UNDERWRITING AGREEMENT
April 30, 1998
TRICON Global Restaurants, Inc.
0000 Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
We (the "Manager") are acting on behalf of the underwriter or
underwriters (including ourselves) named below (such underwriter or underwriters
being herein called the "Underwriters"), and we understand that TRICON Global
Restaurants, Inc., a North Carolina corporation (the "Company"), proposes to
issue and sell $350,000,000 aggregate principal amount ($349,384,000 initial
offering price) of its 7.45% Senior Notes due May 15, 2005 (the "Seven-Year
Notes") and $250,000,000 aggregate principal amount ($249,437,500 initial
offering price) of its 7.65% Senior Notes due May 15, 2008 (the "Ten-Year
Notes" and, together with the Seven-Year Notes, the "Debt Securities").
Subject to the terms and conditions set forth or incorporated by
reference herein, the Company hereby agrees to sell and the Underwriters
agree to purchase, severally and not jointly, the (i) principal amount of the
Seven-Year Notes set forth opposite their names at a purchase price of
98.449% of the principal amount thereof plus accrued interest, if any, from
May 6, 1998 and (ii) principal amount of the Ten-Year Notes set forth
opposite their names at a purchase price of 98.275% of the principal amount
thereof plus accrued interest, if any, from May 5, 1998:
Principal Amount Principal Amount
Name of of
---- Seven-Year Notes Ten-Year Notes
---------------- ----------------
Xxxxxxx, Sachs & Co. $ 210,002,000 $ 150,001,000
Chase Securities Inc. 46,666,000 33,333,000
Xxxxxx Brothers Inc. 46,666,000 33,333,000
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated 46,666,000 33,333,000
---------------- ----------------
$ 350,000,000 $ 250,000,000
---------------- ----------------
---------------- ----------------
The Underwriters will pay for the Debt Securities upon delivery
thereof to the Depositary Trust Company ("DTC") or its designated custodian at
(i) in the case of the Seven-Year Notes, 10:00 a.m. (New York time) on May 6,
1998, or at such other time, not later than 5:00 p.m. (New York time) on May 6,
1998, as shall be designated by the Manager and (ii) in the case of the Ten-Year
Notes, 10:00 a.m. (New York time) on May 5, 1998, or at such other time, not
later than 5:00 p.m. (New York time) on May 5, 1998, as shall be designated by
the Manager. The times and dates of such payments and deliveries are each
hereinafter referred to successively as the "Closing Date."
The Debt Securities shall have the terms set forth in the Prospectus
dated April 15, 1998, as supplemented by the Prospectus Supplement dated April
30, 1998, including the following:
TERMS OF DEBT SECURITIES:
A. The Seven-Year Notes
Maturity Date: May 15, 2005
Interest Rate: 7.45%
Redemption Provisions: As set forth in the Prospectus Supplement
under "Description of Notes."
Interest Payment Dates: May 15 and November 15 commencing November 15,
1998 (interest accrues from May 6, 1998).
2
Form and Denominations: Global Note registered in the name of Cede &
Co., as the nominee of DTC. Beneficial
interests in such Global Note will be in
denominations of $1,000 and integral
multiples thereof.
Ranking: The Seven-Year Notes will be senior unsecured
debt obligations of the Company issued under
the Indenture, dated as of May 1, 1998 (the
"Indenture"), by and among the Company, as
issuer, and The First National Bank of
Chicago, as trustee (the "Trustee"), and will
rank PARI PASSU with all other senior
unsecured indebtedness of the Company from
time to time outstanding.
B. The Ten-Year Notes
Maturity Date: May 15, 2008
Interest Rate: 7.65%
Redemption Provisions: As set forth in the Prospectus Supplement
under "Description of Notes."
Interest Payment Dates: May 15 and November 15 commencing November 15,
1998 (interest accrues from May 5, 1998).
Form and Denominations: Global Note registered in the name of Cede &
Co., as the nominee of DTC. Beneficial
Interests in such Global Note will be in
denominations of $1,000 and integral
multiples thereof.
Ranking: The Ten-Year Notes will be senior unsecured
debt obligations of the Company issued under
the Indenture and will rank PARI PASSU with
all other senior unsecured indebtedness of
the Company from time to time outstanding.
3
All provisions contained in the document entitled TRICON Global
Restaurants, Inc. Underwriting Agreement Standard Provisions (Debt Securities)
dated April 30, 1998, a copy of which is attached hereto, are hereby
incorporated by reference in their entirety and shall be deemed to be a part of
this Agreement to the same extent as if such provisions had been set forth in
full herein, except that if any term defined in such document is otherwise
defined herein, the definition set forth herein shall control.
4
Please confirm your agreement by having an authorized officer sign a
copy of this Agreement in the space set forth below.
Very truly yours,
XXXXXXX, SACHS & CO.,
acting severally on behalf of themselves
and the Underwriters named herein
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Managing Director
NOTICE INFORMATION:
Xxxxxxx, Xxxxx & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Accepted:
TRICON GLOBAL RESTAURANTS, INC.
By:/s/ Xxxxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------- ----------------------------
Name: Xxxxxx X. Xxxxx Name: Xxxxxx X. Xxxxxxxx
Title: Chief Financial Officer Title: Senior Vice President
and Treasurer
NOTICE INFORMATION:
TRICON Global Restaurants, Inc.
0000 Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Attention: Xxxxxxxxx X. Xxxxxxxx, Esq.
and Xxxxxx X. Xxxxxxxx
TRICON GLOBAL RESTAURANTS, INC.
UNDERWRITING AGREEMENT
STANDARD PROVISIONS
(DEBT SECURITIES)
April 30, 1998
From time to time, TRICON Global Restaurants, Inc., a North Carolina
corporation (the "Company"), may enter into one or more underwriting agreements
that provide for the sale of designated securities to the several underwriters
named therein. The standard provisions set forth herein may be incorporated by
reference in any such underwriting agreement (an "Underwriting Agreement").
The Underwriting Agreement, including the provisions incorporated therein by
reference, is herein referred to as "this Agreement." Terms defined in this
Agreement are used herein as therein defined.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement including a prospectus, which, among
other things, relates to the Debt Securities and has filed with, or transmitted
for filing to, or shall promptly hereafter file with or transmit for filing to,
the Commission a prospectus supplement (the "Prospectus Supplement")
specifically relating to the Debt Securities pursuant to Rule 424(b) under the
Securities Act of 1933, as amended (the "Securities Act"), and/or a term sheet
or an abbreviated term sheet (each, a "Term Sheet"), pursuant to Rule 434 of the
rules and regulations of the Commission under the Securities Act (the
"Securities Act Regulations"), specifically relating to the Debt Securities.
The term Registration Statement means the registration statement as amended to
the date of this Agreement. The term Basic Prospectus means the prospectus
included in the Registration Statement at the time the Registration Statement
was declared effective by the Commission. The term Prospectus means the Basic
Prospectus together with the final Prospectus Supplement 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. The term preliminary prospectus means a
preliminary prospectus supplement specifically relating to the Debt Securities
together with the Basic Prospectus. Any reference herein to the Registration
Statement or the Prospectus shall be deemed to refer to and include the
documents, financial statements and schedules incorporated by
1
reference therein or deemed to be incorporated by reference therein pursuant
to Item 12 of Form S-3 under the Securities Act, and any reference to any
amendment or supplement to the Registration Statement or the Prospectus shall
be deemed to refer to and include any documents, financial statements and
schedules filed by the Company with the Commission under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and so incorporated by
reference or deemed to be incorporated therein (such incorporated documents,
financial statements and schedules being herein called the "Incorporated
Documents"). Notwithstanding the foregoing, for purposes of this Agreement
any prospectus, prospectus supplement, term sheet or abbreviated term sheet
prepared or filed with respect to an offering pursuant to the Registration
Statement of a series of securities other than the Debt Securities shall not
be deemed to have supplemented the Prospectus.
1. REPRESENTATIONS AND WARRANTIES. The Company represents and warrants
to each of the Underwriters that:
(a) (i) The Registration Statement has been declared effective by
the Commission and no stop order suspending the effectiveness of the
Registration Statement is in effect nor, to the Company's knowledge, are any
proceedings for such purpose pending before or threatened by the Commission,
(ii) as of the Effective Date, the Company met the applicable requirements for
use of Form S-3 under the Securities Act with respect to the registration under
the Securities Act of $2,000,000,000 in aggregate public offering price of Debt
Securities and (iii) as of the Effective Date, the Registration Statement met
the requirements set forth in Rule 415(a)(l)(x) under the Securities Act and
complied in all material respects with said Rule.
(b) (i) Each document, if any, filed or to be filed pursuant to
the Exchange Act and incorporated or to be incorporated by reference in the
Prospectus complies or will comply, in all material respects, with the
applicable provisions of the Exchange Act and the rules and regulations of the
Commission thereunder, (ii) the Registration Statement and any amendments
thereto, do not and will not, as of the applicable effective date, 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,
(iii) the Registration Statement and the Prospectus comply, and any further
amendments or supplements to the Registration Statement or the Prospectus will
comply, in all material respects, with the Securities Act and the Securities Act
Regulations, and the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act") and (iv) the Prospectus and any amendment or supplement thereto,
do not and will not, as of the date thereof, contain any untrue statement of a
material fact or omit to state
2
a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; PROVIDED, HOWEVER,
that the Company makes no representations and warranties (l) as to
information contained in or omitted from the Registration Statement or the
Prospectus in reliance upon and in conformity with information furnished in
writing to the Company by or on behalf of the Underwriters expressly for use
in the Registration Statement or the Prospectus or any amendment or
supplement thereto, or (2) as to that part of the Registration Statement that
constitutes the Statement of Eligibility and Qualification of the Trustee
(the "Form T-l") under the Trust Indenture Act.
(c) Each of the Company and KFC Corporation, Pizza Hut, Inc. and
Taco Xxxx Corp. (each a "Principal Subsidiary") has been duly incorporated and
is validly existing and in good standing under the laws of its state of
incorporation, has the corporate power and authority to own its property and to
conduct its business as described in the Prospectus, and is duly qualified to
transact business as a foreign corporation and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the failure to
be so qualified or in good standing would not have a material adverse effect on
the Company and its subsidiaries taken as a whole. All of the outstanding
shares of capital stock or other securities evidencing equity ownership of each
Principal Subsidiary have been duly and validly authorized and issued and are
fully paid and non-assessable, and are owned by the Company free and clear of
any security interest, claim, lien or encumbrance.
(d) The Indenture has been duly qualified under the Trust
Indenture Act and has been duly authorized, executed, and delivered by the
Company and (assuming due authorization, valid execution, and delivery thereof
by the Trustee) is a valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms, except to the extent that (x)
enforcement thereof may be limited by (i) the laws of bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium, or similar laws relating to
or affecting creditors' rights generally (whether now or hereafter in effect),
(ii) laws limiting rights of indemnity or contribution, or (iii) equitable
principles of general applicability (regardless of whether enforceability is
considered in a proceeding at law or in equity) and (y) the waiver contained in
Section 6.12 of the Indenture may be deemed unenforceable; and the Indenture
conforms in all material respects to the description thereof contained in the
Prospectus.
3
(e) This Agreement has been duly authorized, executed, and
delivered by the Company.
(f) The Debt Securities have been duly authorized and, when
issued, executed, and authenticated in accordance with the provisions of the
Indenture (which will be substantially in the form filed as an exhibit to the
Registration Statement), and delivered to and duly paid for in accordance
with the applicable provisions of the Prospectus and this Agreement, will be
entitled to the benefits of the Indenture and will be valid and binding
obligations of the Company, enforceable against the Company in accordance
with their respective terms, except to the extent that (x) enforcement
thereof may be limited by (i) the laws of bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium, or similar laws relating
to or affecting creditors' rights generally (whether now or hereafter in
effect), (ii) laws limiting rights of indemnity or contribution, or (iii)
equitable principles of general applicability (regardless of whether
enforceability is considered in a proceeding at law or in equity) and (y) the
waiver contained in Section 6.12 of the Indenture may be deemed
unenforceable; and the Debt Securities will conform in all material respects
to the description thereof contained in the Prospectus.
(g) The execution and delivery of this Agreement and the Indenture
by the Company, the issuance and sale of the Debt Securities and the performance
by the Company of its obligations under this Agreement, the Debt Securities and
the Indenture, as the case may be, will not conflict with or constitute a breach
or violation of or default (with the passage of time or otherwise) under (A) the
Restated Articles of Incorporation or By-Laws of the Company, (B) any agreement
or other instrument binding upon the Company or any of its subsidiaries, which
breach or default would, singly or in the aggregate, have a material adverse
effect on the consolidated financial condition or earnings of the Company and
its subsidiaries, considered as one enterprise, (C) any statute, law or
regulation to which the Company or any of its properties may be subject, which
violation would, singly or in the aggregate, have a material adverse effect on
the consolidated financial condition or earnings of the Company and its
subsidiaries, considered as one enterprise, or (D) of any judgment, order, or
decree of any governmental body, agency, or court having jurisdiction over the
Company or any of its subsidiaries; and no consent, approval, authorization, or
order of or qualification or registration with any governmental body or agency
is, to the Company's knowledge, required for the performance by the Company of
its obligations under this Agreement, the Debt Securities or the Indenture,
other than registration thereof under the Securities Act, qualification of the
Indenture under the Trust Indenture Act and such registrations
4
or qualifications as may be necessary under the Blue Sky laws or other
securities laws of the various states in which the Debt Securities may be
offered and sold.
(h) There has not been any material adverse change (or
development involving a prospective material adverse change) in the business,
properties, earnings, or financial condition of the Company and its
subsidiaries on a consolidated basis from that set forth in the Company's
last periodic report filed with the Commission under the Exchange Act and the
rules and regulations promulgated thereunder.
(i) There are no legal or governmental proceedings pending or,
to the Company's knowledge, threatened, to which the Company or any of its
subsidiaries is a party or to which any of the properties of the Company or
any of its subsidiaries is subject that is required to be described in the
Registration Statement or the Prospectus and is not so described, or any
applicable statute, regulation, contract, or other document that is required
to be described in the Registration Statement or the Prospectus that is not
so described.
(j) The Company is not and, after giving effect to the offering
and sale of the Debt Securities, will not be an "investment company" or an
entity "controlled" by an "investment company," as such terms are defined in
the Investment Company Act of 1940, as amended.
(k) KPMG Peat Marwick LLP, who has certified certain financial
statements of the Company and its subsidiaries, are, to the Company's
knowledge, independent public accountants as required by the Securities Act
and the Securities Act Regulations.
2. PUBLIC OFFERING. The Company is advised by the Manager that the
Underwriters propose to make a public offering of their respective portions
of the Debt Securities as soon after this Agreement has been entered into as
in the Manager's judgment is advisable. The terms of the public offering of
the Debt Securities have been provided by the Manager to the Company and are
in all material respects completely set forth in the Prospectus.
3. PURCHASE AND DELIVERY. Except as otherwise provided in this
Section 3, payment for the Debt Securities shall be made by wire transfer, of
immediately available funds, by the Underwriters to the order of the Company,
at the time set forth in this Agreement, upon delivery to the Manager for the
respective accounts of the several Underwriters of the Debt Securities,
registered in such names and in such denominations
5
as the Manager shall request in writing not less than two full business days
prior to the date of delivery. Delivery on the applicable Closing Date of any
Debt Securities that are in bearer form shall be effected by delivery of a
single temporary global Debt Security without coupons (the "Global Debt
Security"), evidencing the Debt Securities that are Debt Securities in bearer
form to a common depositary for Xxxxxx Guaranty Trust Company of New York,
Brussels office, as operator of the Euro-clear System ("Euro-clear"), and for
Centrale de Livraison de Valeurs Mobilieres S.A. ("CEDEL") for credit to the
respective accounts at Euro-clear or CEDEL of each Underwriter or to such
other accounts as such Underwriter may direct. Any Global Debt Security
shall be delivered to the Manager not later than the applicable Closing Date,
against payment of funds to the Company in the net amount due to the Company
for such Global Debt Security by the method and in the form set forth herein.
The Company shall cause definitive Debt Securities in bearer form to be
prepared and delivered in exchange for such Global Debt Security in such
manner and at such time as may be provided in or pursuant to the Indenture;
provided, however, that the Global Debt Security shall be exchangeable for
definitive Debt Securities in bearer form only on or after the date specified
for such purpose in the Prospectus.
4. PAYMENT OF EXPENSES. The Company will pay all expenses incident to
the performance of its obligations under this Agreement, including (i) the
preparation, printing and filing of the Registration Statement (including
financial statements and exhibits) as originally filed and of each amendment
thereto, (ii) the printing and delivery to the Underwriters of this
Agreement, any agreement among Underwriters, the Indenture and such other
documents as may be required in connection with the offering, purchase, sale
and delivery of the Debt Securities, (iii) the preparation, issuance and
delivery of the Debt Securities and any certificates for the Debt Securities
to the Underwriters, (iv) the fees and disbursements of the Company's
counsel, accountants and other advisors or agents (including transfer agents
and registrars), as well as the fees and disbursements of the Trustee and its
counsel, (v) the qualification of the Debt Securities under state securities
laws or the applicable laws of any foreign jurisdiction in which the Debt
Securities are offered in accordance with the provisions of Section 6(g)
hereof, including filing fees and the reasonable fees and disbursements of
counsel for the Underwriters in connection therewith and in connection with
the preparation, printing and delivery of the Blue Sky Survey and any Legal
Investment Survey, and any amendment thereto, (vi) the printing and delivery
to the Underwriters of copies of each preliminary prospectus, any Term Sheet,
and the Prospectus and any amendments or supplements thereto, (vii) the fees
charged by nationally recognized statistical rating organizations for the
rating of the Debt Securities, and (viii) the fees and expenses incurred with
respect to the listing of the Debt Securities on any securities exchange.
6
5. CONDITIONS TO CLOSING. The several obligations of the Underwriters
hereunder are subject to (i) the condition that the representations and
warranties of the Company contained herein are true and correct (or, with
respect to the representations and warranties contained in Section 1 that are
not qualified as to materiality, are true and correct in all material
respects) and the Company has complied with all agreements required by this
Agreement or the Indenture on its part to be performed, and (ii) the
following additional conditions precedent:
(a) The Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed for such
filing by the Securities Act Regulations and in accordance with Section 6(b)
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 Manager's reasonable satisfaction.
(b) OPINION OF COUNSEL EMPLOYED BY THE COMPANY. On the
applicable Closing Date, the Underwriters shall have received an opinion of
Xxxxxxxxx X. Xxxxxxxx, Esq., Senior Vice President, General Counsel and
Secretary of the Company, or such other counsel as may be selected by the
Company and agreed to by the Manager, dated as of the applicable Closing
Date, in form and substance reasonably satisfactory to the Manager to the
effect that:
(i) The Company has been duly incorporated and is validly
existing and in good standing under the laws of the State of North
Carolina. Each Principal Subsidiary is validly existing and in good
standing under the laws of its state of incorporation.
(ii) The Company has the corporate power and authority to enter
into and perform its obligations under this Agreement and the Indenture
and to issue and sell the Debt Securities.
(iii) This Agreement has been duly authorized, executed and
delivered by the Company.
(iv) The Indenture has been duly authorized, executed and
delivered by the Company.
7
(v) The Debt Securities have been duly authorized by the Company.
(vi) The execution and delivery of this Agreement and the
Indenture by the Company, the issuance and sale of the Debt Securities,
and the performance by the Company of its obligations under this
Agreement, the Debt Securities and the Indenture, as the case may be,
will not conflict with or constitute a breach or violation of or default
(with the passage of time or otherwise) under (A) the Restated Articles
of Incorporation or By-Laws of the Company, (B) subject to the Company's
compliance with any applicable covenants pertaining to its incurrence of
unsecured indebtedness contained therein, any agreement or other
instrument binding upon the Company or any of its subsidiaries, which
breach or default would, singly or in the aggregate, have a material
adverse effect on the consolidated financial condition or earnings of
the Company and its subsidiaries, considered as one enterprise, (C) any
statute, law or regulation to which the Company or any of its properties
may be subject, or (D) to such counsel's knowledge, after due inquiry,
any judgment, order, or decree of any governmental body, agency, or
court having jurisdiction over the Company or any of its subsidiaries,
except that such counsel may state that the opinion set forth in clause
(C) of this paragraph (vi) is limited to those statutes, laws or
regulations in effect on the date of this opinion which, in such
counsel's experience, are normally applicable to transactions of the
type contemplated by this Agreement and such counsel expresses no
opinion as to the Blue Sky laws or other securities laws of the various
states in which the Debt Securities may be offered and sold.
(vii) No consent, approval, authorization, or order of or
qualification or registration with any court or other governmental body
or agency is, to such counsel's knowledge, required for the performance
by the Company of its obligations under this Agreement, the Debt
Securities or the Indenture, other than registration thereof under the
Securities Act, qualification of the Indenture under the Trust Indenture
Act, and such registrations or qualifications as may be necessary under
the Blue Sky laws or other securities laws of the various states in
which the Debt Securities may be offered and sold.
(viii) To such counsel's knowledge after due inquiry, there is no
legal or governmental proceeding pending or threatened, no statute or
regulation, and no agreement, instrument, or other document to which, in
any case, the Company or any of its subsidiaries is a party, or by
which, in any case, any of the properties of the Company or its
subsidiaries is bound, that is required to be
8
described in the Registration Statement or the Prospectus, or that is
required to be filed as an exhibit to the Registration Statement, that
is not so described or filed.
(ix) Each document incorporated, or deemed to be incorporated, by
reference in the Registration Statement and the Prospectus, at the time
such document was filed with the Commission appeared on its face to be
appropriately responsive in all material respects to the requirements of
the Exchange Act and the rules and regulations of the Commission
thereunder, except that in each case such counsel need not express an
opinion as to the financial statements, schedules and other financial
data included or incorporated by reference in, or excluded from, the
Registration Statement or the Prospectus.
In addition, such counsel shall state that he has participated in
conferences with officers and other representatives of the Company, counsel
employed by the Company, representatives of the independent accountants for
the Company, representatives of the Underwriters and counsel for the
Underwriters, at which the contents of the Registration Statement and
Prospectus and related matters were discussed and, although such counsel is
not passing upon, and does not assume any responsibility for, the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus and has not made any independent check or
verification thereof, on the basis of the foregoing, no facts have come to
such counsel's attention that have led him to believe that the Registration
Statement (including the documents incorporated, or deemed to be
incorporated, by reference therein), at the time the Company filed its Annual
Report on Form 10-K for the fiscal year ended December 27, 1997, 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 that the Prospectus (including the documents incorporated, or
deemed to be incorporated, by reference therein), as of the date of this
Agreement and at the Closing Date, contained or contains an untrue statement
of a material fact or omitted or omits 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, except that such counsel need express
no opinion or belief with respect to (i) the financial statements, schedules
and other financial data included or incorporated by reference in, or
excluded from, the Registration Statement or the Prospectus or (ii) the Form
T-1.
(c) OPINION OF COUNSEL TO THE COMPANY. On the Closing Date, the
Underwriters shall have received an opinion from Skadden, Arps, Slate, Xxxxxxx &
9
Xxxx LLP, counsel to the Company, dated as of the applicable Closing Date, in
form and substance reasonably satisfactory to the Manager to the effect that:
(i) Assuming the Indenture has been duly authorized, executed,
and delivered by the Company and, assuming due authorization, valid
execution, and delivery by the Trustee, the Indenture is a valid and
binding agreement of the Company, enforceable against the Company in
accordance with its terms, except to the extent that (x) enforcement
thereof may be limited by (i) the laws of bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium, or similar laws
relating to or affecting creditors' rights generally (whether now or
hereafter in effect), (ii) laws limiting rights of indemnity or
contribution, or (iii) equitable principles of general applicability
(regardless of whether enforceability is considered in a proceeding at
law or in equity) and (y) the waiver contained in Section 6.12 of the
Indenture may be deemed unenforceable.
(ii) Assuming the Debt Securities have been duly authorized by
the Company, when issued, executed, and authenticated in accordance with
the provisions of the Indenture, and delivered to and duly paid for in
accordance with the applicable provisions of the Prospectus and this
Agreement, the Notes will be entitled to the benefits of the Indenture
and will be valid and binding obligations of the Company, enforceable
against the Company in accordance with their respective terms, except to
the extent that (x) enforcement thereof may be limited by (i) the laws
of bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium, or similar laws relating to or affecting creditors' rights
generally (whether now or hereafter in effect), (ii) laws limiting
rights of indemnity or contribution, or (iii) equitable principles of
general applicability (regardless of whether enforceability is
considered in a proceeding at law or in equity), and (y) the waiver
contained in Section 6.12 of the Indenture may be deemed unenforceable.
(iii) The statements in the Prospectus under the captions
"Description of the Debt Securities" and "Description of Notes," insofar
as they purport to summarize certain provisions of the Indenture and the
Debt Securities, are in all material respects accurate summaries of such
provisions and, to the extent that such statements constitute matters of
law, summaries of legal matters, legal proceedings or legal conclusions,
are accurate and complete in all material respects.
10
(iv) Although the discussion set forth in the Prospectus under
the heading "Certain United States Federal Tax Considerations" does not
purport to discuss all possible United States federal income tax
consequences of the purchase, ownership, and disposition of the Debt
Securities, in such counsel's opinion, such discussion constitutes, in
all material respects, a fair and accurate summary of the United States
federal income tax consequences of the purchase, ownership, and
disposition of the Debt Securities, based upon current law and subject
to the qualifications set forth therein.
(v) The Registration Statement (excluding the documents
incorporated, or deemed to be incorporated, by reference therein), at
the time the Registration Statement became effective, and the Prospectus
(excluding the documents incorporated, or deemed to be incorporated, by
reference therein), as of the date of this Agreement and at the Closing
Date, each appeared on its face to be appropriately responsive in all
material respects to the requirements of the Securities Act and the
rules and regulations of the Commission thereunder and the Trust
Indenture Act, except that in each case such counsel need not express an
opinion as to (i) the documents incorporated, or deemed to be
incorporated, by reference in the Registration Statement or the
Prospectus, (ii) the financial statements, schedules and other financial
data included or incorporated by reference in, or excluded from, the
Registration Statement or the Prospectus or (ii) the Form T-1.
In addition, such counsel shall state that they have participated
in conferences with officers and other representatives of the Company,
counsel employed by the Company, representatives of the independent
accountants of the Company, representatives of the Underwriters and counsel
for the Underwriters, at which the contents of the Registration Statement and
Prospectus and related matters were discussed and, although such counsel is
not passing upon, and does not assume any responsibility for, the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus (other than as provided in subparagraphs (iii)
and (iv) above) and have made no independent check or verification thereof,
on the basis of the foregoing, no facts have come to such counsel's attention
that have led them to believe that the Registration Statement (excluding the
documents incorporated, or deemed to be incorporated, by reference therein),
at the time the Company filed its Annual Report on Form 10-K for the fiscal
year ended December 27, 1997, 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 that the
Prospectus (excluding the documents incorporated, or deemed to be
incorporated, by
11
reference therein), as of the date of this Agreement and at the Closing Date,
contained or contains an untrue statement of a material fact or omitted or
omits 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, except that such counsel need express no opinion or belief with
respect to (i) the documents incorporated, or deemed to be incorporated, by
reference in the Registration Statement or the Prospectus, (ii) the financial
statements, schedules and other financial data included or incorporated by
reference in, or excluded from, the Registration Statement or the Prospectus
or (iii) the exhibits to the Registration Statement, including the Form T-1.
(d) OPINION OF UNDERWRITERS' COUNSEL. On the applicable Closing
Date, the Underwriters shall have received an opinion from counsel to the
Underwriters, dated as of the applicable Closing Date, and in form and
substance satisfactory to the Underwriters.
(e) OFFICER'S CERTIFICATE. On the applicable Closing Date, the
Underwriters shall have received a certificate signed by an officer of the
Company, dated the Closing Date, to the effect that (i) the representations
and warranties of the Company contained in Section 1 hereof are true and
correct (or, with respect to the representations and warranties contained in
Section 1 that are not qualified as to materiality, true and correct in all
material respects) with the same force and effect as though expressly made at
and as of the date of such certificate and (ii) the Company has complied with
all agreements and satisfied all conditions required by this Agreement or the
Indenture on its part to be performed or satisfied at or prior to the date of
such certificate.
(f) COMFORT LETTER. On the date hereof, the Underwriters shall
have received a letter (an "Auditor's Letter") from KPMG Peat Marwick LLP
("KPMG"), or such other independent certified public accountants as may be
selected by the Company (KPMG or such other independent certified public
accountants that have certified the financial statements covered by any
applicable Auditor's Letter each, successively, the "Company's Auditors"),
dated as of the date hereof and in form and substance reasonably satisfactory
to the Underwriters, containing statements and information of a type
ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information
(including, without limitation, any pro forma financial statements and pro
forma financial information) contained or incorporated by reference in the
Registration Statement and the Prospectus; and, if financial statements for
any assets, business or entity acquired by the Company are included or
incorporated by reference in the Registration Statement or the
12
Prospectus, the Underwriters shall have received a similar "comfort letter"
from the Company's Auditors, dated as of the date hereof, and in form and
substance reasonably satisfactory to the Underwriters, with respect to such
financial statements and any financial information with respect to such
assets, business or entity, as the case may be, contained or incorporated by
reference in the Registration Statement and the Prospectus. Without
limitation to the foregoing, the letter delivered by the Company's Auditors
shall state that nothing has come to their attention that caused them to
believe that at a specified date not more than five days prior to the date of
such letter, there was any change in the outstanding capital stock of the
Company or any increase in consolidated long-term debt of the Company or any
decrease in the stockholders' equity of the Company, in each case as compared
with the amounts shown on the most recent consolidated balance sheet of the
Company incorporated by reference in the Registration Statement and
Prospectus or, during the period from the date of such balance sheet to a
specified date not more than five days prior to the date of such letter,
there were any decreases, as compared with the corresponding period in the
preceding year, in consolidated net sales and operating revenues or net
income of the Company, except in each such case as set forth in or
contemplated by the Registration Statement and Prospectus or except for such
exceptions enumerated in such letter as shall have been agreed to by the
Underwriters and the Company.
(g) SUBSEQUENT DELIVERY OF COMFORT LETTER. On the applicable
Closing Date, the Underwriters shall have received from each firm of
independent public accountants which delivered a letter pursuant to
subsection (f) of this Section, dated as of the applicable Closing Date, to
the effect that they reaffirm the statements made in the letter furnished
pursuant to subsection (f) of this Section, except that the specified date
referred to shall be a date not more than five days prior to the applicable
Closing Date.
(h) OTHER DOCUMENTS. On the applicable Closing Date, counsel to
the Underwriters shall have been furnished with such documents and opinions
as such counsel may reasonably require for the purpose of enabling such
counsel to pass upon the issuance and sale of Debt Securities as herein
contemplated and related proceedings, or in order to evidence the accuracy
and completeness of any of the representations and warranties or the
fulfillment of any of the conditions herein contained.
6. COVENANTS OF THE COMPANY. In further consideration of the
agreements of the Underwriters contained herein, the Company covenants as
follows:
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(a) NOTICE OF CERTAIN EVENTS. The Company will promptly advise
the Manager of (i) the filing and effectiveness of any amendment to the
Registration Statement other than by virtue of the Company's filing any
report required to be filed under the Exchange Act and the filing of any
supplement to the Prospectus other than any amendment or supplement relating
solely to an offering of securities other that the Debt Securities, (ii) any
request by the Commission for any amendment to the Registration Statement,
for any amendment or supplement to the Prospectus, or for any additional
information from the Company (other than any such request relating to an
offering of securities other than the Debt Securities), (iii) the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or preventing or suspending the use of any Prospectus
relating to the Debt Securities or the institution or threatening of any
proceeding for any such purpose, and (iv) the receipt by the Company of any
notification with respect to the suspension of the qualification of the Debt
Securities for sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose. The Company will use reasonable efforts to
prevent the issuance of any such stop order or notice of suspension of
qualification and, if issued, to obtain as soon as reasonably possible the
withdrawal thereof.
(b) NOTICE OF CERTAIN PROPOSED FILINGS. During the period from
the date of this Agreement to and including the last Closing Date, at or
prior to the filing by the Company of any amendment to the Registration
Statement or of any supplement to the Prospectus (other than any amendment or
supplement relating solely to an offering of securities other than the Debt
Securities), or any document the Company is required to file pursuant to
Section 13(a), 13(c), 14, or 15(d) of the Exchange Act (other than the
Company's Quarterly Report on Form 10-Q for the quarter ended March 21, 0000
(xxx "Xxxxx Xxxxxxx 00X")), the Company will furnish the Manager and the
Underwriters with copies of any such amendment or supplement or other
documents in a reasonable amount of time prior to such proposed filing and
will not file any such document to which the Manager shall reasonably object,
unless, in the judgment of the Company or its counsel, such amendment or
supplement or other document is necessary to comply with law. Subject to the
foregoing sentence, the Company will promptly cause each applicable
supplement to the Prospectus to be filed with or transmitted for filing with
the Commission in accordance with Rule 424(b) or 424(c) under the Securities
Act or pursuant to such other rule or regulation of the Commission as then
deemed appropriate by the Company. The Company will furnish the Manager and
the Underwriters with copies of the First Quarter 10Q prior to filing it with
the Commission.
(c) COPIES OF THE REGISTRATION STATEMENT AND THE PROSPECTUS. The
Company will furnish (in New York) to the Underwriters, without charge, one
original
14
signed copy of the Registration Statement (including exhibits) and all
amendments thereto that shall become effective, and as many copies of the
Prospectus, any documents incorporated by reference therein, and any
supplements and amendments thereto as the Underwriters may reasonably
request, in each case within a reasonable period of time following the date
on which this Agreement is executed and delivered by the Company and the
Manager, or the date on which such document becomes effective, or the date on
which such document is requested by the Underwriters, as applicable.
(d) REVISIONS OF REGISTRATION STATEMENT AND PROSPECTUS --
MATERIAL CHANGES. If, at any time when a prospectus relating to the Debt
Securities is required to be delivered under the Securities Act by the
Underwriters, any event occurs or condition exists as a result of which the
Prospectus would include an untrue statement of a material fact, or omit to
state a material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, or if for any
reason it is necessary to amend or supplement the Prospectus or to file under
the Exchange Act any document incorporated by reference in the Prospectus in
order to comply with the Securities Act, the Exchange Act or the Trust
Indenture Act, or the respective rules and regulations of the Commission
thereunder, or any other applicable law, the Company will promptly notify the
Underwriters, by telephone or by facsimile (in either case with written
confirmation from the Company by mail), and will promptly prepare and,
subject to Section 6(b), cause to be filed with the Commission the
appropriate documents or appropriate amendment or supplement to the
Registration Statement or the Prospectus, as the case may be, and will supply
without charge to the Underwriters one copy of a signed copy of any such
amended Registration Statement and will supply without charge to the
Underwriters as many copies of any such amended or supplemented Prospectus as
the Underwriters may from time to time reasonably request.
(e) COMPLIANCE WITH EXCHANGE ACT. The Company, during the
period when the Prospectus is required to be delivered under the Securities
Act or the Exchange Act, will comply, in a timely manner, with all applicable
requirements under the Exchange Act relating to the filing with the
Commission of the Company's reports pursuant to Section 13(a), 13(c) or 15(d)
of the Exchange Act and, if then applicable, the Company's proxy statements
pursuant to Section 14(a) of the Exchange Act.
(f) EARNINGS STATEMENT. The Company will make generally
available to its security holders earnings statements that satisfy the
provisions of Section 11 (a) of the Securities Act and Rule 158 promulgated
thereunder.
15
(g) BLUE SKY QUALIFICATIONS. The Company will, with such
assistance from the Underwriters as the Company may reasonably request,
endeavor to qualify the Debt Securities for offer and sale under the Blue Sky
laws or other securities laws of such jurisdictions as the Underwriters shall
reasonably request and will maintain such qualifications for as long as
required with respect to the offer, sale, and distribution of the Debt
Securities; PROVIDED, HOWEVER, that the Company shall not be obligated to
register or qualify as a foreign corporation or take any action which would
subject it to general service of process in any jurisdiction where it is not
now subject.
(h) SUSPENSION PERIOD. During the period from the date of this
Agreement to and including the last Closing Date, the Company shall not
offer, sell, contract to sell or otherwise dispose of any debt securities of
the Company which mature more than one year after the last Closing Date and
which are substantially similar to the Debt Securities, without the prior
written consent of the Manager.
7. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold each Underwriter
and each person, if any, who controls an Underwriter within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act,
harmless from and against any and all losses, claims, damages, or liabilities
as incurred, insofar as such losses, claims, damages, or liabilities (and
actions in respect thereof) arise out of, are based upon, or are caused by
any untrue statement or allegedly untrue statement of a material fact
contained in the Registration Statement or the Prospectus or in any amendment
or supplement thereto, or arise out of, are based upon or are caused by any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
and the Company agrees to reimburse each such indemnified party for any
reasonable legal or other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim, damage, liability, or
action as such expenses are incurred; PROVIDED, HOWEVER, that the Company
will not be liable to the extent that such losses, claims, damages, or
liabilities (or actions in respect thereof) arise out of, are based upon, or
are caused by (i) any untrue statement or omission or alleged untrue
statement or omission made in reliance upon the Form T-1, (ii) any untrue
statement or omission or alleged untrue statement or omission included in or
omitted from the Registration Statement or the Prospectus in reliance upon
and in conformity with information furnished to the Company by or on behalf
of the Underwriters in writing expressly for use in the Registration
Statement or the Prospectus or any amendment or supplement thereto, or (iii)
any untrue statement or omission or alleged untrue statement or omission in
the preliminary prospectus if
16
such untrue statement or omission or alleged untrue statement or omission is
corrected in the Prospectus and if, having previously been furnished by or
on behalf of the Company with copies of such Prospectus, the Underwriters
thereafter failed to deliver such Prospectus, prior to or concurrently with
the sale of a Debt Security or Debt Securities to the person asserting such
loss, claim, damage, or liability who purchased such Debt Security or Debt
Securities which are subject thereof from the Underwriters.
(b) Each Underwriter severally (and not jointly) agrees to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement, and each person, if any, who controls the Company
within the meaning of either Section 15 of the Securities Act or Section 20
of the Exchange Act, to the same extent as the foregoing indemnity from the
Company to the Underwriters, but only with respect to such losses, claims,
damages, and liabilities (and actions in respect thereof) that arise out of,
are based upon, or are caused by any untrue statement or omission or
allegedly untrue statement or omission included in or omitted from the
Registration Statement or the Prospectus in reliance upon and in conformity
with information furnished to the Company by or on behalf of such Underwriter
in writing expressly for use in the Registration Statement or the Prospectus
or any amendment or supplement thereto.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to either paragraph (a) or (b) of this Section
7, such person (the "indemnified party") will promptly notify the person against
whom such indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, will retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
will pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party will have the right to retain its
own counsel, but the fees and expenses of such counsel will be borne by the
indemnified party unless (i) the indemnifying party and the indemnified party
shall have mutually agreed to the retention of such counsel or (ii) the named
parties to any such proceeding (including any impleaded parties) include both
the indemnifying party (whether or not the indemnifying party was an original
named party to such proceeding) and the indemnified party and such indemnified
party shall have been advised by counsel that there may be actual or potential
conflicts of interest between the Company and the indemnified party including
situations in which there may be one or more legal defenses available to the
indemnified party which are different from, or additional to, those available to
the Company. It is understood that the
17
indemnifying party will not, in connection with any proceeding or
substantially similar or related proceedings in the same jurisdiction, be
liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all such
reasonable fees and expenses will be reimbursed as they are incurred. Such
firm will be designated in writing by the Manager (in the case of parties
indemnified pursuant to the second preceding paragraph) or by the Company (in
the case of parties indemnified pursuant to the first preceding paragraph),
as the case may be. The indemnifying party will not be liable for any
settlement of any claim, action or proceeding effected without its written
consent, but if settled with such consent, or if there shall be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment. No indemnifying party will, without the prior
written consent of the indemnified party, effect any settlement or compromise
of or consent to the entry of any judgment with respect to any pending or
threatened claim, action or proceeding in respect of which any indemnified
party is or could have been a party and indemnity or contribution could have
been sought hereunder by such indemnified party, unless such settlement,
compromise or judgment (i) includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such proceeding and (ii) does not include a statement as to, or an admission
of fault, culpability or a failure to act by, the indemnified party. Any
provision of this paragraph (c) to the contrary notwithstanding, no failure
by an indemnified party to notify the indemnifying party as required
hereunder will relieve the indemnifying party from any liability it may have
had to an indemnified party otherwise than under Section 7(a) or (b).
(d) If the indemnification provided for in paragraph (a) or (b)
of this Section 7 is unavailable to an indemnified party or is insufficient
in respect of any losses, claims, damages, or liabilities referred to
therein, then each indemnifying party under such paragraph, in lieu of
indemnifying the indemnified party thereunder, will contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages, or liabilities (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 Debt Securities by the
Underwriters, or (ii) if the allocation provided by clause (i) 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,
18
on the other, in connection with the statements or omissions that resulted in
such losses, claims, damages, or liabilities, as well as any other relevant
equitable considerations. The relative benefits received by the Company, on
the one hand, and the Underwriters, on the other, in connection with the
offering of Debt Securities by the Underwriters will be deemed to be in the
same proportion as the total net proceeds received by the Company from the
offering of such Debt Securities bears to the total discounts and commissions
received by the Underwriters from the Company in respect thereof. The
relative fault of the Company, on the one hand, and of the Underwriters, on
the other, will be determined by reference to, among other things, whether
the untrue or allegedly untrue statement of a material fact or the omission
or alleged omission to state a material fact relates to information supplied
or to be supplied by the Company or by the Underwriters and the parties'
relative intent, knowledge, access to information, and opportunity to correct
or prevent such statement or omission.
(e) The Company and the Underwriters agree that it would not be
just or equitable if contribution pursuant to paragraph (d) above were
determined by pro rata allocation or by any other method of allocation that
does not take account of the equitable considerations referred to therein.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages, and liabilities referred to in paragraph (d) above will be
deemed to include, subject to the limitations set forth above, any reasonable
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim. Any
other provisions of this Section 7 to the contrary notwithstanding (i) no
Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the applicable Debt 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 and (ii) 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 obligations of the Underwriters of Debt
Securities in this subsection (d) to contribute are several in proportion to
their respective underwriting obligations with respect to such securities and
not joint.
(f) The remedies provided for in this Section 7 are not
exclusive and will not limit any rights or remedies that may otherwise be
available to any indemnified party at law or in equity.
8. TERMINATION. The Underwriters may terminate this Agreement
immediately upon notice to the Company if, at any time prior to the Closing
Date, (i) there shall have occurred (A) any material adverse change (or
development involving a prospective material adverse change) in the business,
properties, earnings, or financial
19
condition of the Company and its subsidiaries on a consolidated basis, (B)
any suspension or material limitation of trading in the Company's capital
stock by the Commission or the New York Stock Exchange, Inc. (the "NYSE"), or
(C) any decrease by Xxxxx'x Investors Services, Inc. or Standard & Poor's
Corporation with respect to the ratings of any of the debt securities issued
or guaranteed by the Company or any public announcement by any such
organization to the effect that it has placed any debt securities issued or
guaranteed by the Company on what is commonly termed a "watch list" with
negative implications (the events described in the foregoing clauses (A)
through (C) the "Company-Specific Events"), the effect of any of which
Company-Specific Events shall have made it impracticable, in the reasonable
judgment of the Manager, to market such Debt Securities, or (ii) there shall
have occurred (A) any suspension or material limitation of trading in
securities generally on the NYSE or the establishment of minimum prices on
the NYSE, (B) a declaration of a general moratorium on commercial banking
activities in New York by either federal or New York State authorities, or
(C) any outbreak or material escalation of hostilities or other national or
international calamity or crisis (the events described in the foregoing
clauses (A) through (C) the "Market Events"), the effect of any of which
Market Events (other than the Market Event described in Clause (B), which
shall not be subject to the following qualification) shall have made it
impracticable, in the reasonable judgment of the Manager, to market such Debt
Securities.
9. DEFAULTING UNDERWRITERS. If on the Closing Date any one or more of
the Underwriters shall fail or refuse to purchase Debt Securities that it has
or they have agreed to purchase on such date, and the aggregate amount of
Debt Securities which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase is not more than one-tenth of the aggregate
amount of the Debt Securities to be purchased on such date, the other
Underwriters shall be obligated severally in the proportions that the amount
of Debt Securities set forth opposite their respective names above bears to
the aggregate amount of Debt Securities set forth opposite the names of all
such non-defaulting Underwriters, or in such other proportions as the Manager
may specify, to purchase the Debt Securities which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase on such
date. If on the Closing Date any Underwriter or Underwriters shall fail or
refuse to purchase Debt Securities and the aggregate amount of Debt
Securities with respect to which such default occurs is more than one-tenth
of the aggregate amount of Debt Securities to be purchased on such date, and
arrangements satisfactory to the Manager and the Company for the purchase of
such Debt Securities are not made within 36 hours after such default, this
Agreement shall terminate without liability on the part of any non-defaulting
Underwriter or the Company. In any such case either the Manager or the
Company shall have the right to
20
postpone the Closing Date but in no event for longer then seven days, in
order that the required changes, if any, in the Registration Statement and in
the Prospectus or in any other documents or arrangements may be effected. Any
action taken under this paragraph shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter
under this Agreement.
10. SURVIVABILITY. The respective indemnities, agreements,
representations, warranties and other statements of the Company and the
several Underwriters, 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 any Underwriter or any controlling
person of any Underwriter, or the Company, or any officer or director or
controlling person of the Company, and shall survive delivery of and payment
for the Debt Securities.
11. CERTAIN OBLIGATIONS. If this Agreement shall be terminated
pursuant to Section 8 hereof, the Company shall not then be under any
liability to any Underwriter with respect to the Debt Securities except as
provided in Sections 4 and 7 hereof; but, if for any other reason (other than
a default by the Underwriters under Section 9 hereof) Debt Securities are
not delivered by or on behalf of the Company as provided herein, the Company
will reimburse the Underwriters through the Manager for all out-of-pocket
expenses approved in writing by the Manager, including fees and disbursements
of counsel, reasonably incurred by the Underwriters in making preparations
for the purchase, sale and delivery of such Debt Securities, but the Company
shall then be under no further liability to any Underwriter with respect to
such Debt Securities except as provided in Sections 4 and 7 hereof.
12. NOTICES. In all dealings hereunder, the Manager shall act on
behalf of each of the Underwriters of Debt Securities, and the parties hereto
shall be entitled to act and rely upon any statement, request, notice or
agreement on behalf of any Underwriter made or given by the Manager.
Except as otherwise specifically provided herein, all
communications hereunder will be in writing and shall be deemed to have been
duly given if delivered by hand, mailed via Express Mail, deposited with
Federal Express or any nationally recognized commercial courier service for
"next day" delivery, or telecopied and confirmed in writing (by telecopied
facsimile or otherwise) to the respective addresses or telecopier numbers set
forth on the signature page hereto, or to such other address or telecopier
number as either party may hereafter designate to the other in writing;
21
provided, however, that any notice to an Underwriter pursuant to Section 7(c)
hereof shall be delivered in a manner provided above to such Underwriter at
its address set forth in its Underwriters' Questionnaire, or telex
constituting such Questionnaire, which address will be supplied to the
Company by the Manager upon request. Any such statements, requests, notices
or agreements shall take effect upon receipt thereof.
13. SUCCESSORS; NON-TRANSFERABILITY. This Agreement will inure to the
benefit of and be binding upon the parties hereto, their respective
successors, and the officers, directors, and controlling persons referred to
in Section 7 hereof. No other person will have any right or obligation
hereunder. Neither party to this Agreement may assign its rights hereunder
without the written consent of the other parties.
14. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY.
All representations, warranties and agreements contained in this Agreement or
in certificates of officers of the Company submitted pursuant hereto will
survive delivery of and payment for the Debt Securities and will survive
termination of this Agreement in accordance with the provisions of Section 9
hereof.
15. COUNTERPARTS. This Agreement may be signed in any number of
counterparts, each of which will be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
16. TIME OF THE ESSENCE. Time shall be of the essence with respect to
this Agreement. As used herein, "business day" shall mean any day when the
Commission's office in Washington, D.C. is open for business.
17. APPLICABLE LAW. This Agreement will be governed by and construed
in accordance with the laws of the State of New York, including without
limitation, New York General Obligations Law Section 5-1401.
18. HEADINGS. The headings of the sections of this Agreement have been
inserted for convenience of reference only and will not affect the
construction of any of the terms or provisions hereof.
22
