PPG INDUSTRIES, INC.
("Company")
Debt Securities
TERMS AGREEMENT
---------------
August 18, 1999
To: The Underwriters Identified Herein
Dear Sirs:
The undersigned agrees to sell to the several Underwriters named in Schedule
A hereto for their respective accounts, on and subject to the terms and
conditions of the Underwriting Agreement attached hereto as Annex A, a form of
which was filed as an exhibit to the Company's registration statement on Form
S-3 (Nos. 333-83019 and 333-44397) ("Underwriting Agreement"), the following
securities ("Offered Securities") on the following terms:
Title:
$300,000,000 6.75% Notes due August 15, 2004 (the "6.75% Notes")
$300,000,000 7.05% Notes due August 15, 2009 (the "7.05% Notes", and
together with the 6.75% Notes, the "Notes")
$200,000,000 7.40% Debentures due 2019 (the "Debentures")
Principal Amount:
$300,000,000 of the 6.75% Notes
$300,000,000 of the 7.05% Notes
$200,000,000 of the Debentures
Interest:
For the 6.75% Notes 6.75% per annum
For the 7.05% Notes 7.05% per annum
For the Debentures 7.40% per annum
Maturity:
For the 6.75% Notes August 15, 2004
For the 7.05% Notes August 15, 2009
For the Debentures August 15, 2019
Optional Redemption:
The 6.75 Notes may not be redeemed.
The 7.05% Notes and the Debentures may be redeemed in whole or in part
at any time at the option of PPG at a redemption price equal to the greater of:
(a) 100% of the principal amount; and
(b) the sum of the present values of the remaining scheduled payments of
principal and interest thereon discounted, on a semiannual basis, at the
"Treasury Yield" (defined below) plus:
(i) ten basis points (0.10%) in the case of the 7.05% Notes; and
(ii) fifteen basis points (0.15%) in the case of the Debentures.
"Treasury Yield" means, with respect to any redemption date, the rate per
annum equal to the semi-annual yield to maturity of the Comparable Treasury
Issue (defined below), assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price on the redemption date.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Independent Investment Banker as having a maturity
comparable to the remaining term of the Notes or Debentures (as the case
may be) being redeemed that would be utilized in pricing new issues of
corporate debt securities having comparable maturity to the Notes or
Debentures being redeemed.
"Independent Investment Banker" means Xxxxxxx, Xxxxx & Co. or if they are
unwilling or unavailable, an independent investment banking institution of
national standing appointed by the Trustee after consultation with PPG.
"Comparable Treasury Price" means, with respect to a redemption date, (i)
the average of the bid and asked prices for the Comparable Treasury Issue
on the third business day preceding such redemption date, as set forth in
the daily statistical release (or any successor release) published by the
Federal Reserve Bank of New York and designated "Composite 3:30 p.m.
Quotations for U.S. Government Securities" or (ii) if such release (or any
successor release) is not published or does not contain such prices on the
relevant business day, the average of the bid and asked prices for the
Comparable Treasury Issue quoted in writing by the Referenced Treasury
Dealers at 5:00 p.m. on the third business day preceding the redemption
date.
"Referenced Treasury Dealers" means each of Xxxxxxx, Sachs & Co. and Credit
Suisse First Boston Corporation and their respective successors or
substitutes for such firms made in accordance with the Indenture.
Sinking Fund: There is no sinking fund.
Listing: None.
Delayed Delivery Contracts: None.
Purchase Price:
99.020% of principal amount, plus accrued interest, if any, from
August 23, 1999 of the 6.75% Notes.
98.760% of principal amount, plus accrued interest, if any, from
August 23, 1999 of the 7.05% Notes.
98.377% of principal amount, plus accrued interest, if any, from
August 23, 1999 of the 7.40% Debentures.
Expected Reoffering Price:
99.620% of principal amount of the 6.75% Notes, subject to change by the
Underwriters.
99.410% of principal amount of the 7.05% Notes, subject to change by the
Underwriters.
99.252% of principal amount of the 7.40% Debentures, subject to change by
the Underwriters.
Closing: 9:30 A.M. on August 23, 1999, at the offices of Xxxxxxxx &
Xxxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, same day funds.
Settlement and Trading: Book-Entry Only via DTC. The Offered Securities
will trade in DTC's Same Day Funds Settlement System.
Names and Addresses of Representatives:
Xxxxxxx, Sachs & Co. X.X. Xxxxxx Securities Inc.
00 Xxxxx Xxxxxx 00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000 Xxx Xxxx, Xxx Xxxx 00000
Credit Suisse First Boston Corporation Chase Securities Inc.
Eleven Madison Avenue 000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000 Xxx Xxxx, Xxx Xxxx 00000
The respective principal amounts of the Offered Securities to be purchased
by each of the Underwriters are set forth opposite their names in Schedule A
hereto.
The provisions of the Underwriting Agreement attached hereto as Schedule A
are incorporated herein by reference.
The Offered Securities will be made available for checking and packaging at
the office of Xxxxxxx, Xxxxx & Co. or such other person as Xxxxxxx, Sachs &
Co. may designate at least 24 hours prior to the Closing Date.
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to the Company one of the counterparts hereof,
whereupon it will become a binding agreement between the Company and the
several Underwriters in accordance with its terms.
Very truly yours,
PPG Industries, Inc.
By....................
Name:
Title:
The foregoing Terms Agreement is hereby confirmed
and accepted as of the date first above written.
Very truly yours,
By:_________________________
(Xxxxxxx, Xxxxx & Co.)
XXXXXXX, SACHS & CO.
CREDIT SUISSE FIRST BOSTON
CORPORATION
X.X. XXXXXX SECURITIES, INC.
CHASE SECURITIES INC.
SCHEDULE A
Principal Amount Principal Amount
of of Principal Amount
Underwriters 6.75% Notes 7.05% Notes of Debentures
------------
Xxxxxxx, Xxxxx & Co......................... $126,000,000 $126,000,000 $ 84,000,000
Credit Suisse First Boston Corporation...... $ 66,000,000 $ 66,000,000 $ 44,000,000
X.X. Xxxxxx Securities Inc.................. $ 63,000,000 $ 63,000,000 $ 42,000,000
Chase Securities Inc........................ $ 30,000,000 $ 30,000,000 $ 20,000,000
Xxxxxxxx & Partners, L.P.................... $ 3,000,000 $ 3,000,000 $ 2,000,000
Xxxxxxx & Co., Inc.......................... $ 3,000,000 $ 3,000,000 $ 2,000,000
Xxxxxx Xxxxxxx & Co., Inc................... $ 3,000,000 $ 3,000,000 $ 2,000,000
Xxxxxxxx Capital Partners, L.P.............. $ 3,000,000 $ 3,000,000 $ 2,000,000
The Xxxxxxxx Capital Group, L.P............. $ 3,000,000 $ 3,000,000 $ 2,000,000
Total......................... $300,000,000 $300,000,000 $200,000,000
============ ============ ============
ANNEX A
PPG INDUSTRIES, INC.
Debt Securities
UNDERWRITING AGREEMENT
----------------------
To the Underwriters listed
in the Terms Agreement
Referred to Herein.
1. Introductory. PPG Industries, Inc., a Pennsylvania corporation
("Company"), proposes to issue and sell from time to time certain of its
unsecured debt securities registered under the registration statement referred
to in Section 2(a) ("Registered Securities"). The Registered Securities will be
issued under an indenture, dated as of August 1, 1982, as amended and
supplemented ("Indenture"), between the Company and Xxxxxx Trust and Savings
Bank, as Trustee, in one or more series, which series may vary as to interest
rates, maturities, redemption provisions, selling prices and other terms, with
all such terms for any particular series of the Registered Securities being
determined at the time of sale. Particular series of the Registered Securities
will be sold pursuant to a Terms Agreement referred to in Section 3, for resale
in accordance with terms of offering determined at the time of sale.
The Registered Securities involved in any such offering are hereinafter
referred to as the "Offered Securities". The firm or firms which agree to
purchase the Offered Securities are hereinafter referred to as the
"Underwriters" of such Securities, and the representative or representatives of
the Underwriters, if any, specified in a Terms Agreement referred to in Section
3 are hereinafter referred to as the "Representatives"; provided, however, that
if the Terms Agreement does not specify any representative of the Underwriters,
the term "Representatives", as used in this Agreement (other than in Sections
2(b), 5(c) and 6 and the second sentence of Section 3), shall mean the
Underwriters.
2. Representations and Warranties of the Company. The Company, as of the
date of each Terms Agreement referred to in Section 3, represents and warrants
to, and agrees with, each Underwriter that:
(a) Registration statements (Nos. 333-83019 and 333-44397), including a
prospectus, relating to the Registered Securities have been filed with the
Securities and Exchange Commission ("Commission") and have become effective.
Such registration statements, as amended at the time of any Terms Agreement
referred to in Section 3, are hereinafter referred to as the "Registration
Statement", and the prospectus included in such Registration Statement, as
supplemented as contemplated by Section 3 to reflect the terms of the
Offered Securities and the terms of offering thereof, as first filed with
the Commission pursuant to and in accordance with Rule 424(b) ("Rule
424(b)") under the Securities Act of 1933 ("Act"), including all material
incorporated by reference therein, is hereinafter referred to as the
"Prospectus". No document has been or will be prepared or distributed in
reliance on Rule 434 under the Act.
(b) On the effective date of the registration statement relating to the
Registered Securities, such registration statement conformed in all respects
to the requirements of the Act, the Trust Indenture Act of 1939 ("Trust
Indenture Act") and the rules and regulations of the Commission ("Rules and
Regulations") and did not include any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary
to make the statements therein not misleading, and on the date of each Terms
Agreement referred to in Section 3, the Registration Statement and the
Prospectus will conform in all respects to the requirements of the Act, the
Trust Indenture Act and the Rules and Regulations, and neither of such
documents will include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make
the statements therein not misleading, except that the foregoing does not
apply to statements in or omissions from any of such documents based upon
written information furnished to the Company by any Underwriter through the
Representatives, if any, specifically for use therein.
(c) The Company has been duly incorporated and is an existing corporation
in good standing under the laws of the Commonwealth of Pennsylvania, with
power and authority (corporate and other) to own its properties and conduct
its business as described in the Prospectus; and the Company is duly
qualified to do
business as a foreign corporation in good standing in all other
jurisdictions in which its ownership or lease of property or the conduct of
its business requires such qualification.
(d) Each subsidiary corporation of the Company has been duly incorporated
and is an existing corporation in good standing under the laws of the
jurisdiction of its incorporation, with power and authority (corporate and
other) to own its properties and conduct its business as described in the
Prospectus; and each subsidiary of the Company is duly qualified to do
business as a foreign corporation in good standing in all other
jurisdictions in which its ownership or lease of property or the conduct of
its business requires such qualification; all of the issued and outstanding
capital stock of each subsidiary owned by the Company has been duly
authorized and validly issued and is fully paid and nonassessable; and the
capital stock of each subsidiary owned by the Company, directly or through
subsidiaries, is owned free from liens, encumbrances and defects.
(e) The Indenture has been duly authorized, executed and delivered and
has been duly qualified under the Trust Indenture Act; the Offered
Securities have been duly authorized; and when the Offered Securities are
delivered and paid for pursuant to the Terms Agreement on the Closing Date
(as defined below) or pursuant to Delayed Delivery Contracts (as hereinafter
defined), such Offered Securities will have been duly executed,
authenticated, issued and delivered and will conform to the description
thereof contained in the Prospectus and the Indenture and such Offered
Securities will constitute valid and legally binding obligations of the
Company, enforceable 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.
(f) The Offered Securities have been approved for listing on the exchange
(if any) indicated in the Terms Agreement, subject to notice of issuance.
(g) 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 by the Terms Agreement (including the
provisions of this Agreement) in connection with the issuance and sale of
the Offered Securities by the Company, except as required under the Act and
the Trust Indenture Act and such as may be required under state securities
laws.
(h) The execution, delivery and performance of the Indenture, the Terms
Agreement (including the provisions of this Agreement) and any Delayed
Delivery Contracts and the issuance and sale of the Offered Securities and
compliance with the terms and provisions thereof will not result in a breach
or violation of any of the terms and provisions of, or constitute a default
under, any statute, any rule, regulation or order of any governmental agency
or body or any court, domestic or foreign, having jurisdiction over the
Company or any subsidiary of the Company or any of their properties, or any
agreement or instrument to which the Company or any such subsidiary is a
party or by which the Company or any such subsidiary is bound or to which
any of the properties of the Company or any such subsidiary is subject, or
the charter or by-laws of the Company or any such subsidiary, and the
Company has full power and authority to authorize, issue and sell the
Offered Securities as contemplated by the Terms Agreement (including the
provisions of this Agreement).
(i) The Terms Agreement (including the provisions of this Agreement) and
any Delayed Delivery Contracts have been duly authorized, executed and
delivered by the Company.
(j) Except as disclosed in the Prospectus, the Company and its
subsidiaries have good and marketable title to all real properties and all
other properties and assets owned by them, in each case free from liens,
encumbrances and defects that would materially affect the value thereof or
materially interfere with the use made or to be made thereof by them; and
except as disclosed in the Prospectus, the Company and its subsidiaries hold
any leased real or personal property under valid and enforceable leases with
no exceptions that would materially interfere with the use made or to be
made thereof by them.
(k) The Company and its subsidiaries possess adequate certificates,
authorities or permits issued by appropriate governmental agencies or bodies
necessary to conduct the business now operated by them and have not received
any notice of proceedings relating to the revocation or modification of any
such certificate,
authority or permit that, if determined adversely to the Company or any of
its subsidiaries, would individually or in the aggregate have a material
adverse effect on the Company and its subsidiaries taken as a whole.
(l) No labor dispute with the employees of the Company or any subsidiary
exists or, to the knowledge of the Company, is imminent that might have a
material adverse effect on the Company and its subsidiaries taken as a
whole.
(m) The Company and its subsidiaries own, possess or can acquire on
reasonable terms, adequate trademarks, trade names and other rights to
inventions, know-how, patents, copyrights, confidential information and
other intellectual property (collectively, "intellectual property rights")
necessary to conduct the business now operated by them, or presently
employed by them, and have not received any notice of infringement of or
conflict with asserted rights of others with respect to any intellectual
property rights that, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a material adverse
effect on the Company and its subsidiaries taken as a whole.
(n) Except as disclosed in the Prospectus, neither the Company nor any of
its subsidiaries is in violation of any statute, any rule, regulation,
decision or order of any governmental agency or body or any court, domestic
or foreign, relating to the use, disposal or release of hazardous or toxic
substances or relating to the protection or restoration of the environment
or human exposure to hazardous or toxic substances (collectively,
"environmental laws"), owns or operates any real property contaminated with
any substance that is subject to any environmental laws, is liable for any
off-site disposal or contamination pursuant to any environmental laws, or is
subject to any claim relating to any environmental laws, which violation,
contamination, liability or claim would individually or in the aggregate
have a material adverse effect on the Company and its subsidiaries taken as
a whole; and the Company is not aware of any pending investigation which
might lead to such a claim.
(o) Except as disclosed in the Prospectus, there are no pending
actions, suits or proceedings against or affecting the Company, any of its
subsidiaries or any of their respective properties that, if determined
adversely to the Company or any of its subsidiaries, would individually or
in the aggregate have a material adverse effect on the condition (financial
or other), business, prospects or results of operations of the Company and
its subsidiaries taken as a whole, or would materially and adversely affect
the ability of the Company to perform its obligations under the Indenture,
the Terms Agreement (including the provisions of this Agreement) or any
Delayed Delivery Contracts, or which are otherwise material in the context
of the sale of the Offered Securities; and no such actions, suits or
proceedings are threatened or, to the Company's knowledge, contemplated.
(p) The financial statements included in the Registration Statement and
Prospectus present fairly the financial position of the Company and its
consolidated subsidiaries as of the dates shown and their results of
operations and cash flows for the periods shown, and such financial
statements have been prepared in conformity with generally accepted
accounting principles in the United States applied on a consistent basis,
except as described therein, and any schedules included in the Registration
Statement present fairly the information required to be stated therein.
(q) Except as disclosed in the Prospectus, since the date of the latest
audited financial statements included in the Prospectus there has been no
material adverse change, nor any development or event involving a
prospective material adverse change, in the condition (financial or other),
business, properties or results of operations of the Company and its
subsidiaries taken as a whole.
(r) The Company is not and, after giving effect to the offering and sale
of the Offered Securities and the application of the proceeds thereof as
described in the Prospectus, will not be an "investment company" as defined
in the Investment Company Act of 1940.
3. Purchase and Offering of Offered Securities. The obligation of the
Underwriters to purchase the Offered Securities will be evidenced by an
agreement or exchange of other written communications ("Terms Agreement") at the
time the Company determines to sell the Offered Securities. The Terms Agreement
will incorporate by reference the provisions of this Agreement, except as
otherwise provided therein, and will specify the firm or firms which will be
Underwriters, the names of any Representatives, the principal amount to be
purchased by each Underwriter, the
purchase price to be paid by the Underwriters and the terms of the Offered
Securities not already specified in the Indenture, including, but not limited
to, interest rate, maturity, any redemption provisions and any sinking fund
requirements and whether any of the Offered Securities may be sold to
institutional investors pursuant to Delayed Delivery Contracts (as defined
below). The Terms Agreement will also specify the time and date of delivery and
payment (such time and date, or such other time not later than seven full
business days thereafter as the Underwriter first named in the Terms Agreement
(the "Lead Underwriter") and the Company agree as the time for payment and
delivery, being herein and in the Terms Agreement referred to as the "Closing
Date"), the place of delivery and payment and any details of the terms of
offering that should be reflected in the prospectus supplement relating to the
offering of the Offered Securities. For purposes of Rule 15c6-1 under the
Securities Exchange Act of 1934, the Closing Date (if later than the otherwise
applicable settlement date) shall be the date for payment of funds and delivery
of securities for all the Offered Securities sold pursuant to the offering,
other than Contract Securities for which payment of funds and delivery of
securities shall be as hereinafter provided. The obligations of the Underwriters
to purchase the Offered Securities will be several and not joint. It is
understood that the Underwriters propose to offer the Securities for sale as set
forth in the Prospectus.
If the Terms Agreement provides for sales of Offered Securities pursuant to
delayed delivery contracts, the Company authorizes the Underwriters to solicit
offers to purchase Offered Securities pursuant to delayed delivery contracts
substantially in the form of Annex I attached hereto ("Delayed Delivery
Contracts") with such changes therein as the Company may authorize or approve.
Delayed Delivery Contracts are to be with institutional investors, including
commercial and savings banks, insurance companies, pension funds, investment
companies and educational and charitable institutions. On the Closing Date the
Company will pay, as compensation, to the Representatives for the accounts of
the Underwriters, the fee set forth in such Terms Agreement in respect of the
principal amount of Offered Securities to be sold pursuant to Delayed Delivery
Contracts ("Contract Securities"). The Underwriters will not have any
responsibility in respect of the validity or the performance of Delayed Delivery
Contracts. If the Company executes and delivers Delayed Delivery Contracts, the
Contract Securities will be deducted from the Offered Securities to be purchased
by the several Underwriters and the aggregate principal amount of Offered
Securities to be purchased by each Underwriter will be reduced pro rata in
proportion to the principal amount of Offered Securities set forth opposite each
Underwriter's name in such Terms Agreement, except to the extent that the Lead
Underwriter determines that such reduction shall be otherwise than pro rata and
so advise the Company. The Company will advise the Lead Underwriter not later
than the business day prior to the Closing Date of the principal amount of
Contract Securities.
The Offered Securities delivered to the Underwriters on the Closing Date
will be in definitive fully registered form in such denominations and registered
in such names as the Lead Underwriter requests.
If the Terms Agreement specifies "Book-Entry Only" settlement or otherwise
states that the provisions of this paragraph shall apply, the Company will
deliver against payment of the purchase price the Offered Securities in the form
of one or more permanent global Securities in definitive form (the "Global
Securities") deposited with the Trustee as custodian for The Depository Trust
Company ("DTC") and registered in the name of Cede & Co., as nominee for DTC.
Interests in any permanent global Securities will be held only in book-entry
form through DTC, except in the limited circumstances described in the
Prospectus. Payment for the Offered Securities shall be made by the Underwriters
(if the Terms Agreement specifies that the Offered Securities will not trade in
DTC's Same Day Funds Settlement System) by certified or official bank check or
checks in New York Clearing House (next day) funds or (if the Terms Agreement
specifies that the Offered Securities will trade in DTC's Same Day Funds
Settlement System) in Federal (same day) funds by official check or checks or
wire transfer to an account in New York previously designated to the Lead
Underwriter by the Company at a bank acceptable to the Lead Underwriter, in each
case drawn to the order of PPG Industries, Inc. at the place of payment
specified in the Terms Agreement on the Closing Date, against delivery to the
Trustee as custodian for DTC of the Global Securities representing all of the
Offered Securities.
4. Certain Agreements of the Company. The Company agrees with the several
Underwriters that it will furnish to Xxxxxxxx & Xxxxxxxx, counsel for the
Underwriters, one signed copy of the registration statement relating to the
Registered Securities, including all exhibits, in the form it became effective
and of all amendments thereto and that, in connection with each offering of
Offered Securities:
(a) The Company will file the Prospectus with the Commission pursuant to
and in accordance with Rule 424(b)(2) (or, if applicable and if consented to
by the Lead Underwriter, subparagraph (5)) not later than the second
business day following the execution and delivery of the Terms Agreement.
(b) The Company will advise the Lead Underwriter promptly of any proposal
to amend or supplement the Registration Statement or the Prospectus and will
afford the Lead Underwriter a reasonable opportunity to comment on any such
proposed amendment or supplement; and the Company will also advise the Lead
Underwriter promptly of the filing of any such amendment or supplement and
of the institution by the Commission of any stop order proceedings in
respect of the Registration Statement or of any part thereof and will use
its best efforts to prevent the issuance of any such stop order and to
obtain as soon as possible its lifting, if issued.
(c) If, at any time when a prospectus relating to the Offered Securities
is required to be delivered under the Act in connection with sales by any
Underwriter or dealer, any event occurs as a result of which the Prospectus
as then amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary at any time to amend the
Prospectus to comply with the Act, the Company promptly will notify the Lead
Underwriter of such event and will promptly prepare and file with the
Commission, at its own expense, an amendment or supplement which will
correct such statement or omission or an amendment which will effect such
compliance. Neither the Lead Underwriter's consent to, nor the
Underwriters' delivery of, any such amendment or supplement shall constitute
a waiver of any of the conditions set forth in Section 5.
(d) As soon as practicable, but not later than 16 months, after the date
of each Terms Agreement, the Company will make generally available to its
securityholders an earning statement covering a period of at least 12 months
beginning after the later of (i) the effective date of the registration
statement relating to the Registered Securities, (ii) the effective date of
the most recent post-effective amendment to the Registration Statement to
become effective prior to the date of such Terms Agreement and (iii) the
date of the Company's most recent Annual Report on Form 10-K filed with the
Commission prior to the date of such Terms Agreement, which will satisfy the
provisions of Section 11(a) of the Act.
(e) The Company will furnish to the Representatives copies of the
Registration Statement, including all exhibits, any related preliminary
prospectus, any related preliminary prospectus supplement, the Prospectus
and all amendments and supplements to such documents, in each case as soon
as available and in such quantities as the Lead Underwriter reasonably
requests. The Company will pay the expenses of printing and distributing to
the Underwriters all such documents.
(f) The Company will arrange for the qualification of the Offered
Securities for sale and the determination of their eligibility for
investment under the laws of such jurisdictions as the Lead Underwriter
designates and will continue such qualifications in effect so long as
required for the distribution.
(g) During the period of five years after the date of any Terms
Agreement, the Company will furnish to the Representatives and, upon
request, to each of the other Underwriters, if any, as soon as practicable
after the end of each fiscal year, a copy of its annual report to
stockholders for such year; and the Company will furnish to the
Representatives (i) as soon as available, a copy of each report and any
definitive proxy statement of the Company filed with the Commission under
the Securities Exchange Act of 1934 or mailed to stockholders, and (ii) from
time to time, such other information concerning the Company as the Lead
Underwriter may reasonably request.
(h) The Company will pay all expenses incident to the performance of its
obligations under the Terms Agreement (including the provisions of this
Agreement) and will reimburse the Underwriters (if and to the extent
incurred by them) for any filing fees or other expenses (including fees and
disbursements of counsel) incurred by them in connection with qualification
of the Registered Securities for sale and determination of their eligibility
for investment under the laws of such jurisdictions as the Lead Underwriter
may designate and the printing of memoranda relating thereto, for any fees
charged by investment rating agencies for the rating of the Offered
Securities for any applicable filing fee of the National Association of
Securities Dealers, Inc.
relating to the Registered Securities, for any travel expenses of the
Company's officers and employees and any other expenses of the Company in
connection with attending or hosting meetings with prospective purchasers of
Registered Securities and for expenses incurred in distributing the
Prospectus, any preliminary prospectuses, any preliminary prospectus
supplements or any other amendments or supplements to the Prospectus to the
Underwriters.
(i) Except in connection with employee benefit or Director compensation
plans of the Company, the Company will not, without the prior written
consent of the Lead Underwriter, offer, sell, contract to sell, pledge or
otherwise dispose of, directly or indirectly, or file with the Commission a
registration statement under the Act relating to United States dollar-
denominated debt securities issued or guaranteed by the Company and having a
maturity of more than one year from the date of issue, or publicly disclose
the intention to make any such offer, sale, pledge, disposal or filing, for
a period beginning at the time of execution of the Terms Agreement and
ending the number of days after the Closing Date specified under "Blackout"
in the Terms Agreement.
5. Conditions of the Obligations of the Underwriters. The obligations of
the several Underwriters to purchase and pay for the Offered Securities will be
subject to the accuracy of the representations and warranties on the part of the
Company herein, to the accuracy of the statements of Company officers made
pursuant to the provisions hereof, to the performance by the Company of its
obligations hereunder and to the following additional conditions precedent:
(a) On or prior to the date of the Terms Agreement, the Representatives
shall have received a letter, dated the date of delivery thereof, of
Deloitte & Touche LLP or another independent certified public accounting
firm reasonably satisfactory to the Representatives confirming that they are
independent public accountants with respect to the Company within the
meaning of the Act and the applicable published Rules and Regulations
thereunder and stating in effect that:
(i) in their opinion the financial statements and any schedules of
the Company examined by them and included in the Prospectus comply in
form in all material respects with the applicable accounting
requirements of the Act and the related published Rules and Regulations;
(ii) they have performed the procedures specified by the American
Institute of Certified Public Accountants for a review of interim
financial information as described in Statement on Auditing Standards
No. 71, Interim Financial Information, on any unaudited interim
financial statements of the Company included in the Registration
Statement;
(iii) on the basis of the review referred to in clause (ii) above, a
reading of the latest available interim financial statements of the
Company, inquiries of officials of the Company who have responsibility
for financial and accounting matters and other specified procedures,
nothing came to their attention that caused them to believe that:
(A) the unaudited financial statements of the Company included
in the Prospectus, if any, do not comply in form in all material
respects with the applicable accounting requirements of the Act and
the related published Rules and Regulations or any material
modifications should be made to such unaudited financial statements
for them to be in conformity with generally accepted accounting
principles applied on a basis substantially consistent with that of
the audited financial statements;
(B) if any unaudited "capsule" information is contained in the
Prospectus, the unaudited consolidated net sales, net operating
income, net income and net income per share amounts or other amounts
constituting such "capsule" information and described in such letter
do not agree with the corresponding amounts set forth in the
unaudited consolidated financial statements;
(C) at the date of the latest available balance sheet of the
Company read by such accountants, or at a subsequent specified date
not more than five days prior to the date of the Terms Agreement,
there was any change in the capital stock or any increase in short-
term
indebtedness or long-term debt of the Company and its consolidated
subsidiaries or, at the date of the latest available balance sheet
of the Company read by such accountants, there was any decrease in
consolidated net current assets or net assets, as compared with
amounts shown on the latest balance sheet of the Company included in
the Prospectus; or
(D) for the period from the closing date of the latest income
statement of the Company included in the Prospectus to the closing
date of the latest available income statement read by such
accountants there were any decreases, as compared with the
corresponding period of the previous year and with the period of
corresponding length ended the date of the latest income statement
included in the Prospectus, in consolidated net sales or net
operating income, in the total or per share amounts of consolidated
income before extraordinary items or net income or in the ratio of
earnings to fixed charges;
except in all cases set forth in clauses (C) and (D) above for changes,
increases or decreases which the Prospectus discloses have occurred or
may occur or which are described in such letter; and
(iv) they have compared specified dollar amounts (or percentages
derived from such dollar amounts) and other financial information
contained in the Prospectus (in each case to the extent that such dollar
amounts, percentages and other financial information are derived from
the general accounting records of the Company and its subsidiaries
subject to the internal controls of the Company's accounting system or
are derived directly from such records by analysis or computation) with
the results obtained from inquiries, a reading of such general
accounting records and other procedures specified in such letter and
have found such dollar amounts, percentages and other financial
information to be in agreement with such results, except as otherwise
specified in such letter.
All financial statements and schedules included in material incorporated by
reference into the Prospectus shall be deemed included in the Prospectus for
purposes of this subsection.
(b) The Prospectus shall have been filed with the Commission in
accordance with the Rules and Regulations and Section 4(a) of this
Agreement. No stop order suspending the effectiveness of the Registration
Statement or of any part thereof shall have been issued and no proceedings
for that purpose shall have been instituted or, to the knowledge of the
Company or any Underwriter, shall be contemplated by the Commission.
(c) Subsequent to the execution of the Terms Agreement, there shall not
have occurred (i) any change, or any development or event involving a
prospective change, in the condition (financial or other), business,
properties or results of operations of the Company or its subsidiaries
which, in the judgment of a majority in interest of the Underwriters
including any Representatives, is material and adverse and makes it
impractical or inadvisable to proceed with completion of the public offering
or the sale of and payment for the Offered 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 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) any suspension or limitation of trading in securities generally on the
New York Stock Exchange, or any setting of minimum prices for trading on
such exchange, or any suspension of trading of any securities of the Company
on any exchange or in the over-the-counter market for a period of more than
two hours; (iv) any banking moratorium declared by U.S. Federal or New York
authorities; or (v) any outbreak or escalation of major hostilities in which
the United States is involved, any declaration of war by Congress or any
other substantial national or international calamity or emergency if, in the
judgment of a majority in interest of the Underwriters including any
Representatives, the effect of any such outbreak, escalation, declaration,
calamity or emergency makes it impractical or inadvisable to proceed with
completion of the public offering or the sale of and payment for the Offered
Securities.
(d) The Representatives shall have received an opinion, dated the Closing
Date, of the General Counsel of the Company named in the Prospectus, 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
Pennsylvania, with corporate power and authority to own its properties
and conduct its business as described in the Prospectus; and the Company
is duly qualified to do business as a foreign corporation in good
standing in all other jurisdictions in which its ownership or lease of
property or the conduct of its business requires such qualification;
(ii) The Indenture has been duly authorized, executed and delivered by
the Company and has been duly qualified under the Trust Indenture Act;
the Offered Securities have been duly authorized; the Offered Securities
other than any Contract Securities have been duly executed,
authenticated, issued and delivered; the Indenture and the Offered
Securities other than any Contract Securities constitute, and any
Contract Securities, when executed, authenticated, issued and delivered
in the manner provided in the Indenture and sold pursuant to Delayed
Delivery Contracts, will constitute, valid and legally binding
obligations of the Company enforceable 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; and the
Offered Securities other than any Contract Securities conform, and any
Contract Securities, when so issued and delivered and sold will conform,
to the description thereof contained in the Prospectus;
(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 by the Terms Agreement
(including the provisions of this Agreement) in connection with the
issuance or sale of the Offered Securities by the Company, except such
as have been obtained and made under the Act and the Trust Indenture Act
and such as may be required under state securities laws (in rendering
his opinion with respect to this Section 5(d)(iii) the Company's General
Counsel may rely as to matters of New York law, upon the opinion of
Xxxxxxxx & Xxxxxxxx referred to below);
(iv) The execution, delivery and performance of the Indenture, the
Terms Agreement (including the provisions of this Agreement) and any
Delayed Delivery Contracts and the issuance and sale of the Offered
Securities and compliance with the terms and provisions thereof will not
result in a breach or violation of any of the terms and provisions of,
or constitute a default under, any statute, any rule, regulation or
order of any governmental agency or body or any court having
jurisdiction over the Company or any subsidiary of the Company or any of
their properties, or any agreement or instrument to which the Company or
any such subsidiary is a party or by which the Company or any such
subsidiary is bound or to which any of the properties of the Company or
any such subsidiary is subject, or the charter or by-laws of the Company
or any such subsidiary, and the Company has full power and authority to
authorize, issue and sell the Offered Securities as contemplated by the
Terms Agreement (including the provisions of this Agreement);
(v) The Registration Statement has become effective under the Act,
the Prospectus was filed with the Commission pursuant to the
subparagraph of Rule 424(b) specified in such opinion on the date
specified therein, and, to the best of the knowledge of such counsel, no
stop order suspending the effectiveness of the Registration Statement or
any part thereof has been issued and no proceedings for that purpose
have been instituted or are pending or contemplated under the Act, and
the registration statement relating to the Registered Securities, as of
its effective date, the Registration Statement and the Prospectus, as of
the date of the Terms Agreement, and any amendment or supplement
thereto, as of its date, complied as to form in all material respects
with the requirements of the Act, the Trust Indenture Act and the Rules
and Regulations; such counsel have no reason to believe that such
registration statement, as of its effective date, the Registration
Statement, as of the date of the Terms Agreement or as of the Closing
Date, or any amendment thereto, as of its date or as of the Closing
Date, contained any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectus, as of
the date of the Terms Agreement or as of such Closing Date, or any
amendment or supplement thereto, as of its date or as of the Closing
Date, contained any untrue statement of a material fact or omitted to
state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; the descriptions in the Registration Statement and
Prospectus of statutes, legal and governmental proceedings and contracts
and other
documents are accurate and fairly present the information required to be
shown; and such counsel do not know of any legal or governmental
proceedings required to be described in the Prospectus which are not
described as required or of any contracts or documents of a character
required to be described in the Registration Statement or Prospectus or
to be filed as exhibits to the Registration Statement which are not
described and filed as required; it being understood that such counsel
need express no opinion as to the financial statements or other
financial data contained in the Registration Statement or the
Prospectus; and
(vi) The Terms Agreement (including the provisions of this Agreement)
and any Delayed Delivery Contracts have been duly authorized, executed
and delivered by the Company.
(e) The Representatives shall have received from Xxxxxxxx & Xxxxxxxx,
counsel for the Underwriters, such opinion or opinions, dated the Closing
Date, with respect to the incorporation of the Company, the validity of the
Offered Securities, the Registration Statement, the Prospectus and other
related matters as the Representatives may require, and the Company shall
have furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters. In rendering such
opinion, Xxxxxxxx & Xxxxxxxx may rely as to the incorporation of the Company
and all other matters governed by Pennsylvania law upon the opinion of the
Company's General Counsel referred to above.
(f) The Representatives shall have received a certificate, dated the
Closing Date, of the President or any Vice-President and a principal
financial or accounting officer of the Company in which such officers, to
the best of their knowledge after reasonable investigation, shall state that
the representations and warranties of the Company in this Agreement are true
and correct, that the Company has complied with all agreements and satisfied
all conditions on its part to be performed or satisfied hereunder at or
prior to the Closing Date, that no stop order suspending the effectiveness
of the Registration Statement or of any part thereof has been issued and no
proceedings for that purpose have been instituted or are contemplated by the
Commission and that, subsequent to the date of the most recent financial
statements in the Prospectus, there has been no material adverse change, nor
any development or event involving a prospective material adverse change, in
the condition (financial or other), business, properties or results of
operations of the Company and its subsidiaries taken as a whole except as
set forth in or contemplated by the Prospectus or as described in such
certificate.
(g) The Representatives shall have received a letter, dated the Closing
Date, of Deloitte & Touche LLP or another independent certified public
accounting firm reasonably satisfactory to the Representatives which meets
the requirements of subsection (a) of this Section, except that the
specified date referred to in such subsection will be a date not more than
five days prior to the Closing Date for the purposes of this subsection.
The Company will furnish the Representatives with such conformed copies of such
opinions, certificates, letters and documents as the Representatives reasonably
request. The Lead Underwriter may in its sole discretion waive on behalf of the
Underwriters compliance with any conditions to the obligations of the
Underwriters under this Agreement and the Terms Agreement.
6. Indemnification and Contribution. (a) The Company will indemnify and
hold harmless each Underwriter against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus or preliminary prospectus
supplement, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, and will reimburse each Underwriter
for any legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement in or omission or alleged omission from any of such
documents in reliance upon and in conformity with written information furnished
to the Company by any Underwriter through the Representatives, if any,
specifically for use therein.
(b) Each Underwriter will severally and not jointly indemnify and hold
harmless the Company against any losses, claims, damages or liabilities to which
the Company may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, the Prospectus, or any
amendment or supplement thereto, or any related preliminary prospectus or
preliminary prospectus supplement, or arise out of or are based upon the
omission or the alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Company by such
Underwriter through the Representatives, if any, specifically for use therein,
and will reimburse any legal or other expenses reasonably incurred by the
Company in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under subsection (a) or (b) above. In case any such action is brought against
any indemnified party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party (who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party will not be liable to such indemnified
party under this Section for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened action in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party unless such settlement includes an unconditional release of
such indemnified party from all liability on any claims that are the subject
matter of such action.
(d) If the indemnification provided for in this Section is unavailable or
insufficient to hold harmless an indemnified party under subsection (a) or (b)
above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand and the Underwriters on the other from the offering of the Securities
or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company on the one hand and the Underwriters on the other in connection with
the statements or omissions which resulted in such losses, claims, damages or
liabilities as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and the Underwriters on the
other shall be deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by the Company bear to
the total underwriting discounts and commissions received by the Underwriters.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The amount paid by an indemnified party as a
result of the losses, claims, damages or liabilities referred to in the first
sentence of this subsection (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any action or claim which is the subject of this
subsection (d). Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations in
this subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) The obligations of the Company under this Section shall be in addition
to any liability which the Company may otherwise have and shall extend, upon the
same terms and conditions, to each person, if any, who controls any Underwriter
within the meaning of the Act; and the obligations of the Underwriters under
this Section shall be in addition to any liability which the respective
Underwriters may otherwise have and shall extend, upon the same terms and
conditions, to each director of the Company, to each officer of the Company who
has signed the Registration Statement and to each person, if any, who controls
the Company within the meaning of the Act.
7. Default of Underwriters. If any Underwriter or Underwriters default in
their obligations to purchase Offered Securities under the Terms Agreement and
the aggregate principal amount of Offered Securities that such defaulting
Underwriter or Underwriters agreed but failed to purchase does not exceed 10% of
the total principal amount of Offered Securities, the Lead Underwriter may make
arrangements satisfactory to the Company for the purchase of such Offered
Securities by other persons, including any of the Underwriters, but if no such
arrangements are made by the Closing Date, the non-defaulting Underwriters shall
be obligated severally, in proportion to their respective commitments under the
Terms Agreement (including the provisions of this Agreement), to purchase the
Offered Securities that such defaulting Underwriters agreed but failed to
purchase. If any Underwriter or Underwriters so default and the aggregate
principal amount of Offered Securities with respect to which such default or
defaults occur exceeds 10% of the total principal amount of Offered Securities
and arrangements satisfactory to the Lead Underwriter and the Company for the
purchase of such Offered Securities by other persons are not made within 36
hours after such default, the Terms Agreement will terminate without liability
on the part of any non-defaulting Underwriter or the Company, except as provided
in Section 8. As used in this Agreement, the term "Underwriter" includes any
person substituted for an Underwriter under this Section. Nothing herein will
relieve a defaulting Underwriter from liability for its default. The respective
commitments of the several Underwriters for the purposes of this Section shall
be determined without regard to reduction in the respective Underwriters'
obligations to purchase the principal amounts of the Offered Securities set
forth opposite their names in the Terms Agreement as a result of Delayed
Delivery Contracts entered into by the Company.
8. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Company or its officers and of the several Underwriters set forth in or made
pursuant to the Terms Agreement (including the provisions of this Agreement)
will remain in full force and effect, regardless of any investigation, or
statement as to the results thereof, made by or on behalf of any Underwriter,
the Company or any of their respective representatives, officers or directors or
any controlling person, and will survive delivery of and payment for the Offered
Securities. If the Terms Agreement is terminated pursuant to Section 7 or if for
any reason the purchase of the Offered Securities by the Underwriters is not
consummated, the Company shall remain responsible for the expenses to be paid or
reimbursed by it pursuant to Section 4 and the respective obligations of the
Company and the Underwriters pursuant to Section 6 shall remain in effect. If
the purchase of the Offered Securities by the Underwriters is not consummated
for any reason other than solely because of the termination of the Terms
Agreement pursuant to Section 7, the Company will reimburse the Underwriters for
all out-of-pocket expenses (including fees and disbursements of counsel)
reasonably incurred by them in connection with the offering of the Offered
Securities.
9. Notices. All communications hereunder will be in writing and, if sent
to the Underwriters, will be mailed, delivered or telegraphed and confirmed to
them at their addresses furnished to the Company in writing for the purpose of
communications hereunder or, if sent to the Company, will be mailed, delivered
or telegraphed and confirmed to it at Xxx XXX Xxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx
00000, Attention: Senior Vice President, Finance.
10. Successors. The Terms Agreement (including the provisions of this
Agreement) will inure to the benefit of and be binding upon the Company and such
Underwriters as are identified in the Terms Agreement and their respective
successors and the officers and directors and controlling persons referred to in
Section 6, and no other person will have any right or obligation hereunder.
11. Representation of Underwriters. Any Representatives will act for the
several Underwriters in connection with the financing described in the Terms
Agreement, and any action under such Terms Agreement (including the provisions
of this Agreement) taken by the Representatives jointly or by the Lead
Underwriter will be binding upon all the Underwriters.
12. Counterparts. The Terms Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
13. Applicable Law. This Agreement and the Terms Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York.
The Company hereby submits to the non-exclusive jurisdiction of the Federal
and state courts in the Borough of Manhattan in The City of New York in any suit
or proceeding arising out of or relating to the Terms Agreement (including the
provisions of this Agreement) or the transactions contemplated thereby.
