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ENRON CORP.
(A DELAWARE CORPORATION)
ENRON PREFERRED FUNDING, L.P.
(A DELAWARE LIMITED PARTNERSHIP)
ENRON CAPITAL TRUST I
(A DELAWARE BUSINESS TRUST)
8,000,000 TRUST PREFERRED SECURITIES
____% TRUST ORIGINATED PREFERRED SECURITIES(SM) ("TOPRS")(SM)
PURCHASE AGREEMENT
DATED: NOVEMBER __, 1996
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(SM) "Trust Originated Preferred Securities" and "TOPrS" are service marks of
Xxxxxxx Xxxxx & Co., Inc.
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TABLE OF CONTENTS
SECTION 1. Representations and Warranties . . . . . . . . . . . . . . . . 4
(a) Representations and Warranties by the Company . . . . . . . . 4
(i) Compliance with Registration Requirements . . . . . . . 4
(ii) Incorporated Documents . . . . . . . . . . . . . . . . 5
(iii) Independent Accountants . . . . . . . . . . . . . . . . 5
(iv) Good Standing of the Company and Subsidiaries . . . . . 5
(v) Authorization of Agreement . . . . . . . . . . . . . . 6
(vi) Authorization of the Debentures and Indentures . . . . 6
(vii) Authorization of Investment Guarantees . . . . . . . . 6
(viii) Absence of Defaults and Conflicts; Absence of Further
Requirements . . . . . . . . . . . . . . . . . . . . . 6
(ix) Material Adverse Change . . . . . . . . . . . . . . . . 7
(x) Investment Company Act . . . . . . . . . . . . . . . . 7
(xi) PUCHA . . . . . . . . . . . . . . . . . . . . . . . . . 7
(xii) Absence of Proceedings . . . . . . . . . . . . . . . . 7
(b) Representations and Warranties by the Trust, the Partnership
and the Company . . . . . . . . . . . . . . . . . . . . . . . 8
(i) Good Standing of Trust . . . . . . . . . . . . . . . . 8
(ii) Authorization of Declaration . . . . . . . . . . . . . 8
(iii) Authorization of Trust Common Securities . . . . . . . 8
(iv) Authorization of Trust Preferred Securities . . . . . . 8
(v) Authorization of Trust Guarantee . . . . . . . . . . . 9
(vi) Regular Trustees . . . . . . . . . . . . . . . . . . . 9
(vii) Good Standing of the Partnership . . . . . . . . . . . 9
(viii) Authorization of Partnership Agreement . . . . . . . . 9
(ix) Authorization of Partnership Preferred Securities . . . 9
(x) Authorization of Partnership Guarantee . . . . . . . . 10
(xi) General Partner Status . . . . . . . . . . . . . . . . 10
(xii) Investment Company Act . . . . . . . . . . . . . . . . 10
(xiii) Absence of Conflicts . . . . . . . . . . . . . . . . . 10
(xiv) Absence of Further Requirements . . . . . . . . . . . . 10
(xv) Absence of Proceedings . . . . . . . . . . . . . . . . 11
SECTION 2. Sale and Delivery to Underwriters; Closing . . . . . . . . . . 11
(a) Securities . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(b) Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(c) Denominations; Registration . . . . . . . . . . . . . . . . . 12
SECTION 3. Covenants of the Offerors . . . . . . . . . . . . . . . . . . 12
(a) Compliance with Securities Regulations and Commission Requests 12
(b) Filing of Amendments . . . . . . . . . . . . . . . . . . . . . 13
(c) Delivery of Registration Statements . . . . . . . . . . . . . 13
(d) Delivery of Prospectuses . . . . . . . . . . . . . . . . . . . 13
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(e) Continued Compliance with Securities Laws . . . . . . . . . . 13
(f) Blue Sky Qualifications . . . . . . . . . . . . . . . . . . . 14
(g) Rule 158 . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(h) Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . 14
(i) Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(j) Restriction on Sale of Securities . . . . . . . . . . . . . . 15
(k) Reporting Requirements . . . . . . . . . . . . . . . . . . . . 15
SECTION 4. Payment of Expenses . . . . . . . . . . . . . . . . . . . . . 15
(a) Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(b) Termination of Agreement . . . . . . . . . . . . . . . . . . . 15
SECTION 5. Conditions of Underwriters' Obligations . . . . . . . . . . . 16
(a) Effectiveness of Registration Statement . . . . . . . . . . . 16
(b) Opinion of Counsel for Company . . . . . . . . . . . . . . . . 16
(c) Opinion of Counsel for Underwriters . . . . . . . . . . . . . 16
(d) Opinion of Counsel for the Property Trustee . . . . . . . . . 16
(e) Officers' Certificate . . . . . . . . . . . . . . . . . . . . 17
(f) Accountant's Comfort Letter . . . . . . . . . . . . . . . . . 17
(g) Bring-down Comfort Letter . . . . . . . . . . . . . . . . . . 17
(h) Maintenance of Rating . . . . . . . . . . . . . . . . . . . . 17
(i) Approval of Listing . . . . . . . . . . . . . . . . . . . . . 17
(j) Additional Documents . . . . . . . . . . . . . . . . . . . . . 17
(k) Termination of Agreement . . . . . . . . . . . . . . . . . . . 18
SECTION 6. Indemnification . . . . . . . . . . . . . . . . . . . . . . . 18
(a) Indemnification of Underwriters . . . . . . . . . . . . . . . 18
(b) Indemnification of Company, Directors and Officers . . . . . . 19
(c) Actions Against Parties; Notification . . . . . . . . . . . . 19
(d) Settlement Without Consent if Failure to Reimburse . . . . . . 20
SECTION 7. Contribution . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 8. Representations, Warranties and Agreements to Survive Delivery 22
SECTION 9. Termination of Agreement . . . . . . . . . . . . . . . . . . . 22
(a) Termination; General . . . . . . . . . . . . . . . . . . . . . 22
(b) Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 10. Default by One or More of the Underwriters . . . . . . . . . . 23
SECTION 11. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 12. Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 13. Governing Law and Time . . . . . . . . . . . . . . . . . . . . 24
SECTION 14. Effect of Headings . . . . . . . . . . . . . . . . . . . . . . 24
Schedule A
Schedule B
Exhibit A
Exhibit B
Exhibit C
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Enron Capital Trust I
(a Delaware business trust)
8,000,000 Trust Preferred Securities
___% Trust Originated Preferred Securities(SM) ("TOPrS")(SM)
(Liquidation Amount of $25 per Preferred Security)
guaranteed by Enron Corp.
PURCHASE AGREEMENT
November ___, 1996
Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxx Xxxxxx Xxxxxxxx Inc.
X.X. Xxxxxxx & Sons, Inc.
PaineWebber Incorporated
Xxxxxxxx Xxxxxx Refsnes, Inc.
Xxxxx Xxxxxx Inc.
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Enron Capital Trust I (the "Trust"), a statutory business trust
organized under the Business Trust Act (the "Delaware Trust Act") of the State
of Delaware (Chapter 38, Title 12, of the Delaware Code, 12 Del. C. Sections
3801 et seq.), Enron Preferred Funding, L.P. (the "Partnership"), a limited
partnership organized under the Revised Uniform Limited Partnership Act (the
"Delaware Limited Partnership Act") of the State of Delaware (Chapter 17, Title
6, of the Delaware Code, 6 Del. C. Sections 17-101 et seq.), and Enron Corp.,
a Delaware corporation (the "Company" and, together with the Trust and the
Partnership, the "Offerors"), confirm their agreement (the "Agreement") with
Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
(together, "Xxxxxxx Xxxxx"), Xxxx Xxxxxx Xxxxxxxx Inc., X.X. Xxxxxxx & Sons,
Inc., PaineWebber Incorporated, Xxxxxxxx Xxxxxx Refsnes, Inc., Xxxxx Xxxxxx
Inc. and each of the other Underwriters named in Schedule A hereto
(collectively, the "Underwriters," which term shall also
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(SM) "Trust Originated Preferred Securities" and "TOPrS" are service
marks of Xxxxxxx Xxxxx & Co., Inc.
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include any underwriter substituted as hereinafter provided in Section 10
hereof), for whom Xxxxxxx Xxxxx is acting as representative (in such capacity,
hereinafter referred to as the "Representative"), with respect to the sale by
the Trust and the purchase by the Underwriters, acting severally and not
jointly, of the respective numbers of ____% Trust Originated Preferred
Securities (liquidation amount of $25 per preferred security) representing
preferred undivided beneficial ownership interests in the assets of the Trust
("TOPrS" or the "Trust Preferred Securities") set forth in Schedule A. The
Company will own all the common securities (the "Trust Common Securities" and,
together with the Trust Partnership Securities, the "Trust Securities"),
representing undivided beneficial ownership interests in the assets of the
Trust. The Trust Preferred Securities and the Trust Common Securities will be
issued pursuant to the amended and restated declaration of trust (the
"Declaration") of the Trust, dated as of November ___, 1996, among the Company,
_______________________, ________________________, and _______________________
, as regular trustees (the "Regular Trustees"), The Chase Manhattan Bank, as
institutional trustee (the "Property Trustee"), and Chase National Bank
Delaware, a Delaware corporation, as Delaware trustee (the "Delaware Trustee"
and, together with the Regular Trustees and the Property Trustee, the "Issuer
Trustees"), and the holders from time to time of undivided beneficial interests
in the assets of the Trust. The Trust Preferred Securities will be guaranteed
by the Company, to the extent set forth in the Prospectus (as defined herein)
with respect to distributions and payments upon liquidation, redemption and
otherwise pursuant to the Trust Preferred Securities Guarantee Agreement (the
"Trust Guarantee"), dated as of November ___, 1996, between the Company and The
Chase Manhattan Bank, as trustee (the "Guarantee Trustee").
The proceeds from the sale of the Trust Securities will be used by the
Trust to purchase partnership preferred securities ("Partnership Preferred
Securities"), representing all of the limited partnership interests of the
Partnership. All of the general partnership interests will be owned by the
Company, which shall be sole general partner (in such capacity, the "General
Partner"). The Partnership Preferred Securities will be issued pursuant to an
amended and restated agreement of limited partnership, dated as of November
___, 1996 (the "Partnership Agreement"), among the Company, as general partner,
and Organizational Partner, Inc., as initial limited partner, and such other
persons who become limited partners thereto, and will be guaranteed by the
Company, to the extent set forth in the Prospectus, with respect to
distributions and payments upon liquidation and redemption pursuant to the
Partnership Guarantee Agreement (the "Partnership Guarantee" and, together with
the Trust Guarantee, the "Guarantees"). The Trust Preferred Securities and the
related Trust Guarantee, together with the Partnership
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Preferred Securities and the related Partnership Guarantee, are referred to
herein as the "Offered Securities."
The Partnership will use the proceeds from the sale of the Partnership
Preferred Securities and the capital contribution of the General Partner to
acquire, among other things, (i) a subordinated debenture of the Company, (ii)
senior debentures of certain subsidiaries the Company (together with the
Company, the "Investment Affiliates"). The debentures to be issued
(collectively, the "Subsidiary Debentures") by the subsidiaries (collectively,
the "Investment Subsidiaries") are to be fully and unconditionally guaranteed
by the Company (the "Investment Guarantees"). Each of the debentures (the
"Debentures") shall be issued pursuant to an indenture (each an "Indenture"),
to be dated as of November ___, 1996, among the applicable Investment
Affiliate, The Chase National Bank, as trustee (the "Debt Trustee"), and in the
case of the Debentures issued by subsidiaries of the Company, the Company, as
guarantor (the "Debenture Guarantor").
The Offerors have filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (Nos. 333-14967, 14967-01,
14967-02) to register under the Securities Act of 1933, as amended (the "1933
Act"), the offer and sale of (i) the Trust Preferred Securities, (ii) the Trust
Guarantee, (iii) the Partnership Preferred Securities, (iv) the Partnership
Guarantee, (v) the Debentures of the Company and (vi) the Investment
Guarantees.
The Offerors understand that the Underwriters propose to make a public
offering of the Offered Securities as soon as the Representative deems
advisable after this Agreement has been executed and delivered and the
Declaration, Trust Guarantee Agreement, Investment Guarantees and the Company
Debenture have been qualified under the Trust Indenture Act of 1939, as amended
(the "1939 Act").
Promptly after execution and delivery of this Agreement, the Offerors
will either (i) prepare and file a prospectus in accordance with the provisions
of Rule 430A ("Rule 430A") of the rules and regulations of the Commission under
the 1933 Act (the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule
424(b)") of the 1933 Act Regulations or (ii) if the Company has elected to rely
upon Rule 434 ("Rule 434") of the 1933 Act Regulations, prepare and file a term
sheet (a "Term Sheet") in accordance with the provisions of Rule 434 and Rule
424(b). The information included in such prospectus or in such Term Sheet, as
the case may be, that was omitted from such registration statement at the time
it became effective, but that is deemed to be part of such registration
statement at the time it became effective
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pursuant to paragraph (b) of Rule 430A is referred to as "Rule 430A
Information" or pursuant to paragraph (d) of Rule 434 is referred to as "Rule
434 Information." Each prospectus used before such registration statement
became effective, and any prospectus that omitted, as applicable, the Rule 430A
Information or the Rule 434 Information, that was used after such effectiveness
and prior to the execution and delivery of this Agreement, is herein called a
"preliminary prospectus." Such registration statement, including the exhibits
thereto, schedules thereto, if any, and the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 under the 1933 Act, at the time it
became effective and including the Rule 430A Information and the Rule 434
Information, as applicable, is herein called the "Registration Statement." Any
registration statement filed pursuant to Rule 462(b) of the 1933 Act
Regulations is herein referred to as the "Rule 462(b) Registration Statement,"
and after such filing the term "Registration Statement" shall include the Rule
462(b) Registration Statement. The final prospectus, including the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the
1933 Act, in the form first furnished to the Underwriters for use in connection
with the offering of the Offered Securities, is herein called the "Prospectus."
If Rule 434 is relied on, the term "Prospectus" shall refer to the preliminary
prospectus dated November ___, 1996 together with the Term Sheet, and all
references in this Agreement to the date of the Prospectus shall mean the date
of the Term Sheet. For purposes of this Agreement, all references to the
Registration Statement, any preliminary prospectus, the Prospectus or any Term
Sheet or any amendment or supplement to any of the foregoing shall be deemed to
include the copy filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval system ("XXXXX").
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to mean and include the filing of
any document under the Securities Exchange Act of 1934 (the "1934 Act") which
is incorporated by reference in the Registration Statement, such preliminary
prospectus or the Prospectus, as the case may be.
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SECTION 1. REPRESENTATIONS AND WARRANTIES
(a) Representations and Warranties by the Company. The Company
represents and warrants to each Underwriter as of the date hereof, and as of
the Closing Time referred to in Section 2(b) hereof, as follows:
(i) Compliance with Registration Requirements. The
Registration Statement has been filed on an appropriate form under the 1933
Act. Each of the Registration Statement and any Rule 462(b) Registration
Statement has become effective under the 1933 Act and no stop order suspending
the effectiveness of the Registration Statement or any Rule 462(b) Registration
Statement has been issued under the 1933 Act and no proceedings for that
purpose have been instituted or are pending or, to the knowledge of the
Company, are contemplated by the Commission, and any request on the part of the
Commission for additional information has been complied with.
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments thereto became
effective and at the Closing Time, the Registration Statement, the Rule 462(b)
Registration Statement and any amendments and supplements thereto complied and
will comply in all material respects with the applicable requirements of the
1933 Act and the 1933 Act Regulations and the 1939 Act and the rules and
regulations of the Commission under the 1939 Act (the "1939 Act Regulations"),
and did not and will not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading. Neither the Prospectus nor any amendments
or supplements thereto, at the time the Prospectus or any such amendment or
supplement was issued and at the Closing Time, included or will include an
untrue statement of a material fact or omitted or will 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. If Rule 434 is used,
the Offerors will comply with the requirements of Rule 434. The
representations and warranties in this subsection shall not apply 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
any Underwriter through Xxxxxxx Xxxxx expressly for use in the Registration
Statement or Prospectus.
Each preliminary prospectus and the prospectus filed as part of
the Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when so
filed in all material respects with the 1933 Act Regulations and each
preliminary prospectus and the Prospectus delivered to the Underwriters for use
in connection with this offering was identical to the electronically
transmitted
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copies thereof filed with the Commission pursuant to XXXXX, except to the
extent permitted by Regulation S-T.
(ii) Incorporated Documents. The documents incorporated or
deemed to be incorporated by reference in the Registration Statement and the
Prospectus, at the time they were or hereafter are filed with the Commission,
complied and will comply in all material respects with the requirements of the
1934 Act and the rules and regulations of the Commission thereunder (the "1934
Act Regulations"), and, when read together with the other information in the
Prospectus, at the time the Registration Statement became effective, at the
time the Prospectus was issued and at the Closing Time, did not and will not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading.
(iii) Independent Accountants. The accountants who certified
the financial statements included in the Registration Statement are independent
public accountants as required by the 1933 Act and the 1933 Act Regulations.
(iv) Good Standing of the Company and Subsidiaries. Each of
the Company and each of its subsidiaries listed on Exhibit A hereto has been
duly incorporated, is validly existing and in good standing under the laws of
its respective jurisdiction of incorporation, is duly qualified to do business
and in good standing as a foreign corporation in each jurisdiction in which its
respective ownership of properties or the conduct of its respective businesses
requires such qualification (except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse effect on
the Company and its subsidiaries taken as a whole), and has the power and
authority necessary to own or hold its respective properties and to conduct the
businesses in which it is engaged, as described in the Prospectus.
(v) Authorization of Agreement. This Agreement has been duly
authorized, executed and delivered by the Offerors.
(vi) Authorization of the Debentures and Indentures. At the
Closing Time, each Indenture will have been duly authorized, executed and
delivered by the applicable Investment Affiliate and, in the case of the
Subsidiary Debentures, the Debenture Guarantor and, when duly executed and
delivered by the Debt Trustee, will constitute a valid and binding agreement of
such Investment Affiliate and, in the case of the Subsidiary Debentures, the
Debenture Guarantor, enforceable against such Investment Affiliate and, in the
case of the Subsidiary Debentures, the Debenture Guarantor, in accordance with
its terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency (including,
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without limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting enforcement of creditors' rights generally
and except as enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or
at law) (the "Bankruptcy Exceptions"). The Indenture of the Company has duly
qualified under the 1939 Act. The Debentures have been duly authorized and, at
the Closing Time, will have been duly executed by the applicable Investment
Affiliate and, when authenticated, issued and delivered in the manner provided
for in the applicable Indenture and delivered against payment of the purchase
price therefor as provided in this Agreement, will constitute valid and binding
obligations of such Investment Affiliate, enforceable against such Investment
Affiliate in accordance with their terms, except as the enforcement thereof may
be limited by the Bankruptcy Exceptions.
(vii) Authorization of Investment Guarantees. The Investment
Guarantees have been duly authorized and, at the Closing Time, will have been
duly executed and delivered by the Debenture Guarantor, and, when authenticated
in the manner provided in the Investment Guarantee, will constitute a valid and
binding obligation of the Debenture Guarantor, enforceable against the
Debenture Guarantor in accordance with its terms, except to the extent that
enforcement thereof may be limited by the Bankruptcy Exceptions.
(viii) Absence of Defaults and Conflicts; Absence of Further
Requirements. The execution, delivery and performance of this Agreement, the
Declaration, the Partnership Agreement, the Trust Guarantee, the Partnership
Guarantee, the Debentures and the Indentures (collectively, the "Transaction
Documents") by the Company and the execution, delivery and performance of the
Debentures and the Indentures by the applicable Investment Affiliate and the
consummation of the transactions contemplated hereby and thereby will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company or
any of its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the Company
or any of its subsidiaries is subject, nor will such actions result in any
violation of the provisions of the charter or bylaws of the Company or any of
its subsidiaries or any statute or any order, rule or regulation of any court
or governmental agency or body having jurisdiction over the Company or any of
its subsidiaries or any of their properties of assets, the effect of which
breach, violation or default would be material to the Company and its
subsidiaries taken as a whole; and except such as have been obtained or
required under the 1933 Act or the 1933
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Act Regulations, 1934 Act or the 1934 Act Regulations or state securities laws
and the qualification of the Declaration, the Trust Preferred Guarantee
Agreement, the Investment Guarantees and the Indentures under the 1939 Act, no
consent, approval, authorization or order of, or filing or registration with,
any such court or governmental agency or body is required in connection with
the offering, issuance, and sale of the Offered Securities, the Debentures and
Investment Guarantees or, the consummation of the transactions contemplated by
this Agreement or the execution, delivery and performance by the Company and,
where applicable, the Investment Subsidiaries of the Transaction Documents.
(ix) Material Adverse Change. Since the respective dates as of
which information is given in the Registration Statement and the Prospectus,
except as otherwise stated therein, there has been no material adverse change
in the condition, financial or otherwise, or in the earnings or business
affairs or business prospects of the Company and its subsidiaries taken as a
whole, whether or not arising in the ordinary course of business.
(x) Investment Company Act. Each of the Company and the
Investment Subsidiaries is not, and after giving effect to the offering and
sale of the Trust Preferred Securities and the application of the net proceeds
therefrom as described in the Prospectus will not be, an "investment company"
as such term is defined in the Investment Company Act of 1940, as amended (the
"1940 Act").
(xi) PUCHA. Each of the Company and its subsidiaries is exempt
from any obligation, duty or liability imposed on it as a "holding company,"
"subsidiary company" of a "holding company" or an "affiliate" of a "subsidiary
company" or a "holding company," in each case as such term is defined in the
Public Utility Holding Company Act of 1935, as amended ("PUHCA").
(xii) Absence of Proceedings. Except as disclosed in the
Prospectus, there is no action, suit or proceeding before or by any government,
governmental instrumentality or court, domestic or foreign, now pending or, to
the knowledge of the Company, threatened against or affecting the Company or
any of its subsidiaries that is required to be disclosed in the Prospectus or
that would result in any material adverse change in the condition (financial or
otherwise), earnings or business affairs of the Company and its subsidiaries,
taken as a whole, or that could materially and adversely affect the properties
or assets of the Company or any of its subsidiaries, or that could adversely
affect the consummation of the transactions contemplated in this Agreement.
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(b) Representations and Warranties by the Trust, the Partnership and
the Company. The Offerors, jointly and severally, represent and warrant to
each Underwriter as of the date hereof, and as of the Closing Time referred to
in Section 2(b) herein, as follows:
(i) Good Standing of Trust. The Trust has been duly created
and is validly existing in good standing as a business trust under the Delaware
Trust Act with the power and authority to own property and to conduct its
business as described in the Registration Statement and Prospectus and to enter
into and perform its obligations under this Agreement, the Trust Preferred
Securities, the Trust Common Securities and the Declaration; the Trust is duly
qualified to transact business as a foreign business trust and is in good
standing in any other jurisdiction in which such qualification is necessary,
except to the extent that the failure to so qualify or be in good standing
would not have a material adverse effect on the Trust; the Trust is not a party
to or otherwise bound by any agreement other than those described in the
Prospectus; and the Trust is and will be treated as a consolidated subsidiary
of the Company pursuant to generally accepted accounting principles.
(ii) Authorization of Declaration. The Declaration has been
duly authorized by the Company and, at the Closing Time, will have been
executed and delivered by the Company, as Sponsor, and assuming due
authorization, execution and delivery of the Declaration by the Trustees, the
Declaration will, at the Closing Time, be a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except
to the extent that enforcement thereof may be limited by the Bankruptcy
Exceptions, and will conform in all material respects to all statements
relating thereto in the Prospectus; and at the Closing Time, the Declaration
will have been duly qualified under the 1939 Act.
(iii) Authorization of Trust Common Securities. The Trust
Common Securities have been duly authorized by the Declaration and, when issued
and delivered by the Trust to the Company against payment therefor as described
in the Registration Statement and Prospectus, will be validly issued and
(subject to the terms of the Declaration) fully paid undivided beneficial
interests in the assets of the Trust and will conform in all material respects
to all statements relating thereto contained in the Prospectus; the issuance of
the Trust Common Securities is not subject to preemptive or other similar
rights; and at the Closing Time all of the issued and outstanding Trust Common
Securities of the Trust will be directly owned by the Company free and clear of
any security interest, mortgage, pledge, lien, encumbrance, claim or equity.
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(iv) Authorization of Trust Preferred Securities. The Trust
Preferred Securities have been duly authorized by the Declaration and, when
issued and delivered against payment of the consideration set forth in this
Agreement, will be validly issued and (subject to the terms of the Declaration)
fully paid and non-assessable undivided beneficial interests in the Trust, will
be entitled to the benefits of the Declaration and will conform in all material
respects to all statements relating thereto contained in the Prospectus; the
issuance of the Trust Preferred Securities is not subject to preemptive or
other similar rights; and (subject to the terms of the Declaration) holders of
Trust Preferred Securities will be entitled to the same limitation of personal
liability under Delaware law as extended to stockholders of private
corporations for profit.
(v) Authorization of Trust Guarantee. The Trust Guarantee has
been duly authorized by the Company and, when validly executed and delivered by
the Company, and, assuming due authorization, execution and delivery of the
Trust Guarantee by the Guarantee Trustee, will constitute a valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms except to the extent that enforcement thereof may be limited by the
Bankruptcy Exceptions; the Trust Guarantee will conform in all material
respects to all statements relating thereto contained in the Prospectus; and
the Trust Guarantee, at the Closing Time, will have been duly qualified under
the 1939 Act.
(vi) Regular Trustees. Each of the Regular Trustees of the
Trust is an employee of the Company; at the Closing Time, the Declaration will
have been duly executed and delivered by the Regular Trustees and will be a
valid and binding obligation of each Regular Trustee, enforceable against such
Regular Trustee in accordance with its terms except to the extent that
enforcement thereof may be limited by the Bankruptcy Exceptions.
(vii) Good Standing of the Partnership. The Partnership has
been duly formed and is validly existing in good standing as a limited
partnership under the Delaware Limited Partnership Act with the power and
authority to own property and to conduct its business as described in the
Registration Statement and Prospectus and to enter into and perform its
obligations under this Agreement, the Partnership Preferred Securities and the
Partnership Agreement; the Partnership is duly qualified to transact business
as a foreign limited partnership and is in good standing in any other
jurisdiction in which such qualification is necessary, except to the extent
that the failure to so qualify or be in good standing would not have a material
adverse effect on the Partnership; the Partnership is not a party to or
otherwise bound by any agreement other than those described in the Prospectus;
and the Partnership
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is and will be treated as a consolidated subsidiary of the Company pursuant to
generally accepted accounting principles.
(viii) Authorization of Partnership Agreement. The Partnership
Agreement has been duly authorized by the Company as general partner and, on
the Closing Date, will have been duly executed and delivered by the Company,
and will be a valid and legally binding obligation of the Company, enforceable
against the Company in accordance with its terms, except to the extent that
enforcement thereof may be limited by the Bankruptcy Exceptions, and will
conform in all material respects to the description thereof in the Prospectus.
(ix) Authorization of Partnership Preferred Securities. The
Partnership Preferred Securities have been duly authorized by the Partnership
Agreement and, when issued and delivered pursuant to the Partnership Agreement
against payment of the consideration set forth therein, will be duly issued and
fully paid and not subject to assessment for additional capital contributions,
will be entitled to the benefits of the Partnership Agreement and will conform
to the description thereof in the Prospectus; the issuance of the Partnership
Preferred Securities is not subject to preemptive or other similar rights;
assuming that the holders of Partnership Preferred Securities in their
capacities as such do not participate in the control of the business of the
Company, the holders of the Partnership Preferred Securities, in their
capacities as such, will have no liability in excess of their obligations to
make payments provided for in the Limited Partnership Agreement (subject to the
obligation of a holder of Partnership Preferred Securities to repay any funds
distributed to it).
(x) Authorization of Partnership Guarantee. The Partnership
Guarantee has been duly authorized by the Company and, when validly executed
and delivered by the Company will constitute a valid and binding obligation of
the Company, enforceable against the Company in accordance with its terms,
except to the extent that enforcement thereof may be limited by the Bankruptcy
Exceptions.
(xi) General Partner Status. The Company is the sole general
partner of the Partnership.
(xii) Investment Company Act. Neither the Trust nor the
Partnership is and, after giving effect to the offering and sale of the Trust
Preferred Securities and the application of the proceeds thereof as described
in the Prospectus, neither will be an "investment company" under the 1940 Act.
(xiii) Absence of Conflicts. The Trust is not in violation of
the Declaration or its certificate of trust filed with
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the State of Delaware October 28, 1996 (the "Certificate of Trust"); the
Partnership is not in violation of the Partnership Agreement or the certificate
of limited partnership, filed October 28, 1996 (the "Certificate of
Partnership"); and the execution, delivery and performance of applicable
Transaction Documents by the Partnership and the Trust and the consummation of
the transactions contemplated herein and therein and compliance by the
Partnership and the Trust with their respective obligations hereunder and
thereunder have been duly authorized by all necessary action on the part of the
Partnership and the Trust and do not and will not result in any violation of
the Declaration or Certificate of Trust or the Partnership Agreement or the
Certificate of Partnership and do not and will not conflict with, or result in
a breach of any of the terms or provisions of, or constitute a default under,
or result in the creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Trust or the Partnership under any existing
applicable law, rule, regulation, judgment, order or decree of any government,
governmental instrumentality or court, domestic or foreign, or any regulatory
body or administrative agency or other governmental body having jurisdiction
over the Trust or the Partnership or their respective properties.
(xiv) Absence of Further Requirements. No authorization,
approval, consent or order of any court or governmental authority or agency is
necessary in connection with the issuance, offer and sale of the Trust
Securities and the Partnership Preferred Securities, and the consummation of
the transactions contemplated by this Agreement by the Partnership or the
Trust, or the execution, delivery, and performance by the Partnership or the
Trust of the applicable Transaction Documents, except such as may be required
under the 1933 Act or the 1933 Act Regulations, the 1934 Act or the 1934 Act
Regulations or state securities laws and the qualification of the Declaration,
the Trust Guarantee, the Investment Guarantee and the Indenture relating to the
Debenture of the Company under the 1939 Act.
(xv) Absence of Proceedings. Except as disclosed in the
Prospectus, there is no action, suit or proceeding before or by any government,
governmental instrumentality or court, domestic or foreign, now pending or, to
the knowledge of the Trust or the Partnership, threatened against or affecting
the Trust or the Partnership that is required to be disclosed in the Prospectus
or that would result in any material adverse change in the condition (financial
or otherwise), earnings or business affairs of the Trust or the Company and its
subsidiaries, taken as a whole, or that could materially and adversely affect
the properties or assets of the Trust or the Partnership, or that could
adversely affect the consummation of the transactions contemplated in this
Agreement.
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SECTION 2. SALE AND DELIVERY TO UNDERWRITERS; CLOSING
(a) Securities. On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Trust agrees to sell to each Underwriter, severally and not jointly, and each
Underwriter, severally and not jointly, agrees to purchase from the Trust, at
the initial public offering price set forth in Schedule B, the number of Trust
Preferred Securities set forth in Schedule A opposite the name of such
Underwriter, plus any additional number of Trust Preferred Securities which
such Underwriter may become obligated to purchase pursuant to the provisions of
Section 10 hereof.
(b) Payment. Payment of the purchase price for, and delivery of
certificates for, the Trust Preferred Securities shall be made at the offices
of Xxxxxx & Xxxxxx L.L.P., 0000 Xxxxxx Xxxxxx, Xxxxxxx, Xxxxx, or at such other
place as shall be agreed upon by the Representative and the Company, at 9:00
a.m. (Eastern time) on the third (fourth, if the pricing occurs after 4:30 p.m.
(Eastern time) on any given day) business day after the date hereof (unless
postponed in accordance with the provisions of Section 10), or such other time
not later than ten business days after such date as shall be agreed upon by the
Representative and the Company (such time and date of payment and delivery
being herein called the "Closing Time").
Payment shall be made to the Trust by wire transfer of
immediately available funds to a bank account designated by the Company,
against delivery to such persons designated by the Representative for the
respective accounts of the Underwriters of a certificate in global form for the
Trust Preferred Securities to be purchased by them. It is understood that each
Underwriter has authorized the Representative, for its account, to accept
delivery of, receipt for, and make payment of the purchase price for, the Trust
Preferred Securities which it has agreed to purchase. Xxxxxxx Xxxxx,
individually and not as representative of the Underwriters, may (but shall not
be obligated to) make payment of the purchase price for the Trust Preferred
Securities to be purchased by any Underwriter whose funds have not been
received by the Closing Time, but such payment shall not relieve such
Underwriter from its obligations hereunder.
The purchase price per Trust Preferred Security to be paid by the
several Underwriters for the Trust Preferred Securities shall be an amount
equal to the initial public offering price as set forth in Schedule B. The
initial public offering price per Trust Preferred Security shall be a fixed
price to be determined by agreement between the Representative and the
Offerors. The initial public offering price and the purchase price, when so
determined, shall be set forth in Schedule B.
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As compensation to the Underwriters for their commitments
hereunder and in view of the fact that the proceeds of the sale of the Trust
Preferred Securities will ultimately be used to purchase the Debentures of the
Company and the Investment Subsidiaries, the Company hereby agrees to pay at
the Closing Time to the Representative, for the accounts of the several
Underwriters, a commission per Trust Preferred Security set forth on Schedule
B.
At the Closing Time, the Company will pay, or cause to be paid,
the commission payable at such time to the Underwriters under Section 2 hereof
by wire transfer of immediately available funds to a bank account designated by
Merrill, Lynch, Xxxxxx, Xxxxxx & Xxxxx Incorporated for the account of
Underwriters.
(c) Denominations; Registration. Certificates for the Trust
Preferred Securities shall be in such denominations and registered in such
names as the Representative may request in writing at least one business day
before the Closing Time. The Trust Preferred Securities will be made available
for examination and packaging by the Representative in the City of New York not
later than 9:00 a.m. (Eastern time) on the business day prior to the Closing
Time.
SECTION 3. COVENANTS OF THE OFFERORS
The Offerors covenant with each Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests.
The Offerors, subject to Section 3(b), will comply with the requirements of
Rule 430A or Rule 434, as applicable, and will notify the Representative
immediately, and confirm the notice in writing, (i) when any post-effective
amendment to the Registration Statement shall become effective, or any
supplement to the Prospectus or any amended Prospectus shall have been filed,
(ii) of the receipt of any comments from the Commission, (iii) of any request
by the Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for additional information and
(iv) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing or
suspending the use of any preliminary prospectus, or of the suspension of the
qualification of the Offered Securities for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceeding for any of
such purposes. The Company will make every reasonable effort to prevent the
issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible moment.
(b) Filing of Amendments. During the period when the Underwriters
are required to deliver a prospectus with respect to the Offered Securities,
the Offerors will give the Representative
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notice of its intention to file or prepare any amendment to the Registration
Statement (including any filing under Rule 462(b)), any Term Sheet or any
amendment, supplement or revision to either the prospectus included in the
Registration Statement at the time it became effective or to the Prospectus,
whether pursuant to the 1933 Act, the 1934 Act or otherwise, will furnish the
Representative with copies of any such documents a reasonable amount of time
prior to such proposed filing or use, as the case may be, and will not file or
use any such document to which the Representative or counsel for the
Underwriters shall reasonably object.
(c) Delivery of Registration Statements. The Offerors have furnished
or will deliver to the Representative and counsel for the Underwriters, without
charge, conformed copies of the Registration Statement as originally filed and
of each amendment thereto (including exhibits filed therewith or incorporated
by reference therein and documents incorporated or deemed to be incorporated by
reference therein) and conformed copies of all consents and certificates of
experts, and will also deliver to the Representative, without charge, a
conformed copy of the Registration Statement as originally filed and of each
amendment thereto (without exhibits) for each of the Underwriters. The copies
of the Registration Statement and each amendment thereto furnished to the
Underwriters will be identical to the electronically transmitted copies thereof
filed with the Commission pursuant to XXXXX, except to the extent permitted by
Regulation S-T.
(d) Delivery of Prospectuses. The Offerors have delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus as
such Underwriter reasonably requested, and the Offerors hereby consent to the
use of such copies for purposes permitted by the 1933 Act. The Offerors will
furnish to each Underwriter, without charge, during the period when the
prospectus is required to be delivered under the 1933 Act or the 1934 Act, such
number of copies of the Prospectus (as amended or supplemented) as such
Underwriter may reasonably request. The Prospectus and any amendments or
supplements thereto furnished to the Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission pursuant to
XXXXX, except to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Offerors will
comply with the 1933 Act and the 1933 Act Regulations, the 1934 Act and the
1934 Act Regulations and the 1939 Act and the 1939 Act Regulations with respect
to the offer of the Offered Securities so as to permit the completion of the
distribution of the Trust Preferred Securities as contemplated in this
Agreement and in the Prospectus. If at any time when a prospectus is required
by the
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1933 Act to be delivered in connection with sales of the Trust Preferred
Securities, any event shall occur or condition shall exist as a result of which
it is necessary, in the opinion of counsel for the Underwriters or for the
Company, to amend the Registration Statement or amend or supplement the
Prospectus in order that the Prospectus will not include any untrue statements
of a material fact or omit to state a material fact necessary in order to make
the statements therein not misleading in the light of the circumstances
existing at the time it is delivered to a purchaser, or if it shall be
necessary, in the opinion of such counsel, at any such time to amend the
Registration Statement or amend or supplement the Prospectus in order to comply
with the requirements of the 1933 Act or the 1933 Act Regulations, the Company
will promptly prepare and file with the Commission, subject to Section 3(b),
such amendment or supplement as may be necessary to correct such statement or
omission or to make the Registration Statement or the Prospectus comply with
such requirements, and the Company will furnish to the Underwriters such number
of copies of such amendment or supplement as the Underwriters may reasonably
request.
(f) Blue Sky Qualifications. The Company will use all reasonable
efforts, in cooperation with the Underwriters, to qualify the Offered
Securities for offering and sale under the applicable securities laws of such
states and other jurisdictions as the Representative may designate and to
maintain such qualifications in effect for a period of not less than one year
from the later of the effective date of the Registration Statement and any Rule
462(b) Registration Statement; provided, however, that the Company shall not be
obligated to file any general consent to serve of process or to qualify as a
foreign corporation or as a dealer in securities in any jurisdiction in which
it is not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject. In each
jurisdiction in which the Offered Securities have been so qualified, the
Company will file such statements and reports as may be required by the laws of
such jurisdiction to continue such qualification in effect for a period of not
less than one year from the effective date of the Registration Statement and
any Rule 462(b) Registration Statement.
(g) Rule 158. The Offerors will timely file such reports pursuant to
the 1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use or cause to be used the
net proceeds received from the sale of the Offered
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Securities in the manner specified in the Prospectus under "Use of Proceeds."
(i) Listing. The Company will use all reasonable efforts to effect
the listing of the Offerors Securities on the New York Stock Exchange.
(j) Restriction on Sale of Securities. During a period of 30 days
from the date of the Prospectus, neither the Trust nor the Company will,
without the prior written consent of the Underwriters, directly or indirectly,
sell, offer to sell, grant any option for sale of, or otherwise dispose of, any
Trust Preferred Securities, any Partnership Preferred Securities, any preferred
stock of the Company or any security convertible into or exchangeable into or
exercisable for Trust Preferred Securities or Partnership Preferred Securities
or any preferred stock of the Company.
(k) Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will
file all documents required to be filed with the Commission pursuant to the
1934 Act within the time periods required by the 1934 Act and the 1934 Act
Regulations.
SECTION 4. PAYMENT OF EXPENSES
(a) 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 preparation, printing and delivery to the Underwriters of
this Agreement, the Declaration, the Partnership Agreement, and the Indentures
and such other documents as may be required in connection with the offering,
purchase, sale, issuance or delivery of the Securities (other than fees and
expenses of counsel for the Underwriters related thereto), (iii) the
preparation, issuance and delivery of the certificates for the Trust Preferred
Securities to the Underwriters, (iv) the fees and disbursements of the
Company's counsel, accountants, experts and other advisors, (v) the
qualification of the Offered Securities under securities laws in accordance
with the provisions of Section 3(f) hereof, including filing fees and the
reasonable fees and disbursements of counsel for the Underwriters in connection
therewith and in connection with the preparation of the Blue Sky Survey and any
supplement thereto, (vi) the printing and delivery to the Underwriters of
copies of each preliminary prospectus, any Term Sheets and of the Prospectus
and any amendments or supplements thereto, (vii) the preparation, printing and
delivery to the Underwriters of copies of the Blue Sky Survey and any
supplement thereto, (viii) the fees and expenses of
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the Property Trustee and the Trust Preferred Guarantee Trustee, including the
reasonable fees and disbursements of counsel for the Trustees in connection
with the Indentures, the Investment Guarantees and the Debentures, (ix) any
fees payable in connection with the rating of the Trust Preferred Securities,
and (x) the fees and expenses incurred in connection with the listing of the
Offered Securities on the New York Stock Exchange.
(b) Termination of Agreement. If this Agreement is terminated by the
Representative in accordance with the provisions of Section 5 or Section
9(a)(i) hereof, the Company shall reimburse the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
SECTION 5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS
The obligations of the several Underwriters hereunder are subject to the
accuracy of the representations and warranties of the Offerors contained in
Section 1 hereof and in certificates of any officer of the Company, the Trust,
the Partnership or any subsidiary of the Company delivered pursuant to the
provisions hereof, to the performance by each of the Offerors of its covenants
and other obligations hereunder, and to the following further conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at the Closing Time no stop order suspending the effectiveness of
the Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission, and any request
on the part of the Commission for additional information shall have been
complied with to the reasonable satisfaction of counsel to the Underwriters. A
prospectus containing the Rule 430A Information shall have been filed with the
Commission in accordance with Rule 424(b) (or a post-effective amendment
providing such information shall have been filed and declared effective in
accordance with the requirements of Rule 430A) or, if the Company has elected
to rely upon Rule 434, a Term Sheet shall have been filed with the Commission
in accordance with Rule 424(b).
(b) Opinion of Counsel for Company. At the Closing Time, the
Representative shall have received the favorable opinions, dated as of the
Closing Time, of Xxxxx X. Xxxxxxx, Xx., Senior Vice President and General
Counsel of the Company and Xxxxxx & Xxxxxx L.L.P., counsel to the Company, the
Trust and the Partnership, in form and substance satisfactory to counsel for
the Underwriters, together with signed or reproduced copies of such letter for
each of the other Underwriters to the effect set forth in Exhibit B
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hereto. Such counsel may also state that, insofar as such opinion involves
factual matters, they have relied, to the extent they deem proper, upon
certificates of officers of the Company and its subsidiaries and certificates
of public officials.
(c) Opinion of Counsel for Underwriters. At the Closing Time, the
Representative shall have received the favorable opinions, dated as of the
Closing Time, of Xxxxxxxxx &Patterson, L.L.P. and of Skadden, Arps, Slate,
Xxxxxxx & Xxxx LLP, co-counsel for the Underwriters, together with signed or
reproduced copies of such letter for each of the other Underwriters in form and
substance satisfactory to the Underwriters.
(d) Opinion of Counsel for the Property Trustee. At the Closing
Time, the Representative shall have received the favorable opinion, dated as of
the Closing Time, of Xxxxxx & Xxxxxx, counsel for the Property Trustee, in form
and substance satisfactory to counsel for the Underwriters, together with
signed or reproduced copies of such letters for each of the other Underwriters
to the effect set forth in Exhibit C hereto and to such further effect as
counsel to the Underwriters may reasonably request.
(e) Officers' Certificate. At the Closing Time, there shall not have
been, since the date hereof or since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries taken as a whole,
whether or not arising in the ordinary course of business, and the
Representative shall have received a certificate of the President or a Vice
President of the Company and of the chief financial or chief accounting officer
of the Company, dated as of the Closing Time, to the effect that (i) there has
been no such material adverse change, (ii) the representations and warranties
in Section 1(a) hereof are true and correct with the same force and effect as
though expressly made at and as of the Closing Time, (iii) the Company shall
have complied with all agreements and satisfied all conditions on its part to
be performed or satisfied at or prior to the Closing Time, and (iv) no stop
order suspending the effectiveness of the Registration Statement has been
issued and, to such officer's knowledge, no proceedings for that purpose have
been instituted or are pending or are contemplated by the Commission.
(f) Accountant's Comfort Letter. At the time of the execution of
this Agreement, the Representative shall have received from Xxxxxx Xxxxxxxx LLP
a letter, dated as of such date, in form and substance satisfactory to the
Representative, together with signed or reproduced copies of such letter for
each of the other Underwriters, containing statements and information of the
type ordinarily included in accountants' "comfort letters" to
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underwriters with respect to the financial statements and certain financial
information contained in the Registration Statement and the Prospectus.
(g) Bring-down Comfort Letter. At the Closing Time, the
Representative shall have received from Xxxxxx Xxxxxxxx LLP a letter, dated as
of the Closing Time, 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 business days
prior to the Closing Time.
(h) Maintenance of Rating. Since the date of this Agreement, there
shall not have occurred a downgrading in the rating assigned to the Company's
debt securities by any "nationally recognized statistical rating agency," as
that term is defined by the Commission for purposes of Rule 436(g)(2) under the
1933 Act, and no such organization shall have publicly announced that it has
under surveillance or review, with possible negative implications, its rating
of any of the Company's debt securities.
(i) Approval of Listing. At the Closing Time, the Trust Preferred
Securities shall have been approved for listing on the New York Stock Exchange,
subject only to official notice of issuance.
(j) Additional Documents. At the Closing Time, counsel for the
Underwriters shall have been furnished with such documents as they may
reasonably require for the purpose of enabling them to pass upon the issuance
and sale of the Securities as herein contemplated, or in order to evidence the
accuracy of any of the representations or warranties, or the fulfillment of any
of the conditions, herein contained; and all proceedings taken by the Company
in connection with the issuance and sale of the Offered Securities as herein
contemplated shall be reasonably satisfactory in form and substance to the
Representative and counsel for the Underwriters.
(k) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled,
this Agreement may be terminated by the Representative by notice to the Company
at any time at or prior to the Closing Time, and such termination shall be
without liability of any party to any other party except as provided in Section
4 and except that Sections 1, 6 and 7 shall survive any such termination and
remain in full force and effect.
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SECTION 6. INDEMNIFICATION
(a) Indemnification of Underwriters. The Offerors agree, jointly and
severally, to indemnify and hold harmless each Underwriter and each person, if
any, who controls any Underwriter within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act, as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement (or
any amendment thereto), including the Rule 430A Information and the Rule 434
Information, if applicable, or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the statements
therein not misleading or arising out of any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto), or the omission or alleged
omission therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section 6(d)
below) any such settlement is effected with the written consent of the Company;
and
(iii) against any and all expense whatsoever, as incurred
(including, subject to Section 6(c) hereof, the fees and disbursements of
counsel chosen by Xxxxxxx Xxxxx), reasonably incurred in investigating,
preparing or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, to the extent that any such expense is
not paid under (i) or (ii) above; provided, however, that the indemnity set
forth in this Section 6(a) shall not apply to any loss, liability, claim,
damage or expense to the extent arising out of any untrue statement or omission
or alleged untrue statement or omission made in reliance upon and in conformity
with written information furnished to the Offerors by any Underwriter through
Xxxxxxx Xxxxx expressly for use in the Registration Statement (or any amendment
thereto), including the Rule 430A Information and the Rule 434 Information, if
applicable, or any preliminary prospectus or the Prospectus (or any amendment
or supplement thereto). The foregoing indemnity with respect to any untrue
statement or alleged untrue statement contained in or
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omission or alleged omission from a preliminary prospectus shall not inure to
the benefit of the Underwriter (or any person controlling such Underwriter)
from whom the person asserting any loss, liability, claim, damage or expense
purchased any of the Offered Securities which are the subject thereof if the
Company shall sustain the burden of proving that such person was not sent or
given a copy of the Prospectus (or the Prospectus as amended or supplemented)
at or prior to the written confirmation of the sale of such Offered Securities
to such person and the untrue statement contained in or omission from such
preliminary prospectus was corrected in the Prospectus (or the Prospectus as
amended or supplemented) and the Company had previously furnished copies
thereof to such Underwriter.
(b) Indemnification of Company, Directors and Officers. Each
Underwriter, severally in proportion to its respective purchase obligation and
not jointly, agrees to indemnify and hold harmless the Offerors, directors of
the Company, the General Partner of the Partnership, the Issuer Trustees of the
Trust, each of the officers of the Offerors who signed the Registration
Statement, and each person, if any, who controls any of the Offerors within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, against
any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement (or any amendment thereto),
including the Rule 430A Information and the Rule 434 Information, if
applicable, or any preliminary prospectus or the Prospectus (or any amendment
or supplement thereto) in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through Xxxxxxx Xxxxx
expressly for use in the Registration Statement (or any amendment thereto) or
such preliminary prospectus or the Prospectus (or any amendment or supplement
thereto).
(c) Actions Against Parties; Notification. Each indemnified party
shall give notice as promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the extent it
is not materially prejudiced as a result thereof and in any event shall not
relieve it from any liability which it may have otherwise than on account of
this indemnity agreement. In the case of parties indemnified pursuant to
Section 6(a) above, counsel to the indemnified parties shall be selected by
Xxxxxxx Xxxxx, and, in the case of parties indemnified pursuant to Section 6(b)
above, counsel to the indemnified parties shall be selected by the Company,
provided that if it so elects within a reasonable time after receipt of such
notice, an indemnifying party, jointly with any
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other indemnifying parties receiving such notice, may assume the defense of
such action with counsel chosen by it and approved by the indemnified parties
defendant in such action, unless such indemnified parties reasonably object to
such assumption on the ground that there may be legal defenses available to
them which are different from or in addition to those available to such
indemnifying party. If an indemnifying party assumes the defense of such
action, the indemnifying parties shall not be liable for any fees and expenses
of counsel for the indemnified parties incurred thereafter in connection with
such action. An indemnifying party may participate at its own expense in the
defense of any such action; provided, however, that counsel to the indemnifying
party shall not (except with the consent of the indemnified party) also be
counsel to the indemnified party. In no event shall the indemnifying parties
be liable for fees and expenses of more than one counsel (in addition to any
local counsel) separate from their own counsel for all indemnified parties in
connection with any one action or separate but similar or related actions in
the same jurisdiction arising out of the same general allegations or
circumstances. No indemnifying party shall, without the prior written consent
of the indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 6 or Section 7 hereof (whether or not the indemnified
parties are actual or potential parties thereto), unless such settlement,
compromise or consent (i) includes an unconditional release of each indemnified
party from all liability arising out of such litigation, investigation,
proceeding or claim and (ii) does not include a statement as to or an admission
of fault, culpability or a failure to act by or on behalf of any indemnified
party.
(d) Settlement Without Consent if Failure to Reimburse. If at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for reasonable fees and expenses of counsel,
such indemnifying party agrees that it shall be liable for any settlement of
the nature contemplated by Section 6(a)(ii) effected without its written
consent if (i) such settlement is entered into more than 45 days after receipt
by such indemnifying party of the aforesaid request, (ii) such indemnifying
party shall have received notice of the terms of such settlement at least 30
days prior to such settlement being entered into and (iii) such indemnifying
party shall not have reimbursed such indemnified party in accordance with such
request prior to the date of such settlement.
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SECTION 7. CONTRIBUTION
If the indemnification provided for in Section 6 hereof is for any
reason unavailable to or insufficient to hold harmless an indemnified party in
respect of any losses, liabilities, claims, damages or expenses referred to
therein, then each indemnifying party shall contribute to the aggregate amount
of such losses, liabilities, claims, damages and expenses incurred by such
indemnified party, as incurred, (i) in such proportion as is appropriate to
reflect the relative benefits received by the Offerors on the one hand and the
Underwriters on the other hand from the offering of the Trust Preferred
Securities pursuant to this Agreement 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 Offerors on the one hand and of the
Underwriters on the other hand in connection with the statements or omissions
which resulted in such losses, liabilities, claims, damages or expenses, as
well as any other relevant equitable considerations.
The relative benefits received by the Offerors on the one hand and the
Underwriters on the other hand in connection with the offering of the Trust
Preferred Securities pursuant to this Agreement shall be deemed to be in the
same respective proportions as the total net proceeds from the offering of the
Trust Preferred Securities pursuant to this Agreement (before deducting
expenses but after deducting the total underwriting commission received by the
Underwriters) received by the Offerors and the total underwriting commission
received by the Underwriters, in each case as set forth on the cover of the
Prospectus, or, if Rule 434 is used, the corresponding location on the Term
Sheet, bear to the aggregate initial public offering price of the Trust
Preferred Securities as set forth on such cover.
The relative fault of the Offerors on the one hand and the Underwriters
on the other hand shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Offerors or by the Underwriters and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of
the equitable considerations referred to above in this Section 7. The
aggregate amount of losses, liabilities, claims, damages and expenses incurred
by an indemnified party and referred to above in this
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Section 7 shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever based upon any
such untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the Trust Preferred 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
any such untrue or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter,
and each director of the Company, the General Partner of the Partnership, the
Issuer Trustees of the Trust, each officer of the Offerors who signed the
Registration Statement, and each person, if any, who controls any of the
Offerors within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act shall have the same rights to contribution as the Company. The
Underwriters' respective obligations to contribute pursuant to this Section 7
are several in proportion to the number of Trust Preferred Securities set forth
opposite their respective names in Schedule A hereto and not joint.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY
All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Offerors or any of its
subsidiaries submitted pursuant hereto, shall remain operative and in full
force and effect, regardless of any investigation made by or on behalf of any
Underwriter or controlling person, or by or on behalf of the Offerors, and
shall survive delivery of the Trust Preferred Securities to the Underwriters.
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SECTION 9. TERMINATION OF AGREEMENT
(a) Termination; General. The Representative may terminate this
Agreement, by notice to the Company, at any time at or prior to the Closing
Time (i) if there has been, since the time of execution of this Agreement or
since the respective dates as of which information is given in the Prospectus,
any material adverse change in the condition, financial or otherwise, or in the
earnings or business affairs or business prospects of the Company and its
subsidiaries taken as a whole, whether or not arising in the ordinary course of
business, or (ii) if there has occurred any material adverse change in the
financial markets in the United States or the international financial markets,
any outbreak of hostilities or escalation thereof or other calamity or crisis
or any change or development involving a prospective change in national or
international political, financial or economic conditions, in each case the
effect of which is such as to make it, in the judgment of the Representative,
impracticable to market the Trust Preferred Securities or to enforce contracts
for the sale of the Trust Preferred Securities, or (iii) if trading in any
securities of the Company has been suspended or materially limited by the
Commission or the New York Stock Exchange or if trading generally on the
American Stock Exchange or the New York Stock Exchange or in the Nasdaq
National Market has been suspended or materially limited, or minimum or maximum
prices for trading have been fixed, or maximum ranges for prices have been
required, by any of said exchanges or by such system or by order of the
Commission, the National Association of Securities Dealers, Inc. or any other
governmental authority, or (iv) if a banking moratorium has been declared by
either Federal or New York State authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that
Sections 1, 6 and 7 shall survive such termination and remain in full force and
effect.
SECTION 10. DEFAULT BY ONE OR MORE OF THE UNDERWRITERS
If one or more of the Underwriters shall fail at the Closing Time to
purchase the Trust Preferred Securities which it or they are obligated to
purchase under this Agreement (the "Defaulted Securities"), the Representative
shall have the right, within 24 hours thereafter, to make arrangements for one
or more of the non-defaulting Underwriters, or any other underwriters, to
purchase all, but not less than all, of the Defaulted Securities in such
amounts as may be agreed upon and upon the terms herein set forth; if, however,
the Representative shall not have completed such arrangements within such 24-
hour period, then:
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(i) if the number of Defaulted Securities does not exceed 10%
of the aggregate number of the Trust Preferred Securities to be purchased
hereunder, each of the non-defaulting Underwriters shall be obligated,
severally and not jointly, to purchase the full amount thereof in the
proportions that their respective underwriting obligations hereunder bear to
the underwriting obligations of all non-defaulting Underwriters, or
(ii) if the number of Defaulted Securities exceeds 10% of the
aggregate number of the Trust Preferred Securities to be purchased hereunder,
this Agreement shall terminate without liability on the part of any non-
defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement, either the Representative or the Company shall have the
right to postpone the Closing Time for a period not exceeding seven days in
order to effect any required changes in the Registration Statement or
Prospectus or in any other documents or arrangements.
SECTION 11. NOTICES
All notices, requests, statements and other communications hereunder
shall be in writing and shall be delivered or sent by mail, messenger or any
standard form of telecommunication. Notices to the Underwriters shall be
directed to the Representative at Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated, 0000 XxXxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000, Attention
Xxx X. Xxxxx, Director, Facsimile No. (000) 000-0000; and notices to the
Company, the Trust or the Partnership shall be directed to the Company at Enron
Corp., 0000 Xxxxx Xxxxxx, Xxxxxxx, Xxxxx 00000, Attention: Treasury Department,
Facsimile No. (000) 000-0000. Any such notice, request, statement or
communication shall be effective upon receipt thereof.
SECTION 12. PARTIES
This Agreement shall inure to the benefit of and be binding upon the
Underwriters and the Offerors and their respective successors. Nothing
expressed or mentioned in this Agreement is intended or shall be construed to
give any person, firm or corporation, other than the Underwriters and the
Offerors and their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 and their heirs and
legal representatives, any legal or equitable right, remedy or claim under or
in respect of this Agreement or any provision herein contained. This Agreement
and all conditions and provisions hereof
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are intended to be for the sole and exclusive benefit of the Underwriters and
the Offerors and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Trust
Preferred Securities from any Underwriter shall be deemed to be a successor by
reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK. EXCEPT AS OTHERWISE SET FORTH HEREIN, SPECIFIED
TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 14. EFFECT OF HEADINGS
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement between the Underwriters and the Company in accordance with its
terms.
Very truly yours,
ENRON CORP.
By:
-----------------------------------
Name:
---------------------------
Title:
--------------------------
ENRON PREFERRED FUNDING, L.P.
By:
-----------------------------------
Name:
---------------------------
Title:
--------------------------
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ENRON CAPITAL TRUST I
By:
-----------------------------------
Name:
---------------------------
Title:
--------------------------
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
XXXX XXXXXX XXXXXXXX INC.
X.X. XXXXXXX & SONS, INC.
PAINEWEBBER INCORPORATED
XXXXXXXX XXXXXX REFSNES, INC.
XXXXX XXXXXX INC.
By: XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX &
XXXXX, INCORPORATED
By:
---------------------------------------
Authorized Signatory
For themselves and as Representative of the other
Underwriters named in Schedule A hereto.
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SCHEDULE A
Number of
Name of Underwriter Trust Preferred Securities
------------------- --------------------------
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated . . . . . . . . . . .
----------
----------
----------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
=====================
34
SCHEDULE B
1. The initial public offering price per security for the Trust
Preferred Securities, determined as provided in said Section 2, shall be
$_____________.
2. The purchase price per security for the Trust Preferred Securities
to be paid by the several Underwriters shall be $____________, being an amount
equal to the initial public offering price set forth above.
3. The compensation per Trust Preferred Security to be paid by the
Company to the several Underwriters in respect of their commitments hereunder
shall be ___________; provided, however, that the compensation per Trust
Preferred Security for sale of 10,000 or more Trust Preferred Securities to a
single purchases shall be __________.
