Exhibit 1.1
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EXECUTION COPY
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CSX CORPORATION
$400,000,000 6.25% Notes Due 2008
UNDERWRITING AGREEMENT
Dated: October 23, 1998
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CSX CORPORATION
$400,000,000 6.25% Notes Due 2008
UNDERWRITING AGREEMENT
October 23, 1998
Xxxxxxx Xxxxx Xxxxxx Inc.
As Representative of the Underwriters
Seven Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
CSX CORPORATION, a Virginia corporation (the "Company"), proposes to
issue and sell to the parties named in Schedule I hereto (the "Underwriters"),
for whom you are acting as representative (the "Representative"), $400,000,000
principal amount of its 6.25% Notes due 2008 (the "Securities"). The Securities
are to be issued under an indenture (the "Indenture") dated as of August 1, 1990
between the Company and The Chase Manhattan Bank, as trustee, as supplemented
and amended by the First Supplemental Indenture dated as of June 15, 1991 , the
Second Supplemental Indenture dated as of May 6, 1997 and the Third Supplemental
Indenture dated as of April 22, 1998.
In connection with the sale of the Securities, the Company has
prepared and filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (Registration No. 333-53191)
for the registration of debt securities, including the Securities, preferred
stock, securities warrants and depositary shares, under the Securities Act of
1933, as amended (the "Securities Act") and the offering thereof from time to
time in accordance with Rule 415 of the rules and regulations of the Commission
under the Securities Act (the "Securities Act Regulations"). The registration
statement as amended as of the date hereof is hereinafter referred to as the
"Registration Statement"; the prospectus included in the Registration Statement,
as supplemented to reflect the terms of the Securities and the terms of the
offering thereof, as first filed with the Commission pursuant to and in
accordance with Rule 424(b) under the Securities Act, including all material
incorporated by reference therein, is hereinafter referred to as the
"Prospectus." The Prospectus and the Registration Statement incorporate certain
reports of the Company filed pursuant to Section 13 or 14 or 15 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). Any reference
herein to the terms "amend," "amendment" or "supplement" with respect to the
Registration Statement or the Prospectus shall be deemed to include only
amendments or supplements to the Registration Statement or Prospectus, as the
case may be, and documents incorporated by reference therein after the date of
this Agreement and prior to the termination of the offering of the Securities by
the Underwriters. The Company hereby confirms that it has authorized the use
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of the Prospectus, and any amendment or supplement thereto, in connection with
the offer and sale of the Securities by the Underwriters.
1. Representations and Warranties. The Company represents and
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warrants to, and agrees with, each Underwriter as set forth below in this
Section 1. Any reference to persons acting on behalf of the Company does not
include any of the Underwriters, with respect to whom the Company makes no
representation.
(a) The Registration Statement has become effective under the
Securities Act; no stop order suspending the effectiveness of the
Registration Statement is in effect, and no proceedings for such purposes
are pending before or, to the knowledge of the Company, threatened by the
Commission.
(b) At the time the Registration Statement became effective, the
Registration Statement complied in all material respects with the
requirements of the Securities Act and the Securities Act Regulations and
the Trust Indenture Act of 1939, as amended (the "TIA") and the rules and
regulations of the Commission promulgated thereunder. The Registration
Statement, at the time it became effective, did not, and as of the date
hereof does not, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading. The Prospectus, as of the Closing
Date, will not contain an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
provided, however, that the Company makes no representation or warranty as
to statements in or omissions from the Registration Statement or Prospectus
made in reliance upon and in conformity with information furnished to the
Company in writing by or on behalf of an Underwriter expressly for use in
the Registration Statement or Prospectus or to that part of the
Registration Statement which constitutes the Trustee's Statement of
Eligibility and Qualification under the TIA ("Form T-1").
(c) The documents incorporated by reference in the Prospectus, at the
time they were filed with the Commission, complied in all material respects
with the requirements of the Exchange Act and the rules and regulations of
the Commission promulgated thereunder, and, when read together and with the
other information in the Prospectus, did not contain an untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the light
of the circumstances under which they were or are made, not misleading.
(d) Since the respective dates as of which information is given in
the Registration Statement and Prospectus, except as may otherwise be
stated therein or contemplated thereby, there has been no material adverse
change in the condition, financial or otherwise, or in the earnings,
business or properties of the Company and its
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subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business.
(e) The Company has not taken and will not take, directly or
indirectly, any action designed to or which has constituted or which might
reasonably be expected to cause or result in stabilization or manipulation
of the price of the Securities (other than any stabilization done by the
Underwriters, as to which the Company makes no representation).
(f) The Company is not an "investment company" within the meaning of
the Investment Company Act of 1940, as amended (the "Investment Company
Act"), without taking account of any exemption arising out of the number of
holders of the Company's securities.
(g) The information, if any, provided by the Company pursuant to
Section 5(d) hereof will not, at the date thereof, contain 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.
2. Purchase and Sale. Subject to the terms and conditions and in
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reliance upon the representations and warranties herein set forth, the Company
agrees to sell to each Underwriter, and each Underwriter agrees, severally and
not jointly, to purchase from the Company, at a purchase price of 98.652% of the
principal amount thereof, the principal amount of Securities, plus accrued
interest, if any, from October 28, 1998, set forth opposite such Underwriter's
name in Schedule I hereto.
3. Delivery and Payment. Delivery of and payment for the Securities
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shall be made at 10:00 AM, New York City time, on October 28, 1998, or such
later date (not later than November 4, 1998) as the Representative shall
designate, which date and time may be postponed by agreement between the
Representative and the Company or as provided in Section 9 hereof (such date and
time of delivery and payment being herein called the "Closing Date"). Delivery
of the Securities shall be made to the Representative for the respective
accounts of the Underwriters against payment by the Underwriters through the
Representative of the purchase price thereof to or upon the order of the Company
by wire transfer of Federal funds or other immediately available funds or in
such other manner of payment as may be agreed by the Company and the
Representative.
Delivery of any Securities to be issued in definitive certificated
form shall be made on the Closing Date at such location, and in such names and
denominations, as the Representative shall designate at least one business day
in advance of the Closing Date. The Company agrees to have the Securities
available for inspection, checking and packaging by the Representative in New
York, New York, not later than 1:00 PM on the business day prior to the Closing
Date. The closing for the purchase and sale of the Securities shall occur at
the
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office of Shearman & Sterling, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
("Counsel for the Underwriters") or such other place as the parties hereto shall
agree.
4. Offering of Securities. Each Underwriter, severally and not
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jointly, represents and warrants to and agrees with the Company that it shall
deliver to each purchaser of Securities therefrom, in connection with its
original distribution of the Securities, a copy of the Prospectus, as amended
and supplemented at the date of such purchase.
5. Agreements. The Company agrees with each Underwriter that:
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(a) The Company will furnish to each Underwriter and to Counsel for
the Underwriters, without charge, during the period referred to in
paragraph (c) below, as many copies of the Prospectus and any amendments
and supplements thereto as it may reasonably request. The Company will pay
the expenses of printing or other production of all documents relating to
the offering.
(b) The Company will not amend or supplement the Prospectus (other
than by filing documents under the Exchange Act which are incorporated by
reference therein), without having previously advised and furnished to the
Representative a copy of such amendment or supplement to which the
Representative, on advice from counsel, has not reasonably objected;
provided, however, that, prior to the completion of the distribution of the
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Securities by the Underwriters (as determined by the Representative), the
Company will not file any document under the Exchange Act which is
incorporated by reference in the Prospectus unless, prior to such proposed
filing, the Company has furnished the Representative with a copy of such
document. The Company will promptly advise the Representative when any
document filed under the Exchange Act which is incorporated by reference in
the Prospectus shall have been filed with the Commission.
(c) If at any time prior to the earlier of (i) completion of the sale
of the Securities by the Underwriters (as determined by the Representative)
or (ii) six months from the date hereof, any event occurs as a result of
which the Prospectus, as then amended or 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 should be necessary to
amend or supplement the Prospectus (including any document incorporated by
reference therein which was filed under the Exchange Act) to comply with
the Exchange Act or the rules thereunder or other applicable law, the
Company will promptly notify the Representative of the same and, subject to
the requirements of paragraph (b) of this Section 5, will prepare and
provide to the Representative pursuant to paragraph (a) of this Section 5
an amendment or supplement which will correct such statement or omission or
effect such compliance and, if such an amendment or supplement is required
to be filed under the Exchange Act and is to be incorporated by reference
in the Prospectus, will file such amendment or supplement with the
Commission. The
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Representative will promptly advise the Company, in writing, of the
completion of the initial distribution of the Securities.
(d) The Company will, during the period when the Prospectus is
required to be delivered under the Securities Act and during which the
Company is subject to the reporting requirements of Section 13 or Section
15(d) of the Exchange Act, timely file all Annual Reports on Form 10-K,
Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any other
reports, statements, documents, registrations, filings or submissions
required to be filed by the Company with the Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act.
(e) The Company will make generally available to its security holders
as soon as practicable, but not later than 90 days after the close of the
period covered thereby, an earnings statement (in form complying with the
provisions of Rule 158 under the Securities Act) covering a twelve-month
period beginning not later than the first day of the Company's fiscal
quarter next following the "effective date" (as defined in such Rule 158)
of the Registration Statement.
(f) The Company will cooperate with the Representative and use its
reasonable best efforts to permit the Securities to be eligible for
clearance and settlement through The Depository Trust Company.
6. Conditions to the Obligations of the Underwriters. The
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obligations of the Underwriters to purchase the Securities shall be subject to
the accuracy of the representations and warranties on the part of the Company
contained herein at the date and time that this Agreement is executed and
delivered by the parties hereto (the "Execution Time"), and the Closing Date and
to the accuracy of the statements of the Company 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:
(a) The Company shall have furnished to the Underwriters the opinion
of a General Counsel, or an Assistant General Counsel, of the Company,
dated the Closing Date, to the effect that:
(i) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the Commonwealth of
Virginia, with corporate power and authority to own, lease and operate
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 it owns or leases substantial properties or in which the conduct
of its business requires such qualification except where the failure
to so qualify or be in good standing would not have a material adverse
effect on the Company and its subsidiaries, considered as one
enterprise;
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(ii) Each significant subsidiary as defined in Rule 405 of
Regulation C of the Securities Act (each a "Significant Subsidiary")
of the Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease and
operate its properties and conduct its business as described in the
Prospectus; and, to the best of such counsel's knowledge, is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required,
except where the failure to so qualify or be in good standing would
not have a material adverse effect on the Company and its
subsidiaries, considered as one enterprise; all of the issued and
outstanding capital stock of each Significant Subsidiary has been duly
authorized and validly issued, is fully paid and nonassessable, and,
except for directors' qualifying shares, if any, is owned by the
Company free and clear of any mortgage, pledge, lien, encumbrance,
claim or equity;
(iii) No consent, approval, authorization or order of, or filing
with, any governmental agency or body or any court is required for the
consummation of the transactions contemplated herein, except such as
may be required under state securities laws;
(iv) The execution, delivery and performance of this Agreement
and the issuance and sale of the Securities and compliance with the
terms and provisions thereof will not result in a material breach or
violation of any of the terms and provisions of, or constitute a
default under, any statute, rule, regulation or order of any
governmental agency or body or any court having jurisdiction over the
Company or any Significant Subsidiary or any of their properties or,
to the best of such counsel's knowledge, any agreement or instrument
to which the Company or any of its Significant Subsidiaries is a party
or by which the Company or any Significant Subsidiary is bound or to
which any of the properties of the Company or any Significant
Subsidiary is subject, or the charter or by-laws of the Company or any
Significant Subsidiary, and the Company has full power and authority
to authorize, issue and sell the Securities as contemplated by this
Agreement; and
(v) Each document filed pursuant to the Exchange Act and
incorporated by reference in the Prospectus complied when filed as to
form in all material respects with the Exchange Act and the rules and
regulations promulgated thereunder.
In addition, such counsel shall state that he or she has participated
in conferences with officers and other representatives of the Company,
representatives of Ernst & Young LLP, independent auditors for the Company,
and the Representative, at which the contents of the Prospectus and any
amendment thereof or supplement thereto and related matters were discussed
and although such counsel has not undertaken to investigate or verify
independently, and does not assume any responsibility for the accuracy,
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completeness or fairness of the statements contained in the Prospectus or
any amendment thereof or supplement thereto, no facts have come to the
attention of such counsel which would lead such counsel to believe that the
Prospectus (other than the historical, pro forma, projected or other
financial statements, information and data and statistical information and
data included or incorporated by reference therein, in each case as to
which no opinion need be given) at the Closing Date includes any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. Except as otherwise set forth
herein, all references in this Section 6(a) to the Prospectus shall be
deemed to include any amendment or supplement thereto at the Closing Date.
(b) The Company shall have furnished to the Underwriters the opinion
of McGuire, Woods, Battle & Xxxxxx LLP, counsel for the Company, dated the
Closing Date, to the effect that:
(i) The Indenture has been duly authorized, executed and
delivered by the Company; the Securities have been duly authorized,
executed, issued and delivered by the Company; the Securities, when
authenticated in the manner provided in the Indenture, constitute
valid and legally binding obligations of the Company enforceable
against the Company in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles (in
rendering such opinion, such counsel may assume that the Indenture has
been duly authorized, executed and delivered, and the Securities have
been duly authenticated, by the Trustee); and the Securities conform
to the description thereof contained in the Prospectus;
(ii) This Agreement has been duly authorized, executed and
delivered by the Company;
(iii) The Indenture is qualified under the TIA;
(iv) The Registration Statement is effective under the
Securities Act and, to the best of such counsel's knowledge, no stop
order suspending the effectiveness of the Registration Statement has
been issued under the Securities Act nor proceedings therefor
initiated or threatened by the Commission;
(v) At the time the Registration Statement became effective,
the Registration Statement (other than the historical, pro forma,
projected or other financial statements, information and data and
statistical information and data included or incorporated by reference
therein or omitted therefrom and Form T-1, in each case as to which no
opinion need be rendered) complied as to form in all material respects
with the requirements of the Securities Act and the Securities Act
Regulations;
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(vi) The Company is not an "investment company" within the
meaning of the Investment Company Act without taking account of any
exemption arising out of the number of holders of the Company's
securities;
(vii) The statements in the Prospectus under the captions
"Description of Debt Securities" and "Description of Notes", insofar
as they purport to summarize certain provisions of the Securities, are
accurate summaries of such provisions; and
(viii) The information contained in the Prospectus under the
caption "United States Taxation", to the extent that it constitutes
matters of law or legal conclusions, has been reviewed by such counsel
and is correct in all material respects.
In addition, subject to such counsel's customary qualifications about
the scope of its obligations in connection with its participation in the
preparation of documents, such counsel shall state that they have
participated in conferences with officers and other representatives of the
Company, representatives of Ernst & Young LLP, independent auditors for the
Company, the Representative, and Counsel for the Underwriters at which the
contents of the Prospectus and any amendment thereof or supplement thereto
and related matters were discussed and although such counsel have not
undertaken to investigate or verify independently, and do not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Prospectus or any amendment thereof or supplement thereto,
and did not participate in the preparation of the documents incorporated by
reference in the Prospectus, no facts have come to the attention of such
counsel which would lead such counsel to believe that the Prospectus at the
Closing Date (other than the historical, proforma, projected or other
financial statements, information and data and statistical information and
data included or incorporated by reference therein, in each case as to
which no opinion need be given) includes any untrue statement of a material
fact or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
In rendering such opinion, McGuire, Woods, Battle & Xxxxxx LLP may
rely (A) as to matters governed by New York law upon the opinion of Counsel
for the Underwriters, referred to below and (B) as to matters of fact, to
the extent they deem proper, on certificates of responsible officers of the
Company and public officials. Except as otherwise set forth herein, all
references in this Section 6(b) to the Prospectus shall be deemed to
include any amendment or supplement thereto at the Closing Date.
(c) The Representative shall have received from Counsel for the
Underwriters such opinion or opinions, dated the Closing Date, with respect
to the issuance and sale of the Securities, the Prospectus (as amended or
supplemented at the Closing Date) and other related matters as they may
require, and the Company shall have furnished to such
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counsel such documents as they may reasonably request for the purpose of
enabling them to pass upon such matters. In rendering such opinion,
Counsel for the Underwriters may rely as to the incorporation of the
Company on the opinion of the General Counsel or Assistant General Counsel
of the Company and as to all other matters governed by Virginia law upon
the opinion of McGuire, Woods, Battle & Xxxxxx LLP, referred to above.
(d) The Company shall have furnished to the Representative a
certificate of the Company, signed by the Chairman of the Board or the
President or an Executive Vice President or the Managing Director-Corporate
Finance and another person who is the principal financial or accounting
officer of the Company, or, in their absence, other proper officers of the
Company satisfactory to the Representative, dated the Closing Date, to the
effect that the signers of such certificate have examined the Prospectus,
any amendment or supplement to the Prospectus and this Agreement and that,
to the best of their knowledge after reasonable investigation:
(i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects on and as of
the Closing Date with the same effect as if made on and as of such
date, and the Company has complied with all the agreements and
satisfied all the conditions on its part to be performed or satisfied
hereunder at or prior to the Closing Date; and
(ii) since the date of the most recent financial statements
incorporated by reference in the Prospectus, there has been no
material adverse change in the condition (financial or other),
earnings, business or properties of the Company and its subsidiaries,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated by the Prospectus
(exclusive of any amendment or supplement thereto) or as described in
such certificate.
(e) On the Closing Date, Ernst & Young LLP shall have furnished to
the Representative a letter, dated as of the Closing Date, in form and
substance satisfactory to the Representative, confirming that they are
independent accountants within the meaning of the Securities Act and the
Securities Act Regulations and containing statements and information of the
type ordinarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial information
contained in the Prospectus.
(f) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Prospectus, there shall not have been (i)
any change or decrease specified in the letter referred to in paragraph (e)
of this Section 6 or (ii) any change, or any development involving a
prospective change, in or affecting the business or properties of the
Company and its subsidiaries the effect of which, in any case referred to
in clause (i) or (ii) above, is, in the reasonable judgment of the
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Representative, so material and adverse as to make it impractical or
inadvisable to market the Securities as contemplated by the Prospectus
(exclusive of any amendment or supplement thereof or thereto).
(g) Subsequent to the Execution Time, there shall not have been any
decrease in the rating of any of the Company's debt securities by any
"nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Securities Act) or any notice given of
any intended or potential decrease in any such rating or of a possible
change in any such rating that does not indicate the direction of the
possible change.
Prior to the Closing Date, the Company shall furnish to the
Representative such conformed copies of such opinions, certificates, letters and
documents as the Representative may reasonably request.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Representative and Counsel for the Underwriters, this
Agreement and all obligations of the Underwriters hereunder with respect to the
Securities may be canceled at, or at any time prior to, the Closing Date by the
Representative. Notice of such cancellation shall be given to the Company in
writing or by telephone or telefax confirmed in writing.
The documents required to be delivered by this Section 6 will be
delivered at the office of Counsel for the Underwriters, at 000 Xxxxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx, xx the Closing Date.
7. Reimbursement of Expenses. If the sale of the Securities
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provided for herein is not consummated because of cancellation by the
Representative pursuant to Section 6 hereof, because of any termination pursuant
to Section 10 hereof or because of any refusal, inability or failure on the part
of the Company to perform any material agreement herein or comply with any
material provision hereof other than by reason of a default by any of the
Underwriters in payment for the Securities on the Closing Date, the Company will
reimburse the Underwriters severally upon demand for all reasonable out-of-
pocket expenses (including reasonable fees and disbursements of Counsel for the
Underwriters) that shall have been incurred by them in connection with the
proposed purchase and sale of the Securities.
8. Indemnification and Contribution. (a) The Company agrees to
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indemnify and hold harmless each Underwriter, the directors, officers, employees
and agents of each Underwriter and each person who controls any Underwriter
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act against any and all losses, claims, damages or liabilities,
joint or several, to which they or any of them may become subject under the
Securities Act, the Exchange Act or other federal or state statutory law or
regulation, at
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common law or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Prospectus, or in any amendment thereof or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
and agrees to reimburse each such indemnified party for any 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 in any such
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case to the extent that any such loss, claim, damage or liability arises out of
or is based upon any such untrue statement or alleged untrue statement or
omission or alleged omission made in the Prospectus, or in any amendment thereof
or supplement thereto, in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Underwriters through
the Representative specifically for inclusion therein.
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company, its directors, its officers, and each person 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 each Underwriter, but only with respect to claims and actions based
upon written information relating to such Underwriter furnished to the Company
by or on behalf of such Underwriter through the Representative specifically for
inclusion in the Prospectus (or in any amendment or supplement thereto). This
indemnity agreement will be in addition to any liability which any Underwriter
may otherwise have. The Company acknowledges that the statements set forth in
the first sentence of the last paragraph of the cover page, the last paragraph
of text on page S-2, and the third paragraph, the second sentence of the fourth
paragraph and the last paragraph of text under the heading "Underwriting" in the
Prospectus Supplement constitute the only information furnished in writing by or
on behalf of the Underwriters for inclusion in the Prospectus (or in any
amendment or supplement thereto).
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in which
case the indemnifying party shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the indemnified party or parties
except as set forth below); provided, however, that such counsel shall be
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reasonably satisfactory to the indemnified party.
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Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel), however, the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel only if (i) the use of counsel chosen by the indemnifying party
to represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded upon advice of counsel that
there may be legal defenses available to it and/or other indemnified parties
which are different from or additional to those available to the indemnifying
party, (iii) the indemnifying party shall not have employed counsel reasonably
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of the institution of such action or (iv) the
indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. An indemnifying party will
not, without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding. An indemnifying party shall not be liable under this
Section 8 to any indemnified party regarding any settlement or compromise or
consent to the entry of any judgment with respect to any pending or threatened
claim, action, suit or proceeding in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified parties are
actual or potential parties to such claim or action) unless such settlement,
compromise, or consent is consented to by such indemnifying party, which consent
shall not be unreasonably withheld.
(d) If the indemnity provided in paragraph (a) or (b) of this Section
8 is unavailable to or insufficient to hold harmless an indemnified party for
any reason, the Company and the Underwriters agree to contribute to the
aggregate losses, claims, damages and liabilities (including legal or other
expenses reasonably incurred in connection with investigating or defending same)
(collectively "Losses") to which the Company and one or more of the Underwriters
may be subject in such proportion as is appropriate to reflect the relative
benefits received by the Company and by the Underwriters from the offering of
the Securities; provided, however, that in no case shall any Underwriter (except
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as may be provided in any agreement among the Underwriters relating to the
offering of the Securities) be responsible for any amount in excess of the
purchase discount or commission applicable to the Securities purchased by such
Underwriter hereunder, in each case as set forth on the cover page of the
Prospectus. If the allocation provided by the immediately preceding sentence is
unavailable for any reason, the Company and the Underwriters shall contribute in
such proportion as is appropriate to reflect not only such relative benefits but
also the relative fault of the Company and of the Underwriters in connection
with the statements or omissions which resulted in such Losses as well as any
other relevant equitable considerations. Benefits received by the Company shall
be deemed to be equal to the total net proceeds from the offering (before
deducting expenses), and benefits received by the Underwriters shall be deemed
to be equal to the total purchase discounts and
12
commissions received by the Underwriters from the Company in connection with the
purchase of the Securities hereunder, in each case as set forth on the cover
page of the Prospectus. Relative fault shall be determined by reference to
whether any alleged untrue statement or omission relates to information provided
by the Company or the Underwriters, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The Company and the Underwriters agree that it
would not be just and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this paragraph (d), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute as provided in
this Section 8(d) are several in proportion to their respective purchase
obligations and not joint. For purposes of this Section 8, each person who
controls an Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act and each director, officer,
employee and agent of an Underwriter shall have the same rights to contribution
as such Underwriter, and each person who controls the Company within the meaning
of either Section 15 of the Securities Act or Section 20 of the Exchange Act and
each officer and director of the Company shall have the same rights to
contribution as the Company, subject in each case to the applicable terms and
conditions of this paragraph (d).
9. Default by an Underwriter. If any one or more Underwriters shall
-------------------------
fail to purchase and pay for any of the Securities agreed to be purchased by
such Underwriter hereunder and such failure to purchase shall constitute a
default in the performance of its or their obligations under this Agreement, the
remaining Underwriters shall be obligated severally to take up and pay for (in
the respective proportions which the principal amount of Securities set forth
opposite their names in Schedule I hereto bears to the aggregate principal
amount of Securities set forth opposite the names of all the remaining
Underwriters) the Securities which the defaulting Underwriter or Underwriters
agreed but failed to purchase; provided, however, that if the aggregate
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principal amount of Securities which the defaulting Underwriter or Underwriters
agreed but failed to purchase shall exceed 10% of the aggregate principal amount
of Securities set forth in Schedule I hereto, the remaining Underwriters shall
have the right to purchase all, but shall not be under any obligation to
purchase any, of the Securities, and if such non-defaulting Underwriters do not
purchase all the Securities within 36 hours of such default, this Agreement will
terminate without liability to any non-defaulting Underwriter or the Company
except as otherwise provided in Section 11. In the event of a default by any
Underwriter as set forth in this Section 9, the Closing Date shall be postponed
for such period, not exceeding seven days, as the Representative shall determine
in order that the required changes in the Prospectus or in any other documents
or arrangements may be effected. Nothing contained in this Agreement shall
relieve any defaulting Underwriter of its liability, if any, to the Company or
to any non-defaulting Underwriter for damages occasioned by its default
hereunder.
10. Termination. This Agreement shall be subject to termination in
-----------
the absolute discretion of the Representative, by notice given to the Company
prior to delivery of
13
and payment for the applicable Securities, if prior to such time (i) there shall
have occurred any change, or any development involving a prospective change, in
or affecting particularly the business or properties of the Company or its
subsidiaries which, in the judgment of the Representative, materially impairs
the investment quality of the Securities, (ii) any downgrading in the rating of
any debt securities of the Company by any "nationally recognized statistical
rating organization" (as defined for purposes of Rule 436(g) under the
Securities Act), or any public announcement that any such organization has under
surveillance or review its rating of any debt securities of the Company (other
than an announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating), (iii) trading in any of
the Company's securities shall have been suspended by the Commission or the New
York Stock Exchange or trading in securities generally on the New York Stock
Exchange shall have been suspended or materially limited or minimum prices shall
have been established on such exchange, (iv) a banking moratorium shall have
been declared either by federal or New York State authorities or (v) there shall
have occurred any outbreak or escalation of hostilities, declaration by the
United States of a national emergency or war or other calamity or crisis the
effect of which on financial markets is such as to make it, in the reasonable
judgment of the Representative, impracticable or inadvisable to proceed with the
offering or delivery of the Securities as contemplated by the Prospectus
(exclusive of any amendment or supplement thereof or thereto).
11. Representations and Indemnities to Survive. The respective
------------------------------------------
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of the Underwriters set forth in or made pursuant to
this Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of the Underwriters or the Company or any of
the officers, directors or controlling persons referred to in Section 8 hereof,
and will survive delivery of and payment for the Securities. The provisions of
Sections 7 and 8 hereof shall survive the termination or cancellation of this
Agreement.
12. Fees, Expenses. The Company covenants and agrees with the
--------------
Representative that the Company will pay or cause to be paid the following: (i)
the fees, disbursements and expenses of the Company's counsel and accountants in
connection with the issue of the Securities and all other expenses in connection
with the preparation and printing of the Prospectus and any amendments and
supplements thereto and the mailing and delivering of copies thereof to the
Underwriters; (ii) the cost of printing or other production of all documents
relating to the offering, purchase, sale and delivery of the Securities as
provided in Section 4(a); (iii) any fees charged by securities rating services
for rating the Securities; (iv) the cost of preparing the Securities; (v) the
fees and expenses of the Trustee and any agent of the Trustee and the fees and
disbursements of counsel for the Trustee in connection with the Indenture and
the Securities; (vi) any fees charged by DTC; and (vii) all other costs and
expenses incident to the performance of its obligations hereunder which are not
otherwise specifically provided for in this Section 12. It is understood,
however, that except as provided in Sections 7 and 12 hereof, the Underwriters
will pay all of their own costs and expenses, including the fees, disbursements
and expenses of their counsel and any marketing expenses connected with any
offers they may make.
14
13. Notices. All communications hereunder will be in writing and
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effective only on receipt, and, if sent to the Representative, will be mailed,
delivered or telefaxed and confirmed to them, care of Xxxxxxx Xxxxx Xxxxxx Inc.,
at Seven Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, facsimile (212) 783-
2274; or, if sent to the Company, will be mailed, delivered or telefaxed and
confirmed to it at One Xxxxx Center, 000 Xxxx Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx
00000, attention: Xxxxx X. Xxxx, Managing Director-Corporate Finance, telefax
number (000) 000-0000.
14. Successors. This Agreement will inure to the benefit of and be
----------
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 8 hereof, and,
except as expressly set forth in Section 5(h) hereof, no other person will have
any right or obligation hereunder.
15. Applicable Law. This Agreement will be governed by and construed
--------------
in accordance with the laws of the State of New York.
16. Business Day. For purposes of this Agreement, "business day"
------------
means each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on
which banking institutions in The City of New York, New York are authorized or
obligated by law, executive order or regulation to close.
17. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which will be deemed to be an original, but all such
counterparts will together constitute one and the same instrument.
18. Headings. The section headings are for convenience only and
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shall not affect the construction hereof.
15
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this Agreement and your acceptance shall represent a binding agreement between
the Company and the Underwriters.
Very truly yours,
CSX CORPORATION
By /s/ Xxxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President and Treasurer
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
XXXXXXX XXXXX XXXXXX INC.
By: /s/ Xxxx Xxxxxx
--------------------------------
Name: Xxxx Xxxxxx
Title: Director, Investment Banking
For themselves and the other
Underwriters named in
Schedule I to the foregoing Agreement
SCHEDULE I
Principal Amount of
Securities
Underwriters to be Purchased
------------ ---------------
Xxxxxxx Xxxxx Barney Inc........... $280,000,000
Xxxxxx Xxxxxxx & Co. Incorporated.. 120,000,000
------------
Total............... $400,000,000
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