporated by reference in such prospectus, is hereinafter
referred to as the "Prospectus." No document has been or will be
prepared or distributed in reliance on Rule 434 under the Act.
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(b) If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement: (i)
on the Effective Date of the Initial Registration Statement, the
Initial Registration Statement conformed in all material respects to
the requirements of the Act and the rules and regulations of the
Commission ("Rules and Regulations") and did not include any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading; (ii) on the Effective Date of the Additional
Registration Statement (if any), each Registration Statement conformed,
or will conform, in all material respects to the requirements of the
Act and the Rules and Regulations and did not include, or will not
include, any untrue statement of a material fact and did not omit, or
will not omit, to state any material fact required to be stated therein
or necessary to make the statements therein, not misleading; and (iii)
on the date of this Agreement, the Initial Registration Statement and,
if the Effective Time of the Additional Registration Statement is prior
to the execution and delivery of this Agreement, the Additional
Registration Statement each conforms, and at the time of filing of the
Prospectus pursuant to Rule 424(b) or (if no such filing is required)
at the Effective Date of the Registration Statement in which the
Prospectus is included, each Registration Statement and the Prospectus
will conform, in all material respects to the requirements of the Act
and the Rules and Regulations, and the Registration Statement when it
became effective did not contain, any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and the
Prospectus 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 light of the circumstances under which they were made, not
misleading. If the Effective Time of the Initial Registration Statement
is subsequent to the execution and delivery of this Agreement: on the
Effective Date of the Initial Registration Statement, the Initial
Registration Statement and the Prospectus will conform in all material
respects to the requirements of the Act and the Rules and Regulations,
the Initial Registration Statement will not include any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading and the Prospectus 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 light of the circumstances
under which they were made, not misleading, and no Additional
Registration Statement has been or will be filed. The two preceding
sentences do not apply to statements in or omissions from a
Registration Statement or the Prospectus based upon written information
furnished to the Company by any Underwriter through the Representatives
specifically for use therein, it being understood and agreed that the
only such information is that described as such in Section 7(b) hereof.
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(c) The documents incorporated or deemed to be incorporated by
reference in the Registration Statements and the Prospectus, at the
time they were or hereafter are filed with the Commission, complied or
will comply, as the case may be, as to form in all material respects
with the requirements of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and the rules and regulations of the
Commission thereunder.
(d) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware,
with corporate power and authority to own its properties and conduct
its business as described in the Prospectus; and the Company is duly
qualified to do business as a foreign corporation in good standing in
all other jurisdictions in which its ownership or lease of property or
the conduct of its business requires such qualification, except where
the failure to be in good standing or to be so qualified would not,
individually or in the aggregate, have a material adverse effect on the
financial condition, business, properties and results of operations of
the Company and its subsidiaries taken as a whole ("Material Adverse
Effect").
(e) Each subsidiary of the Company listed on Schedule B hereto
(that purports to identify each subsidiary of the Company that
constitutes a "significant subsidiary" as such term is defined in Rule
1-02 of Regulation S-X) ("Significant Subsidiary") has been duly
incorporated and is an existing corporation in good standing under the
laws of the jurisdiction of its incorporation, with corporate power and
authority to own its properties and conduct its business as described
in the Prospectus; and each Significant Subsidiary of the Company is
duly qualified to do business as a foreign corporation in good standing
in all other jurisdictions in which its ownership or lease of property
or the conduct of its business requires such qualification, except
where the failure to be in good standing or to be so qualified would
not, individually or in the aggregate, have a Material Adverse Effect;
all of the issued and outstanding capital stock of each Significant
Subsidiary of the Company has been duly authorized and validly issued
and is fully paid and nonassessable; and the capital stock of each
Significant Subsidiary owned by the Company, directly or through
subsidiaries, is owned free from liens, encumbrances and security
interests, except as would not, individually or in the aggregate, have
a Material Adverse Effect.
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(f) The Company has the authorized, issued and outstanding
capitalization as set forth in the Prospectus as of the dates set forth
therein; all of the issued and outstanding shares of capital stock of
the Company have been duly authorized and validly issued, are fully
paid and nonassessable and conform in all material respects to the
description thereof contained in the Prospectus; none of the
outstanding shares of capital stock of the Company was issued in
violation of the preemptive or other similar rights of any security
holder of the Company.
(g) The Units and all other outstanding shares of capital
stock of the Company to be issued and sold by the Company pursuant
hereto have been duly authorized and at the applicable Closing Date (as
defined below), after payment therefor and delivery thereof in
accordance with this Agreement, will be validly issued, fully paid and
nonassessable and will conform in all material aspects to the
description thereof contained in the Prospectus; and the stockholders
of the Company have no preemptive or other similar rights with respect
to the Units.
(h) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings between the Company and any
person that would give rise to a valid claim against the Company or any
Underwriter for a brokerage commission, finder's fee or other like
payment in connection with this offering.
(i) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to file a
registration statement under the Act with respect to any securities of
the Company owned or to be owned by such person or to require the
Company to include such securities in the securities registered
pursuant to a Registration Statement or in any securities being
registered pursuant to any other registration statement filed by the
Company under the Act.
(j) The Securities are listed on The New York Stock Exchange,
subject to notice of issuance.
(k) No consent, approval, authorization, or order of, or
filing with, any governmental agency or body or any court is required
for the consummation by the Company of the transactions contemplated by
this Agreement in connection with the issuance and sale of the Units by
the Company, except such as have been obtained or made under the Act
and such as may be required under state or foreign securities or Blue
Sky laws or where the failure to obtain such consent, approval,
authorization or filing would not have a Material Adverse Effect.
(l) The execution, delivery and performance of this Agreement,
and the issuance and sale of the Units will not result in a breach or
violation of any of the terms and provisions of, or constitute a
default under, (a) any statute, any rule, regulation or order of any
governmental authority, agency or body or any court, (domestic or
foreign,) having jurisdiction over the Company or any Significant
Subsidiary of the Company or any of their properties, or (b) any
agreement or instrument to which the Company or any such Significant
Subsidiary is a party or by which the Company is bound or to which any
of the properties of the Company or any such Significant Subsidiary is
subject, or (c) the charter or by-laws of the Company, except, in the
case of clauses (a) and (b) only, for such breaches, violations or
defaults that would not, individually or in the aggregate, have a
Material Adverse Effect.
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(m) This Agreement has been duly authorized, executed and
delivered by the Company.
(n) Except as disclosed in the Prospectus, the Company and its
Significant Subsidiaries have good and marketable title to all real
properties and all personal property owned by them, in each case free
from liens, encumbrances and defects that would materially affect the
value thereof or materially interfere with the use made or to be made
thereof by them; and except as disclosed in the Prospectus, the Company
and its Significant Subsidiaries hold any leased real property or
buildings under valid and enforceable leases with no material
exceptions that would materially interfere with the use made or to be
made thereof by them.
(o) The Company and its Significant Subsidiaries possess or
have obtained all licenses, certificates, authorizations or permits
issued by appropriate governmental agencies or bodies necessary to
conduct the business now operated by them and have not received any
notice of proceedings relating to the revocation or modification of any
such license, certificate, authorization or permit that would,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
(p) No labor dispute with the employees of the Company or any
of its Significant Subsidiaries exists or, to the knowledge of the
Company, is threatened that would, individually or in the aggregate,
have a Material Adverse Effect.
(q) The Company and its subsidiaries own, possess or can
acquire on reasonable terms, adequate trademarks, trade names and other
rights to inventions, know-how, patents, copyrights, confidential
information and other intellectual property (collectively,
"intellectual property rights") necessary to conduct the business now
operated by them, or presently employed by them, and have not received
any notice of infringement of or conflict with asserted rights of
others with respect to any intellectual property rights that would,
individually or in the aggregate, have a Material Adverse Effect.
(r) Except as disclosed in the Prospectus, there are no legal
or government actions, suits or proceedings pending against or
affecting the Company, any of its Significant Subsidiaries or any of
their respective properties that, would, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect, or
would materially and adversely affect the ability of the Company to
perform its obligations under this Agreement; and to the Company's
knowledge, no such actions, suits or proceedings are threatened or,
contemplated by governmental authorities or threatened by others.
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(s) Ernst & Young LLP, who have certified the audited
financial statements of the Company and its subsidiaries incorporated
by reference in each Registration Statement and the Prospectus are
independent public accountants as required by the Act and the Rules and
Regulations.
(t) The financial statements incorporated by reference in each
Registration Statement and the Prospectus present fairly in all
material respects the financial position of the Company and its
consolidated subsidiaries as of the dates shown and their consolidated
results of operations and changes in consolidated cash flows, for the
periods shown, and, except as otherwise disclosed in the Prospectus,
such financial statements have been prepared in conformity with the
generally accepted accounting principles in the United States applied
on a consistent basis.
(u) Except as disclosed in the Prospectus, since February 2,
2002, there has been no material adverse change, nor any development or
event involving a prospective material adverse change in the financial
condition, business, properties or results of operations of the Company
and its subsidiaries taken as a whole, and, except as disclosed in or
contemplated by the Prospectus, since February 2, 2002, there has been
no dividend or distribution of any kind declared, paid or made by the
Company on any class of its capital stock.
(v) The Company is not and, after giving effect to the
offering and sale of the Units and the application of the proceeds
thereof as described in the Prospectus, will not be an "investment
company" as defined in the Investment Company Act of 1940.
(w) The Company and its Significant Subsidiaries have filed
all federal, state, local and foreign tax returns that have been
required to be filed or has duly requested extensions thereof, except
to the extent that any failure to file or request for extension, or any
incorrectness, would not, individually or in the aggregate, have a
Material Adverse Effect. The Company and its Significant Subsidiaries
have paid all taxes shown as due on such filed tax returns (including
any related assessments), except to the extent that any such taxes or
assessments are being contested in good faith and by appropriate
proceedings, or to the extent that any failure to pay would not,
individually or in the aggregate, have a Material Adverse Effect.
(x) The Registration Statement has become effective under the
1933 Act and no stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereto has been
issued and no proceeding for that purpose has been instituted or is
pending or, to the knowledge of the Company, is contemplated by the
Commission, and any request by the Commission for additional
information has been complied with. In addition, the Indenture has been
duly qualified under the 1939 Act.
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(y) The Purchase Agreement has been duly authorized by the
Company and, when duly executed and delivered by the Company, assuming
due authorization, execution and delivery thereof by the Purchase
Contract Agent, it will constitute a valid and legally binding
agreement of the Company enforceable in accordance with its terms,
subject to (i) the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating
to or affecting creditors' rights generally, (ii) general equitable
principles (whether considered in a proceeding in equity or law) and
(iii) an implied covenant of good faith and faith dealing.
(z) The Units initially consisting of a Purchase Contract and
a Senior Note have been duly authorized by the Company and when duly
executed and delivered by the Company, assuming due authorization and
due execution and delivery thereof by the Purchase Contract Agent as
attorney-in-fact for the holder thereof and due authentication thereof
by the Purchase Contract Agent and upon payment therefore as set forth
herein.will constitute the valid and binding obligations of the
Company, enforceable in accordance with their terms subject, as to the
enforcement of remedies to applicable bankruptcy, reorganization,
insolvency, moratorium, or other laws affecting creditors' rights
generally from time to time in effect and to general principles of
equity, and will conform in all material respects to the description
thereof in the Prospectus. The Units, when, issued, have been
authorized for listing on the New York Stock Exchange, subject to
official notice of issuance; and the issuance of the Units will not be
subject to preemptive or other similar rights.
(aa) The Shares to be issued and sold by the Company pursuant
to the Purchase Contract Agreement have been duly authorized for
issuance by the Company and, when issued and delivered in accordance
with the provisions of the Purchase Contract Agreement, will be validly
issued and fully paid and non-assessable; and the issuance of the
Shares is not and will not be subject to preemptive or other similar
rights.
(bb) The Indenture and Supplemental Indenture have been duly
authorized by the Company and, upon execution and delivery by the
Company, when duly executed and delivered by the Company, assuming due
authorization, execution and delivery thereof by the Trustee, it will
constitute a valid and legally binding agreement of the Company
enforceable in accordance with its terms, subject to (i) the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors'
rights generally, (ii) general equitable principles (whether considered
in a proceeding in equity or law) and (iii) an implied covenant of good
faith and faith dealing.
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(cc) The issuance of the Senior Notes has been duly authorized
by the Company, and, when the Senior Notes are duly executed and
delivered by the Company against payment of the agreed upon
consideration therefor, assuming due authentication thereof by the
Trustee, they will constitute valid and legally binding obligations of
the Company, entitled to the benefits of the Indenture and enforceable
against the Company in accordance with their terms.
(dd) Each of the Purchase Contract Agreement and the Pledge
Agreement has been duly authorized by the Company and when executed and
delivered by the Company will constitute the valid and binding
obligation of the Company enforceable in accordance with its terms,
subject, as to the enforcement of remedies to applicable bankruptcy,
reorganization, insolvency, moratorium, or other laws affecting
creditors' rights generally from time to time in effect and to general
principles of equity, and will conform in all material respects to the
descriptions thereof in the Prospectus.
3. Purchase, Sale and Delivery of Firm Units, Option Units. On
the basis of the representations and warranties herein contained and subject to
the terms and conditions set forth herein, the Company hereby agrees to sell to
each of the undersigned Underwriters, severally and not jointly, and each
Underwriter, severally and not jointly, agrees to purchase at the public
offering price the number of Firm Units set forth opposite the name of such
Underwriter in Schedule A, plus any additional number of Firm Units which such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 8 hereof, subject in each case to such adjustments by CSFBC and SSB in
their sole discretion shall make to eliminate any sales or purchases of
fractional securities.
The Company will deliver the Firm Units to the Representatives
for the accounts of the Underwriters, against payment of the purchase price in
Federal (same day) funds by wire transfer to an account at a bank reasonably
acceptable to Credit Suisse First Boston Corporation ("CSFBC") and Xxxxxxx Xxxxx
Xxxxxx Inc. ("SSB") drawn to the order of the Company at the office of Shearman
& Sterling, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, X.X. 00000, at 9:00 A.M., New York
City time, on May _, 2002, or at such other time not later than seven full
business days thereafter as CSFBC and the Company determine, such time being
herein referred to as the "First Closing Date." For purposes of Rule 15c6-1
under the Securities Exchange Act of 1934, the First Closing Date (if later than
the otherwise applicable settlement date) shall be the settlement date for
payment of funds and delivery of securities for all the Units sold pursuant to
the offering. The certificates for the Firm Units so to be delivered will be in
definitive form, in such denominations and registered in such names as CSFBC and
SSB request and will be made available for checking and packaging at the above
office of Shearman & Sterling at least 24 hours prior to the First Closing Date.
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In addition, upon written notice from CSFBC and SSB given to
the Company from time to time not more than 13 calendar days subsequent to the
First Closing Date, the Underwriters may purchase all or less than all of the
Option Units at the purchase price per Security to be paid for the Firm Units.
The Company agrees to sell to the Underwriters the number of shares of Option
Units specified in such notice and the Underwriters agree, severally and not
jointly, to purchase such Option Units. Such Option Units shall be purchased for
the account of each Underwriter in the same proportion as number of shares of
Firm Units set forth opposite such Underwriter's name bears to the total number
of shares of Firm Units (subject to adjustment by CSFBC and SSB to eliminate
fractions) and may be purchased by the Underwriters only for the purpose of
covering over-allotments made in connection with the sale of the Firm Units. No
Option Units shall be sold or delivered unless the Firm Units previously have
been, or simultaneously are, sold and delivered. The right to purchase the
Option Units or any portion thereof may be exercised from time to time and to
the extent not previously exercised may be surrendered and terminated at any
time upon notice by CSFBC and SSB to the Company.
Each time for the delivery of and payment for the Option
Units, being herein referred to as an "Optional Closing Date," which may be the
First Closing Date (the First Closing Date and each Optional Closing Date, if
any, being sometimes referred to as a "Closing Date"), shall be determined by
CSFBC and SSB but shall be not later than five full business days after written
notice of election to purchase Option Units is given. The Company will deliver
the Option Units being purchased on each Optional Closing Date to the
Representatives for the accounts of the several Underwriters, against payment of
the purchase price therefor in Federal (same day) funds by wire transfer to an
account at a bank reasonably acceptable to CSFBC and SSB drawn to the order of
the Company, at the above office of Shearman & Sterling. The certificates for
the Option Units being purchased on each Optional Closing Date will be in
definitive form, in such denominations and registered in such names as CSFBC and
SSB request upon reasonable notice prior to such Optional Closing Date and will
be made available for checking and packaging at the above office of Shearman &
Sterling at a reasonable time in advance of such Optional Closing Date.
4. Offering by Underwriters. It is understood that
the several Underwriters propose to offer the Units for sale to the
public as set forth in the Prospectus.
5. Certain Agreements of the Company. The Company
agrees with the several Underwriters that:
(a) If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement, the
Company will file the Prospectus with the Commission pursuant to and in
accordance with the applicable subparagraph (as consented to by CSFBC
and SSB, which such consent shall not be unreasonably withheld) of Rule
424(b) not later than the second business day following the execution
and delivery of this Agreement). The Company will advise CSFBC and SSB
promptly of any such filing pursuant to Rule 424(b). If the Effective
Time of the Initial Registration Statement is prior to the execution
and delivery of this Agreement and an additional registration statement
is necessary to register a portion of the Units under the Act but the
Effective Time thereof has not occurred as of such execution and
delivery, the Company will file the additional registration statement
or, if filed, will file a post-effective amendment thereto with the
Commission pursuant to and in accordance with Rule 462(b) on or prior
to 10:00 P.M., New York City time, on the date of this Agreement or, if
earlier, on or prior to the time the Prospectus is printed and
distributed to any Underwriter, or will make such filing at such later
date as shall have been consented to by CSFBC and SSB.
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(b) The Company will advise CSFBC and SSB promptly of any
proposal to amend or supplement the initial or any additional
registration statement as filed or the related prospectus or the
Initial Registration Statement, the Additional Registration Statement
(if any) or the Prospectus and will not effect such amendment or
supplementation without CSFBC's and SSB's consent, which such consent
shall not be unreasonably withheld; and the Company will also advise
CSFBC and SSB promptly of the effectiveness of each Registration
Statement (if its Effective Time is subsequent to the execution and
delivery of this Agreement) and of any amendment or supplementation of
a Registration Statement or the Prospectus and of the institution by
the Commission of any stop order proceedings in respect of a
Registration Statement and will use its reasonable best efforts to
prevent the issuance of any such stop order and to obtain as soon as
possible its lifting, if issued.
(c) If, at any time when a prospectus (not in excess of 12
months from the date hereof) relating to the Units is required to be
delivered under the Act, any event occurs as a result of which the
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 it is necessary at any time when a
prospectus (not in excess of 12 months from the date hereof) relating
to the Units is required to be delivered under the Act in connection
with sales by any Underwriter to amend the Prospectus to comply with
the Act, the Company will promptly notify CSFBC and SSB of any such
event, and will promptly prepare and file with the Commission, at its
own expense, an amendment or supplement that will correct such
misstatement or omission or an amendment which will effect such
compliance. Neither CSFBC's and SSB's consent to, nor the Underwriters'
delivery of, any such amendment or supplement shall constitute a waiver
of any condition set forth in Section 6.
12
(d) As soon as practicable, but not later than the
Availability Date (as defined below), the Company will make generally
available to its securityholders an earnings statement covering a
period of at least 12 months beginning after the Effective Date of the
Initial Registration Statement (or, if later, the Effective Date of the
Additional Registration Statement) which will satisfy the provisions of
Section 11(a) of the Act (including, at the option of the Company, Rule
158 under the Act). For the purpose of the preceding sentence,
"Availability Date" means the 45th day after the end of the fourth
fiscal quarter following the fiscal quarter that includes such
Effective Date, except that, if such fourth fiscal quarter is the last
quarter of the Company's fiscal year, "Availability Date" means the
90th day after the end of such fourth fiscal quarter.
(e) The Company will furnish to the Representatives copies of
each Registration Statement (three of which will include all exhibits),
each related preliminary prospectus, and, so long as a prospectus
relating to the Units is required to be delivered under the Act in
connection with sales by any Underwriter or dealer, the Prospectus and
all amendments and supplements to such documents, in each case in such
quantities as CSFBC and SSB reasonably request. The Prospectus shall be
so furnished on or prior to 3:00 P.M., New York City time, on the
business day following the later of the execution and delivery of this
Agreement or the Effective Time of the Initial Registration Statement.
All other documents shall be so furnished as soon as available. The
Company will pay the expenses of printing and distributing to the
Underwriters all such documents.
(f) The Company will use its reasonable best efforts to
arrange for the qualification of the Units for sale under the laws of
such jurisdictions as CSFBC and SSB reasonably designate and will
continue such qualifications in effect so long as required for the
distribution, of the Units, provided that the Company and its
subsidiaries shall not be obligated to qualify as foreign corporations
in any jurisdiction in which they are not so qualified or to file a
general consent to service of process in any jurisdiction.
(g) During the period of three years hereafter, the Company
will furnish to the Representatives and, upon request, to each of the
other Underwriters, as soon as practicable after the end of each fiscal
year, a copy of its annual report to stockholders for such year; and
the Company will furnish to the Representatives as soon as available, a
copy of each report and any definitive proxy statement of the Company
filed with the Commission under the Exchange Act or mailed to
stockholders, provided, however, that this Section 5(g) shall not apply
to the extent that any such report or other document is available
through the Commission's XXXXX system.
(h) The Company will pay all expenses incident to the
performance of its obligations under this Agreement, for any filing
fees and other expenses (including reasonable fees and disbursements of
counsel) incurred in connection with qualification of the Offered
Securities for sale under the laws of such jurisdictions as CSFBC and
SSB reasonably designate and the printing of memoranda relating
thereto, for the filing fee incident to the review by the National
Association of Securities Dealers, Inc. of the Offered Securities, for
any travel expenses of the Company's officers and employees and any
other expenses of the Company in connection with attending or hosting
meetings with prospective purchasers of the Offered Securities and for
expenses incurred in distributing preliminary prospectuses and the
Prospectus (including any amendments and supplements thereto) to the
Underwriters.
13
(i) For a period of 90 days after the date of this Agreement,
the Company will not offer, sell, contract to sell, pledge or otherwise
dispose of, directly or indirectly, or file with the Commission a
registration statement under the Act relating to, any additional shares
of its Common Stock or securities convertible into or exchangeable or
exercisable for any shares of its Common Stock, or publicly disclose
its intention to make any such offer, sale, pledge, disposition or
filing, without the prior written consent of CSFBC and SSB, except for
(A) issuances of Common Stock pursuant to the conversion or exchange of
convertible or exchangeable securities or the exercise of warrants or
options, in each case outstanding on the date hereof, (B) grants of
employee or non-employee director stock options pursuant to the terms
of a plan in effect on the date hereof, (C) issuances of Common Stock
pursuant to the exercise of such options or the exercise of any other
employee or non-employee director stock options outstanding on the date
hereof or issuances of Common Stock pursuant to the Company's dividend
reinvestment plan, (D) transfers of Common Stock to charitable
organizations, provided the transferee(s) agree(s) to be bound by the
terms of this provision, (E) any Common Stock purchase rights issued
under the Company's stockholder rights plan, (F) the filing of any
registration statements in connection with the registration and sale of
shares of Common Stock pursuant to employee and non-employee director
benefit plans, (G) the sale of the Company's equity security units to
the Underwriters in the concurrent offering and sale of such securities
and, in connection therewith, any issuance and sale of Common Stock and
the creation of stripped units or normal units (as each of such terms
are used in the prospectus relating to such equity security units)
which may be created or recreated as described in such prospectus, (H)
any registration statement filed with the Commission relating to such
equity security units pursuant to Rule 462(b) under the Act, (I)
issuances of Common Stock to directors of the Company in lieu of fees
and (J) any offering or sale of Common Stock by the Company in
connection with the vesting of restricted stock awards granted to
employees, and the filing of any registration statements in connection
therewith.
6. Conditions of the Obligations of the Underwriters.
The obligations of the several Underwriters to purchase and pay for the Units on
the First Closing Date and the Option Units to be purchased on each Optional
Closing Date shall be subject to the accuracy of the representations and
warranties on the part of the Company herein, as of the date hereof and as of
the Closing Date, to the accuracy of the statements of Company officers made in
any certificates pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder and to the following additional conditions:
14
(a) The Representatives shall have received a letter, dated
the date of delivery thereof (which, if the Effective Time of the
Initial Registration Statement is prior to the execution and delivery
of this Agreement, shall be on or prior to the date of this Agreement
or, if the Effective Time of the Initial Registration Statement is
subsequent to the execution and delivery of this Agreement, shall be
prior to the filing of the amendment or post-effective amendment to the
registration statement to be filed shortly prior to such Effective
Time), of Ernst & Young, LLP confirming that they are independent
public accountants within the meaning of the Act and the applicable
published Rules and Regulations thereunder and stating substantially to
the effect that:
(i) in their opinion the financial statements and
schedules examined by them and included or incorporated by
reference in the Registration Statements comply as to form in
all material respects with the applicable accounting
requirements of the Act and the related published Rules and
Regulations;
(ii) have performed the procedures specified by the
American Institute of Certified Public Accountants for a
review of interim financial information as described in
Statement of Auditing Standards No. 71, Interim Financial
Information, on the unaudited financial statements included in
the Registration Statements;
(iii) on the basis of the review referred to in
clause (ii) above, a reading of the latest available interim
financial statements of the Company, inquiries of officials of
the Company who have responsibility for financial and
accounting matters and other specified procedures, nothing
came to their attention that caused them to believe that:
(A) the unaudited financial statements and
summary of earnings included in the
Registration Statements do not comply as to
form in all material respects with the
applicable accounting requirements of the
Act and the related published Rules and
Regulations or any material modifications
should be made to such unaudited financial
statements for them to be in conformity with
generally accepted accounting principles;
15
(B) at the date of the latest available balance
sheet read by such accountants, or at a
subsequent specified date not more than
three business days prior to the date of
this Agreement, there was any change in the
capital stock or any increase in short-term
indebtedness or long-term debt of the
Company and its consolidated subsidiaries
or, at the date of the latest available
balance sheet read by such accountants,
there was any decrease in consolidated net
current assets or net assets, as compared
with amounts shown on the latest balance
sheet included in the Prospectus; or
(C) for the period from the closing date of the
latest income statement included in the
Prospectus to the closing date of the latest
available income statement read by such
accountants there were any decreases, as
compared with the corresponding period of
the previous year in consolidated net sales
or net operating income or consolidated net
income,
except in all cases set forth in clauses (B) and (C)
above for changes, increases or decreases which the
Prospectus discloses have occurred or may occur or
which are described in such letter; and
(iv) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other
financial information contained in the Registration Statements
(in each case to the extent that such dollar amounts,
percentages and other financial information are derived from
the general accounting records of the Company and its
subsidiaries subject to the internal controls of the Company's
accounting system or are derived directly from such records by
analysis or computation) with the results obtained from
inquiries, a reading of such general accounting records and
other procedures specified in such letter and have found such
dollar amounts, percentages and other financial information to
be in agreement with such results, except as otherwise
specified in such letter.
For purposes of this subsection, (i) if the Effective Time of the Initial
Registration Statement is subsequent to the execution and delivery of this
Agreement, "Registration Statements" shall mean the initial registration
statement as proposed to be amended by the amendment or post-effective amendment
to be filed shortly prior to its Effective Time, (ii) if the Effective Time of
the Initial Registration Statement is prior to the execution and delivery of
this Agreement but the Effective Time of the Additional Registration is
subsequent to such execution and delivery, "Registration Statements" shall mean
the Initial Registration Statement and the additional registration statement as
proposed to be filed or as proposed to be amended by the post-effective
amendment to be filed shortly prior to its Effective Time, and (iii)
"Prospectus" shall mean the prospectus included in the Registration Statements.
All financial statements and schedules included in material incorporated by
reference into the Prospectus shall be deemed included in the Registration
Statements for purposes of this subsection.
16
(b) If the Effective Time of the Initial Registration
Statement is not prior to the execution and delivery of this Agreement,
such Effective Time shall have occurred not later than 10:00 P.M., New
York City time, on the date of this Agreement or such later date as
shall have been consented to by CSFBC and SSB, which consent shall not
be unreasonably withheld. If the Effective Time of the Additional
Registration Statement (if any) is not prior to the execution and
delivery of this Agreement, such Effective Time shall have occurred not
later than 10:00 P.M., New York City time, on the date of this
Agreement or, if earlier, the time the Prospectus is printed and
distributed to any Underwriter, or shall have occurred at such later
date as shall have been consented to by CSFBC and SSB, which consent
shall not be unreasonably withheld. If the Effective Time of the
Initial Registration Statement is prior to the execution and delivery
of this Agreement, the Prospectus shall have been filed with the
Commission in accordance with the 1933 Act Regulations and Section 5(a)
of this Agreement. Prior to such Closing Date, no stop order suspending
the effectiveness of a Registration Statement shall have been issued
and no proceedings for that purpose shall have been instituted or, to
the knowledge of the Company or the Representatives, shall be
contemplated by the Commission.
(c) Subsequent to the execution and delivery of this
Agreement, there shall not have occurred (i) any change, or any
development or event involving a prospective change, in the financial
condition, business, prospects, properties, or results of operations of
the Company and its Significant Subsidiaries taken as a whole which, in
the judgment of a majority in interest of the Underwriters including
the Representatives, is material and adverse and makes it impractical
or inadvisable to proceed with completion of the public offering or the
sale of and payment for the Units; (ii) any downgrading in the rating
of any debt securities of the Company by Xxxxx'x Investors Services,
Inc. or Standard and Poor's Ratings Services, a Division of the McGraw
Hill Companies, Inc.; (iii) any material and adverse change in U.S. or
international financial, political or economic conditions as would, in
the judgment of a majority in interest of the Underwriters including
the Representatives, be likely to prejudice materially the success of
the proposed issue, sale or distribution of the Units, whether in the
primary market or in respect of dealings in the secondary market; (iv)
any material suspension or material limitation of trading in securities
generally on the New York Stock Exchange, or any setting of minimum
prices for trading on such exchange, or any suspension of trading of
any securities of the Company on any exchange or in the
over-the-counter market; (v) any banking moratorium declared by U.S.
Federal or New York authorities; (vi) any major disruption of
settlements of securities or clearance services in the United States or
(vii) any attack on, outbreak or escalation of hostilities or material
act of terrorism involving the United States, any declaration of war by
Congress or any other national or international calamity or emergency
if, in the judgment of a majority in interest of the Underwriters
including the Representatives, the effect of any such attack, outbreak,
escalation, act, declaration, calamity or emergency makes it
impractical or inadvisable to proceed with completion of the public
offering or the sale of and payment for the Units.
17
(d) At the Closing Date, the Representatives shall have
received an opinion, dated such Closing Date of Xxxxxxx Xxxxxxxx &
Xxxxxxxx, counsel for the Company, dated as of the Closing Date,
substantially to the effect that:
(i) this Agreement has been duly authorized, executed
and delivered by the Company;
(ii) each of the Purchase Contract Agreement and the
Pledge Agreement has been duly authorized, executed and
delivered by the Company and (assuming due authorization,
execution and delivery thereof by the other parties thereto)
constitutes a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms,
subject, as to the enforcement of remedies to applicable
bankruptcy, reorganization, insolvency, moratorium, or other
laws affecting creditors' rights generally from time to time
in effect and to general principles of equity;
(iii) the Indenture and Supplemental Indenture have
been duly authorized, executed and delivered by the Company
and assuming due authorization, execution and delivery thereof
by the Trustee, constitute valid and binding agreements of the
Company enforceable against the Company in accordance with
their terms subject, as to the enforcement of remedies to
applicable bankruptcy, reorganization, insolvency, moratorium,
or other laws affecting creditors' rights generally from time
to time in effect and to general principles of equity;
(iv) the Units to be purchased by the Underwriters
have been duly authorized by the Company and, when issued and
authenticated in accordance with the provisions of the
Purchase Contract Agreement and delivered to and paid for by
the Underwriters in accordance with the terms of the Purchase
Agreement, will constitute valid and binding obligations of
the Company, enforceable against the Company in accordance
with their terms, subject, as to the enforcement of remedies
to applicable bankruptcy, reorganization, insolvency,
moratorium, or other laws affecting creditors' rights
generally from time to time in effect and to general
principles of equity;
18
(v) the Senior Notes have been duly authorized by the
Company and, when issued and authenticated in accordance with
the terms of the Indenture and delivered to the Trustee
against payment therefor in accordance with the terms of the
Underwriting Agreement dated the date hereof among the
Trustee, the Company and the Underwriters, will be entitled to
the benefits of the Indenture and constitute valid and binding
obligations of the Company, enforceable against the Company in
accordance with their terms subject, as to the enforcement of
remedies to applicable bankruptcy, reorganization, insolvency,
moratorium, or other laws affecting creditors' rights
generally from time to time in effect and to general
principles of equity;
(vi) the Shares to be issued and sold by the Company
pursuant to the settlement of the Purchase Contracts without
regard to the anti-dilution provisions of the Purchase
Contract Agreement, have been duly authorized and reserved for
issuance by the Company and, when issued by the Company in
accordance with the provisions of the Purchase Contract
Agreement and the Purchase Contracts, will be validly issued,
fully paid and non-assessable; and the holders of outstanding
shares of capital stock of the Company are not entitled to
preemptive or other rights to subscribe for the Units pursuant
to the Company's Restated Certificate of Incorporation or the
General Corporation Law of the State of Delaware;
(vii) the Indenture and Supplemental Indenture has
been qualified under the 1939 Act;
(viii) we have reviewed the discussion set forth
under the captions "U.S. Federal Income Tax Consequences,"
"Description of the Equity Security Units," "Description of
the Senior Notes," and "Description of Common Stock" in the
Prospectus and are of the opinion that to the extent the
discussion relates to conclusions of law, the discussion is
accurate in all material respects;
(ix) the Company is not and, after giving effect to
the offering and sale of the Units and the application of the
proceeds thereof as described in the Prospectus, and will not
be, required to register as an "investment company," as such
term is defined in the Investment Company Act of 1940, as
amended; and
(x) no consent, approval, authorization, filing with
or order of any court or governmental agency or body is
required to be made or obtained by the Company pursuant to the
General Corporation Law of the State of Delaware or the laws,
rules or regulations of the State of New York or of the United
States of America in connection with the performance of their
obligations hereunder or under the other Transaction
Agreements, except such as have been made or obtained under
the Act, the Exchange Act, the 1939 Act or otherwise and such
as may be required under the blue sky laws of any jurisdiction
in connection with the purchase and distribution of the Units
by the Underwriters (about which such counsel need express no
opinion) and such other approvals (specified in such opinion)
as have been obtained.
19
Such opinion shall also include a statement substantially to
the effect that: Such counsel has not independently verified the
accuracy, completeness or fairness of the statements made or included
in the Registration Statement, the Prospectus or the Exchange Act
documents incorporated by reference therein and takes no responsibility
therefor, except as and to the extent set forth in paragraph (viii)
above; in the course of the preparation by the Company of the
Registration Statement and the Prospectus (excluding the Exchange Act
documents incorporated by reference therein), such counsel participated
in conferences with certain officers and employees of the Company, with
representatives of Ernst & Young LLP and with counsel to the company,
such counsel did not participate in the preparation of the Exchange Act
documents incorporated by reference in the Registration Statement and
the Prospectus except that such counsel had an opportunity to review
the Company's Annual Report on Form 10-K for the fiscal year ended
February 2, 2002, prior to its filing with the Commission, based upon
such counsel's examination of the Registration Statement, the
Prospectus and the Exchange Act documents incorporated by reference
therein, such counsel's investigations made in connection with the
preparation of the Registration Statement and the Prospectus (excluding
the Exchange Act documents incorporated by reference therein) and such
counsel's participation in the conferences referred to above, (i) such
counsel is of the opinion that the Registration Statement, as of its
effective date and as of such Closing, and the Prospectus, as of its
date, complied as to the form in all material respects with the
requirements of the Act and the applicable rules and regulations of the
Commission thereunder and that the Exchange Act documents incorporated
by reference in the Registration Statement and the Prospectus complied
as to form when filed in all material respects with the requirements of
the Exchange Act and the applicable rules and regulations of the
Commission thereunder, except that in each case such counsel shall
express no opinion with respect to the financial statements or other
financial data contained or incorporated by reference in the
Registration Statement, the Prospectus or the Exchange Act documents
incorporated by reference therein, and (ii) such counsel has no reason
to believe that the Registration Statement, as of its effective date
(including the Exchange Act documents incorporated by reference therein
on file with the Commission on such effective date), contained any
untrue statement of a material fact or omitted to state any material
fact required to be stated therein or necessary in order to make the
statements therein not misleading or that the Prospectus or any
amendment or supplement thereto, as of its date or as of such Closing
Date (including the Exchange Act documents incorporated by reference
therein) contains any untrue statement of a material fact or omits to
state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading, or any amendment or supplement thereto, as of its date
or as of such Closing Date except that in each case such counsel shall
express no belief with respect to the financial statements or other
financial data contained or incorporated by reference in the
Registration Statement, the Prospectus, Form T-1 or the Exchange Act
documents incorporated therein.
20
Such opinion shall be limited in all respects to matters
governed by the laws of the State of New York, the Delaware General
Corporation Law and the Federal laws of the United States of America.
Such counsel may rely as to certain matters of fact, to the extent they
deem proper, on certificates of officers of the Company and public
officials.
(e) At the Closing Date, the Underwriters shall have received
an opinion of Xxxxxxxxxxx X. Xxx, Esq., Executive Vice President -
Operations General Counsel of the Company, dated as of the Closing
Date, substantially to the effect that:
(i) to such counsel's knowledge, the Company is duly
qualified to do business as a foreign corporation in good
standing in all jurisdictions in which the ownership or lease
of property or the conduct of its business requires such
qualification, except where the failure to be so qualified
would, individually or in the aggregate, not reasonably be
expected to have a Material Adverse Effect;
(ii) all outstanding shares of the Shares of the
Company have been duly authorized and validly issued and are
fully paid and nonassessable;
(iii) to such counsel's knowledge, there are no
contracts or agreements between the Company and any person
granting such person the right (other than rights which have
been waived or satisfied) to require the Company to include
any securities of the Company owned or to be owned by such
person in the securities registered pursuant to the
Registration Statement;
(iv) to the knowledge of such counsel, there is no
pending or threatened action, suite or proceeding by or before
any court or governmental agency, authority or body or any
arbitrator involving the Company or any of its subsidiaries or
its or their property of a character required to be disclosed
in the Registration Statement or the Prospectus which is not
adequately described as required, and there is no franchise,
contract or other document of a character required to be
described in the Registration Statement or Prospectus, or to
be filed as an exhibit thereto, which is not described or
filed as required;
21
(f) At the Closing Date, the Underwriters shall have received
the opinion, dated as of the Closing Date, of Xxxxx, Xxxxxx & Xxxxxx,
counsel to The Bank of New York, as Purchase Contract Agent in form
and substance satisfactory to counsel for the Underwriters, to the
effect that:
(i) the Bank of New York is a New York banking
corporation duly organized, validly existing and in good
standing under the laws of the New York with all necessary
corporate power and authority to execute and deliver, and to
carry out and perform its obligations under the terms of, the
Purchase Contract Agreement, the Pledge Agreement;
(ii) the execution, delivery and performance by the
Purchase Contract Agent of the Purchase Contract Agreement,
and the Pledge Agreement, and the authentication and delivery
of the Units have been duly authorized by all necessary action
on the part of the Purchase Contract Agent. The Purchase
Contract Agreement, the Pledge Agreement and the Indenture
have been duly executed and delivered by the Purchase Contract
Agent, and constitute the legal, valid and binding obligations
of the Purchase Contract Agent, enforceable against the
Purchase Contract Agent in accordance with their respective
terms, except as (A) the enforceability thereof may be limited
by bankruptcy, insolvency or similar laws affecting the
enforcement of creditors' rights generally and (B) rights of
acceleration and the availability of equitable remedies may be
limited by equitable principles of general applicability;
(iii) the execution, delivery and performance by The
Bank of New York, in its capacity as Purchase Contract Agent
of the Purchase Contract Agreement, the and Pledge Agreement,
do not conflict with, or constitute a breach of, The Bank of
New York's charter or by-laws; and
(iv) no consent, approval or authorization of, or
registration with or notice to, any federal banking authority
is required for the execution, delivery or performance by The
Bank of New York, in its capacity as Purchase Contract Agent,
of the Purchase Contract Agreement and the Pledge Agreement.
(g) An opinion of Shearman & Sterling, counsel for the
Underwriters, dated as of the Closing Date, containing such opinion or
opinions, dated as of the Closing Date, with respect to the issuance
and sale of the Units, the Registration Statement, the Prospectus
(together with any supplement thereto), the Transaction Agreements and
other related matters as the Underwriters may reasonably require, and
the Company shall have furnished to such counsel such documents as they
reasonably request for the purpose of enabling them to pass upon such
matters.
22
(h) The Representatives shall have received a certificate,
dated such Closing Date, of the President or any Vice President and a
principal financial or accounting officer of the Company in which such
officers, to the best of their knowledge after reasonable
investigation, shall state that: the representations and warranties of
the Company in this Agreement are true and correct; the Company has
complied with all agreements and satisfied all conditions on its part
to be performed or satisfied hereunder at or prior to such Closing
Date; no stop order suspending the effectiveness of any Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are contemplated by the Commission; the Additional
Registration Statement (if any) satisfying the requirements of
subparagraphs (1) and (3) of Rule 462(b) was filed pursuant to Rule
462(b), including payment of the applicable filing fee in accordance
with Rule 111(a) or (b) under the Exchange Act, prior to the time the
Prospectus was printed and distributed to any Underwriter; and,
subsequent to February 2, 2002 (the date of the most recent audited
financial statements incorporated by reference in the Prospectus),
there has been no material adverse change, nor any development or event
involving a prospective material adverse change, in the financial
condition, business, properties, or results of operations of the
Company and its subsidiaries taken as a whole except as set forth in or
contemplated by the Prospectus or as described in such certificate.
(i) At the date of the Closing Date, the Units and the Shares
shall have been approved for listing, subject to official notice of
issuance and evidence of satisfactory distribution, on the New York
Stock Exchange, and satisfactory evidence of such actions shall have
been provided to the Underwriters.
(j) The Representatives shall have received a letter, dated
such Closing Date, of Ernst & Young, LLP which meets the requirements
of subsection (a) of this Section 6, except that the specified date
referred to in such subsection will be a date not more than three days
prior to such Closing Date for the purposes of this subsection.
(k) 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, this Agreement and all obligations of the
Underwriters hereunder may be canceled at, or at any time prior to, the
Closing Date by the Underwriters. Notice of such cancellation shall be
given to the Company in writing or by telephone or facsimile confirmed
in writing.
(l) On or prior to the date of this Agreement, the
Representatives shall have received lock-up letters from each of the
executive officers and directors of the Company set forth on Schedule C
hereto.
23
7. Indemnification and Contribution. (a) The Company will indemnify and
hold harmless each Underwriter, its partners, directors and officers and each
person, if any, who controls such Underwriter within the meaning of Section 15
of the 1933 Act, against any losses, claims, damages or liabilities, joint or
several, to which such 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 any untrue statement or alleged
untrue statement of any material fact contained in any Registration Statement,
the Prospectus, or any amendment or supplement thereto, or any related
preliminary prospectus, 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
each Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred; subject to subsection
(C) of this Section 7, (it being understood, however, that the Company shall, in
connection with any one such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
only one separate firm of attorneys (in addition to any local counsel) at any
time for all such Underwriters, directors, partners, officers and controlling
persons, which firm shall be designated in writing by CSFBC and SSB); provided,
however, that the Company will 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 in or omission or alleged omission
from any of such documents in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through the
Representatives specifically for use therein, it being understood and agreed
that the only such information furnished by any Underwriter consists of the
information described as such in subsection (b) below; provided further, that
with respect to any untrue or alleged untrue statement or omission or alleged
omission of material fact made in any Preliminary Prospectus, the indemnity
agreement contained in this Section 7(a) shall not inure to the benefit of any
Underwriter (or its partners, directors, officers or controlling persons) from
whom the person asserting any such loss, claim, damage or liability purchased
the securities concerned, to the extent that any such loss, claim, damage or
liability of such Underwriter (for its partners, directors, officers or
controlling persons) occurs under the circumstance the untrue statement or
alleged untrue statement or omission or alleged omission of a material fact
contained in the Preliminary Prospectus was corrected in the Prospectus and
there was not sent or given to such person, at or prior to the written
confirmation of the sale of such securities to such person, a copy of the
Prospectus.
24
(b) Each Underwriter will severally and not jointly indemnify
and hold harmless the Company, its directors and officers and each person, if
any who controls the Company within the meaning of Section 15 of the 1933 Act or
Section 20 of the Exchange Act, 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 any untrue statement or alleged
untrue statement of any material fact contained in any Registration Statement,
the Prospectus, or any amendment or supplement thereto, or any related
preliminary prospectus, or arise out of or are based upon the omission or the
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 reliance upon and in
conformity with written information furnished to the Company by such Underwriter
through the Representatives specifically for use therein, and will reimburse any
legal or other expenses reasonably incurred by the Company in connection with
investigating or defending any such loss, claim, damage, liability or action as
such expenses are incurred, it being understood and agreed that the only such
information furnished by any Underwriter consists of the following information
in the Prospectus furnished on behalf of each Underwriter: the concession and
reallowance figures appearing in the fourth paragraph under the caption
"Underwriting," the information contained in the tenth, eleventh, thirteenth,
fourteenth, fifteenth and sixteenth paragraphs under the caption "Underwriting"
and the penultimate paragraph on the cover page.
(c) Promptly after receipt by an indemnified party under this
Section 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 subsection (a) or (b) above, notify the indemnifying party of the
commencement thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than under subsection (a) or (b) above. In case any such action is
brought against any indemnified party and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it may wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel reasonably
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 will not be liable to such
indemnified party under this Section 9 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation. No indemnifying party
shall, without the prior written consent of the indemnified party (which consent
shall not be unreasonably withheld), effect any settlement of any pending or
threatened action in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party unless such settlement (i) includes an unconditional release of such
indemnified party from all liability on any claims that are the subject matter
of such action and (ii) does not include a statement as to, or an admission of,
fault, culpability or a failure to act by or on behalf of an indemnified party.
No indemnifying party shall be liable for any settlement of any such action
effected without the indemnifying party's written consent (which consent shall
not be unreasonably withheld), unless (i) such settlement is entered into more
than 30 days after receipt by the indemnifying party of written notice of the
proposed settlement, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 20 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
25
(d) If the indemnification provided for in this Section 9 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Company on the one hand and the Underwriters on the other from the offering
of the Securities or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriters on the other shall be deemed to be in the same proportion
as the total net proceeds from the offering (before deducting expenses) received
by the Company bear to the total underwriting discounts and commissions received
by the Underwriters. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The amount paid by an indemnified
party as a result of the losses, claims, damages or liabilities referred to in
the first sentence of 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 action or claim which is the subject of this
subsection (d). Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations in
this subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) The obligations of the Company under this Section 9 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
any Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section shall be in addition to any liability which the
respective Underwriters may otherwise have and shall extend, upon the same terms
and conditions, to each director of the Company, to each officer of the Company
who has signed a Registration Statement and to each person, if any, who controls
the Company within the meaning of the Act or the Exchange Act.
26
8. Default of Underwriters. If any Underwriter or Underwriters
default in their obligations to purchase Units hereunder on either the First or
any Optional Closing Date and the aggregate number of shares of Units that such
defaulting Underwriter or Underwriters agreed but failed to purchase does not
exceed 10% of the total number of shares of Units that the Underwriters are
obligated to purchase on such Closing Date, CSFBC and SSB may make arrangements
satisfactory to the Company for the purchase of such Units by other persons,
including any of the Underwriters, but if no such arrangements are made by such
Closing Date, the non-defaulting Underwriters shall be obligated severally, in
proportion to their respective commitments hereunder, to purchase the Units that
such defaulting Underwriters agreed but failed to purchase on such Closing Date.
If any Underwriter or Underwriters so default and the aggregate number of shares
of Units with respect to which such default or defaults occur exceeds 10% of the
total number of shares of Units that the Underwriters are obligated to purchase
on such Closing Date and arrangements satisfactory to CSFBC and SSB and the
Company for the purchase of such Units by other persons are not made within 36
hours after such default, this Agreement will terminate without liability on the
part of any non-defaulting Underwriter or the Company, except as provided in
Section 9 (provided that if such default occurs with respect to Option Units
after the First Closing Date, this Agreement will not terminate as to the Firm
Units or any Option Units purchased prior to such termination). As used in this
Agreement, the term "Underwriter" includes any person substituted for an
Underwriter under this Section. Nothing herein will relieve a defaulting
Underwriter from liability for its default.
9. Survival of Certain Representations and Obligations. The
respective indemnities, agreements, representations, warranties and other
statements of the Company or its officers and of the several Underwriters set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation, or statement as to the results thereof,
made by or on behalf of any Underwriter, the Company or any of their respective
representatives, officers or directors or any controlling person, and will
survive delivery of and payment for the Units. If this Agreement is terminated
pursuant to Section 8 or if for any reason the purchase of the Units by the
Underwriters is not consummated, the Company shall remain responsible for the
expenses to be paid or reimbursed by it pursuant to Section 5 and the respective
obligations of the Company and the Underwriters pursuant to Section 7 shall
remain in effect, and if any Units have been purchased hereunder the
representations and warranties in Section 2 and all obligations under Section 5
shall also remain in effect. If the purchase of the Units by the Underwriters is
not consummated for any reason other than solely because of the termination of
this Agreement pursuant to Section 8 or the occurrence of any event specified in
clause (iii), (iv), (v), (vi) or (vii) of Section 6(c), the Company will
reimburse the Underwriters for all out-of-pocket expenses (including reasonable
fees and disbursements of counsel to the Underwriters) reasonably incurred by
them in connection with the offering of the Xxxxx.
00
00. Notices. All communications hereunder will be in writing
and, if sent to the Underwriters, will be mailed, delivered or telegraphed and
confirmed to the Representatives c/o Credit Suisse First Boston Corporation,
Eleven Madison Avenue, New York, N.Y. 10010-3629, Attention: Transactions
Advisory Group, and Xxxxxxx Xxxxx Xxxxxx Inc., at 000 Xxxxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx, 00000, Attention: General Counsel; or, if sent to the Company,
will be mailed, delivered or telegraphed and confirmed to it at 000 Xxxx Xxxx,
Xxxxxxx, Xxx Xxxxxx 00000, Attention: General Counsel; provided, however, that
any notice to an Underwriter pursuant to Section 7 will be mailed, delivered or
telegraphed and confirmed to such Underwriter. The Representatives shall
promptly furnish the address of any Underwriter upon the request of the Company.
11. 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 7, and no
other person will have any right or obligation hereunder.
12. Representation of Underwriters. The Representatives will
act for the several Underwriters in connection with this financing, and any
action under this Agreement taken by the Representatives jointly will be binding
upon all the Underwriters.
13. Counterparts. This Agreement may be executed 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 Agreement.
14. Applicable Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.
28
The Company hereby submits to the non-exclusive jurisdiction
of the Federal and state courts in the Borough of Manhattan in The City of New
York in any suit or proceeding arising out of or relating to this Agreement or
the transactions contemplated hereby.
If the foregoing is in accordance with the Representatives'
understanding of our agreement, kindly sign and return to the Company one of the
counterparts hereof, whereupon it will become a binding agreement between the
Company and the several Underwriters in accordance with its terms.
Very truly yours,
TOYS "R" US, INC.
By:
-------------------------
[Title]
The foregoing Underwriting Agreement is
hereby confirmed and accepted as of the date
first above written
CREDIT SUISSE FIRST BOSTON CORPORATION
XXXXXXX XXXXX XXXXXX INC.
FIRST UNION SECURITIES, INC.
BANC ONE CAPITAL MARKETS, INC.
BNY CAPITAL MARKETS, INC.
FLEET SECURITIES, INC.
MIZUHO INTERNATIONAL PLC
XX XXXXX SECURITIES CORPORATION
By: CREDIT SUISSE FIRST BOSTON
CORPORATION
By:
------------------------
[Title]
29
By: XXXXXXX XXXXX XXXXXX INC.
By:
------------------------
[Title]
Acting on behalf of themselves and as the Representatives of the several
Underwriters.
30
SCHEDULE A
Number of
Firm Units
Underwriter to be Purchased
----------- ---------------
Credit Suisse First Boston Corporation.......................................
Xxxxxxx Xxxxx Barney Inc. ...................................................
First Union Securities, Inc..................................................
Banc One Capital Markets, Inc................................................
BNY Capital Markets, Inc.....................................................
Fleet Securities, Inc........................................................
Mizuho International plc.....................................................
XX Xxxxx Securities Corporation..............................................
-------------
Total ............................................................
31
SCHEDULE B
List of persons and entities subject to lock-up
32
SCHEDULE C
List of Company's Significant Subsidiaries
33
