1
Exhibit 1(a)
DRAFT
6/12/97
ARISTAR, INC.
DEBT SECURITIES
UNDERWRITING AGREEMENT BASIC PROVISIONS
__________ __, 1997
The basic provisions set forth herein are intended to be
incorporated by reference in a terms agreement (a "Terms Agreement") of the type
referred to in Paragraph 2 hereof. With respect to any particular Terms
Agreement, the Terms Agreement, together with the provisions hereof incorporated
therein by reference, is herein referred to as this "Agreement". Terms defined
in the Terms Agreement are used herein as therein defined.
The Company may issue and sell from time to time series of its
debt securities registered under the registration statement referred to in
Paragraph 1(a) hereof (the "Securities"). The Securities may have varying
designations, denominations, interest rates and payment dates, maturities,
redemption provisions and selling prices, with all such terms for any particular
series of Securities (together with any other terms relating to such series) to
be determined and set forth in the Terms Agreement relating to the series.
1. The Company represents, warrants and agrees that:
(a) A registration statement on Form S-3 (File No.
333-_______) with respect to the Securities has been prepared and filed by the
Company in conformity with the requirements of the Securities Act of 1933, as
amended (the "Act"), and the rules and regulations (the "Rules and Regulations")
of the Securities and Exchange Commission (the "Commission") thereunder and has
become effective. The Indenture pursuant to which the Underwritten Securities
will be issued (the "Indenture") has been qualified under the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act"). As used in this Agreement,
(i) "Preliminary Prospectus" means each prospectus (including all documents
incorporated therein by reference) included in such registration statement, and
amendments or supplements thereof, before it became effective under the Act,
including any prospectus filed with the Commission pursuant to Rule 424(a) of
the Rules and Regulations; (ii) "Registration Statement" means such
2
registration statement when it became effective under the Act, and as from time
to time amended or supplemented thereafter at the time of effectiveness of such
amendment or filing of such supplement with the Commission (including all
documents incorporated therein by reference); (iii) "Basic Prospectus" means the
prospectus (including all documents incorporated therein by reference) included
in the Registration Statement; and (iv) "Prospectus" means the Basic Prospectus,
together with any amendments or supplements (including in each case all
documents incorporated therein by reference), as filed with, or transmitted by a
means reasonably calculated to result in filing with, the Commission pursuant to
paragraph (b) of Rule 424 of the Rules and Regulations. The Commission has not
issued any order preventing or suspending the use of the Prospectus.
(b) The Registration Statement did, as of the time it became
effective, and will, as of each filing of the Company's most recent annual
report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and the Prospectus did, as of its issue
date, comply as to form in all material respects with the Act, the Exchange Act,
the Trust Indenture Act, and the rules and regulations of the Commission under
such Acts; the Indenture, including any amendments and supplements thereto,
conforms, and will conform, in all material respects with the requirements of
the Trust Indenture Act and the rules and regulations of the Commission
thereunder; the Registration Statement did not, as of the time it became
effective, and will not, as of each filing of the Company's most recent annual
report pursuant to Section 13(a) or 15(d) of the Exchange Act, 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; and
the Prospectus does not and will not as of the Delivery Date (as hereinafter
defined) contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided, however,
that the Company makes no representation or warranty as to information contained
in or omitted from the Registration Statement or the Prospectus in reliance upon
and in conformity with written information furnished to the Company through the
Representatives by or on behalf of any Underwriter specifically for inclusion
therein, or to any statements in or omissions from the statement of eligibility
and qualification on Form T-l of the Trustee under the Trust Indenture Act.
(c) Neither the Company nor any of its majority-owned
subsidiaries (as defined in Rule 405 of the Rules and Regulations, and
hereinafter called "Subsidiaries") is in violation of its corporate charter or
by-laws or in default in the observance or performance of any agreement,
indenture or instrument, the effect of which violation or default would be
material to the Company and its Subsidiaries taken as a whole; the execution,
delivery and performance of this Agreement and the Indenture and compliance by
the Company with the provisions of the Underwritten Securities and the Indenture
have been duly authorized by all necessary corporate action and will not
conflict with, result in the creation or imposition of any lien, charge or
encumbrance upon any of the assets of the Company or any of its Subsidiaries
pursuant to the terms of, or constitute a default in the observance or
performance of, any agreement, indenture or instrument, or result in a violation
of the corporate charter or by-laws of the Company or any of its Subsidiaries or
any order, statute, rule or regulation of any court or governmental agency
having jurisdiction over the Company, any of its Subsidiaries or their
respective properties, the effect of which conflict, lien, charge, encumbrance,
default or
-2-
3
violation would be material to the Company and its Subsidiaries taken as a
whole; and except as required by the Act, the Trust Indenture Act, the Exchange
Act and applicable state securities laws, no consent, authorization or order of,
or filing or registration with, any court or governmental agency is required for
the execution, delivery and performance of this Agreement or the Indenture.
(d) From the dates as of which information is given in the
Registration Statement and the Prospectus, and except as described therein, (i)
there has not been any material adverse change in the financial condition or
results of operations of the Company and its Subsidiaries taken as a whole and
(ii) there has been no dividend or distribution of any kind declared, paid or
made by the Company on any class of its capital stock. There is no financial
support agreement between the Company and Great Western Financial Corporation
("Great Western") or any affiliate thereof respecting the business relationship
between the two parties.
(e) To the best knowledge of the Company, Price Waterhouse
LLP, whose report appears in the Company's Annual Report on Form 10-K
incorporated by reference in the Prospectus, are independent public accountants
as required by the Act and the Rules and Regulations.
(f) (i) As of the Delivery Date, the Indenture will have been
duly executed and delivered and validly authorized by the Company and will
constitute the legally binding obligation of the Company enforceable in
accordance with its terms (except as enforcement thereof may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
other laws relating to or affecting creditors' rights generally, by general
equity principles or by an implied covenant of good faith and fair dealing),
(ii) the Underwritten Securities have been validly authorized for issuance and
sale pursuant to this Agreement and, upon execution, authentication, delivery
and payment therefor as provided in this Agreement and the Indenture, will be
validly issued and outstanding, and will constitute legally binding obligations
of the Company enforceable in accordance with their terms (except as enforcement
of the Underwritten Securities may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or other laws relating to or
affecting creditors' rights generally, by general equity principles or by an
implied covenant of good faith and fair dealing) and entitled to the benefits of
the Indenture, and (iii) the Underwritten Securities and the Indenture conform
in all material respects to the descriptions thereof contained in the
Prospectus.
(g) The Company has been duly incorporated, is validly
existing and is in good standing under the laws of its jurisdiction of
incorporation; each of the Subsidiaries has been duly incorporated, is validly
existing and is in good standing under the laws of their respective
jurisdictions of incorporation (except where the failure to be so incorporated
or to be in good standing would not have a material adverse effect on the
Company and its Subsidiaries taken as a whole); to the best knowledge of the
Company, the Company and each of its Subsidiaries are duly qualified to do
business and in good standing as foreign corporations in each jurisdiction in
which their respective ownership or leasing of property or the conduct of their
respective businesses requires such qualification, and have the corporate power
and authority necessary to own, lease and operate their respective properties
and to conduct the businesses in which they are engaged, except where the
failure to so qualify or to have such power and authority would not have a
material adverse effect on the Company and its Subsidiaries taken as a whole;
and
-3-
4
the capital stock of each Subsidiary is owned by the Company, directly or
through Subsidiaries, free and clear of any mortgage, pledge, lien, claim or
encumbrance.
(h) Except as described in the Prospectus, there is no
material litigation or governmental proceeding pending or, to the knowledge of
the Company, threatened against the Company or any of its Subsidiaries which
would result in any material adverse change in the financial condition or
results of operations of the Company and its Subsidiaries taken as a whole or
which is required to be disclosed in the Registration Statement.
(i) The financial statements filed as part of the Registration
Statement or included or incorporated in any Preliminary Prospectus or the
Prospectus present, and will present as of the Delivery Date, fairly the
financial condition and results of operations of the entities purported to be
shown thereby, at the dates and for the periods indicated, and have been
prepared in conformity with generally accepted accounting principles applied on
a consistent basis throughout the periods involved; and the supporting schedules
included or incorporated in the Registration Statement present fairly the
information required to be stated therein.
(j) The documents incorporated by reference into any
Preliminary Prospectus or the Prospectus have been, and any documents
subsequently incorporated by reference will be, as of the applicable filing
date, prepared by the Company in conformity with the applicable requirements of
the Act and the Rules and Regulations and the Exchange Act and the rules and
regulations of the Commission thereunder; and such documents have been or will
be as of the Delivery Date timely filed as required thereby.
(k) There are no contracts or other documents which are
required to be filed as exhibits to the Registration Statement by the Act or by
the Rules and Regulations, or which were required to be filed as exhibits to any
document incorporated by reference in the Prospectus by the Exchange Act or the
rules and regulations of the Commission thereunder, which have not been filed as
exhibits to the Registration Statement or to such documents, or incorporated
therein by reference as permitted by the Rules and Regulations or the rules and
regulations of the Commission under the Exchange Act, as the case may be.
(l) All of the authorized, issued and outstanding capital
stock of the Company has been duly authorized and validly issued and is fully
paid and non-assessable and is owned, directly or indirectly, by Great Western.
(m) The Company and each of its Subsidiaries have all
licenses, approvals and consents for the conduct of their respective businesses,
the failure of which to have would have a material adverse effect on the
business of the Company and the Subsidiaries taken as a whole.
2. The obligation of the Underwriters to purchase, and the
Company to sell, the Underwritten Securities is evidenced by a Terms Agreement
delivered at the time the Company determines to sell the Underwritten
Securities. The Terms Agreement specifies the firm or firms which will be
Underwriters, the principal amount of the Underwritten Securities to be
purchased by each Underwriter, the purchase price to be paid by the Underwriters
for the Underwritten Securities, the public offering price, if any, of the
Underwritten Securities, certain terms thereof and the Underwriters'
compensation therefor, any of the terms of the Underwritten
-4-
5
Securities not already specified in the Indenture (including, but not limited
to, designations, denominations, interest rate or rates (and method of
calculation thereof) and payment dates, maturity, redemption provisions and
sinking fund requirements) and the written information that has been furnished
to the Company through the Representatives by or on behalf of any Underwriter
specifically for inclusion in the Registration Statement or the Prospectus. The
Terms Agreement also specifies any details of the terms of the offering which
should be reflected in a post-effective amendment to the Registration Statement
or the supplement to the Prospectus relating to the offering of the Underwritten
Securities.
3. The Company shall not be obligated to deliver any
Underwritten Securities except upon payment for all the Underwritten Securities
to be purchased pursuant to this Agreement as hereinafter provided.
4. If any Underwriter defaults in the performance of its
obligations under this Agreement, the remaining non-defaulting Underwriters
shall be obligated to purchase the Underwritten Securities which the defaulting
Underwriter agreed but failed to purchase in the respective proportions which
the principal amount of Underwritten Securities set forth in the Terms Agreement
to be purchased by each remaining non-defaulting Underwriter set forth therein
bears to the aggregate principal amount of Underwritten Securities set forth
therein to be purchased by all the remaining non-defaulting Underwriters;
provided, however, that the remaining non-defaulting Underwriters shall not be
obligated to purchase any Underwritten Securities if the aggregate principal
amount of Underwritten Securities which the defaulting Underwriter or
Underwriters agreed but failed to purchase exceeds 9.09% of the total principal
amount of Underwritten Securities, and any remaining non-defaulting Underwriter
shall not be obligated to purchase more than 110% of the principal amount of
Underwritten Securities set forth in the Terms Agreement to be purchased by it.
If the foregoing maximums are exceeded, the remaining non-defaulting
Underwriters, or those other underwriters satisfactory to the Representatives
who so agree, shall have the right, but shall not be obligated, to purchase, in
such proportion as may be agreed upon among them, all the Underwritten
Securities. If the remaining Underwriters or other underwriters satisfactory to
the Representatives do not elect to purchase the Underwritten Securities which
the defaulting Underwriter or Underwriters agreed but failed to purchase, this
Agreement shall terminate without liability on the part of any non-defaulting
Underwriter or the Company, except that the Company will continue to be liable
for the payment of expenses as set forth in Paragraphs 6(k) and 10 hereof.
Nothing contained in this Paragraph shall relieve a defaulting
Underwriter of any liability it may have to the Company for damages caused by
its default. If other underwriters are obligated or agree to purchase the
Underwritten Securities of a defaulting or withdrawing Underwriter, either the
Representatives or the Company may postpone the Delivery Date for up to seven
full business days in order to effect any changes that in the opinion of counsel
for the Company or counsel for the Underwriters may be necessary in the
Registration Statement, the Prospectus or in any other document or arrangement.
5. Delivery of and payment for the Underwritten Securities
shall be made at the office of the Representatives at such address and time as
may be specified in the Terms Agreement. This date and time are sometimes
referred to as the "Delivery Date". On the Delivery Date the Company shall
deliver the Underwritten Securities to the Representatives
-5-
6
through the facilities of The Depository Trust Company, New York, New York, for
the account of each Underwriter against payment to the Company of the purchase
price by wire transfer of immediately available funds. Time shall be of the
essence, and delivery at the time and place specified pursuant to this Agreement
is a further condition of the obligation of each Underwriter hereunder. Upon
delivery, the Underwritten Securities shall be in definitive fully registered
form and in such denominations and registered in such names as the
Representatives shall request in writing not less than two full business days
prior to the Delivery Date. For the purpose of expediting the checking of the
Underwritten Securities, the Company shall make the Underwritten Securities
available for inspection by the Representatives in New York, New York (or such
other place as may be specified by the Representatives) not later than 2:00
P.M., New York City time, at least one business day prior to the Delivery Date.
6. The Company covenants and agrees with the Representatives
as follows:
(a) To furnish promptly to the Representatives and to their
counsel a signed copy of the Registration Statement as originally filed and each
amendment thereto, and a copy of each Prospectus filed with the Commission,
including all supplements thereto and all documents incorporated therein by
reference and all consents and exhibits filed therewith;
(b) To deliver promptly to the Representatives such number of
the following documents as they may reasonably request: (i) conformed copies of
the Registration Statement (excluding exhibits other than the computation of the
ratio of earnings to fixed charges, the Indenture and this Agreement), (ii) each
Preliminary Prospectus, the Basic Prospectus and the Prospectus and any
supplement thereto and (iii) any documents incorporated by reference in the
Prospectus;
(c) If, during any period in which, in the opinion of counsel
for the Representatives, a prospectus relating to the Underwritten Securities is
required to be delivered under the Act, any event occurs as a result of which
the Prospectus would include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading, or if it
is necessary at any time to amend the Prospectus to comply with the Act, to
immediately notify the Representatives and to promptly prepare and file (subject
to (e) below) with the Commission an amendment or supplement which will effect
such compliance (provided, however, that if such amendment or supplement of the
Prospectus shall be filed after the nine-month period commencing on the date
hereof, the Representatives shall pay the costs incurred in connection with the
preparation of such amendment or supplement);
(d) To timely file (subject to (e) below) with the Commission
during any period in which, in the opinion of counsel for the Representatives,
any Prospectus is required by law to be delivered in connection with sales of
the Underwritten Securities, all documents (and any amendments to previously
filed documents) required to be filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act;
(e) Prior to filing with the Commission any (i) amendment or
supplement to the Registration Statement, (ii) Prospectus or any amendment or
supplement thereto or (iii) document incorporated by reference in any of the
foregoing or any amendment of or supplement
-6-
7
to any such incorporated document, to furnish a copy thereof to the
Representatives and their counsel and to provide the Representatives an
opportunity to comment thereon;
(f) To advise the Representatives immediately (i) when any
post-effective amendment to the Registration Statement relating to or covering
the Underwritten Securities becomes effective, (ii) of any request or proposed
request by the Commission for an amendment or supplement to the Registration
Statement, to the Prospectus, to any document incorporated by reference in any
of the foregoing or for any additional information, (iii) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or any order directed to the Prospectus or any document incorporated
therein by reference or the initiation or threat of any stop order proceeding or
of any challenge to the accuracy or adequacy of any document incorporated by
reference in the Prospectus, (iv) of receipt by the Company of any notification
with respect to the suspension of the qualification of the Underwritten
Securities for sale in any jurisdiction or the initiation or threat of any
proceeding for that purpose and (v) of the happening of any event which makes
untrue any statement of a material fact made in the Registration Statement or
the Prospectus or which requires the making of a change in the Registration
Statement or the Prospectus in order to make any statement of a material fact
therein not misleading;
(g) If the Commission shall issue a stop order suspending the
effectiveness of the Registration Statement, to make every reasonable effort to
obtain the lifting of that order at the earliest possible time;
(h) To make generally available to its security holders and to
deliver to the Representatives, in each case as soon as practicable, an earnings
statement (in form complying with the provisions of Section 11(a) of the Act and
Rule 158 thereunder and which need not be certified by independent certified
public accountants unless required by the Act or the Rules and Regulations)
covering the period beginning not later than the first day of the fiscal quarter
next following each date which (i) under Section 11(a) of the Act and the Rules
and Regulations is an "effective date" (as defined in Rule 158) of the
Registration Statement for purposes of said Section 11(a), and (ii) is not later
than the Delivery Date;
(i) For one year after the Delivery Date, to furnish to the
Representatives, promptly after the time the Company makes the same available to
others, copies of all public reports or releases and all reports and financial
statements furnished by the Company to any securities exchange pursuant to
requirements of or agreements with such exchange or to the Commission pursuant
to the Exchange Act or any rule or regulation of the Commission thereunder;
(j) To endeavor, in cooperation with the Representatives, to
qualify the Underwritten Securities for offering and sale under the applicable
securities laws of such states and other jurisdictions of the United States as
the Representatives may reasonably designate, and to maintain such
qualifications in effect for as long as may be reasonably required for the
distribution of the Underwritten Securities. The Company will file such
statements and reports as may be required by the laws of each jurisdiction in
which the Underwritten Securities have been qualified as above provided;
-7-
8
(k) To pay (i) the costs incident to the authorization,
issuance, sale and delivery of the Underwritten Securities and any taxes payable
in that connection, (ii) the costs incident to the preparation, printing and
filing under the Act of the Registration Statement and any amendments,
supplements and exhibits thereto, (iii) the costs incident to the preparation,
printing and filing of any document and any amendments and exhibits thereto
required to be filed by the Company under the Exchange Act, (iv) the costs of
distributing the Registration Statement, as originally filed, and each amendment
and post-effective amendment thereof (including exhibits), any Preliminary
Prospectus, the Basic Prospectus, the Prospectus, any supplement or amendment to
the Prospectus and any documents incorporated by reference in any of the
foregoing documents, (v) the costs of distributing the terms of the agreement
relating to the organization of the underwriting syndicate to the Underwriters
by mail, telex or other means of communication, (vi) the costs of typing this
Agreement, (vii) the costs and fees in connection with the listing of the
Securities on any securities exchange, (viii) the costs of any filings with the
National Association of Securities Dealers, Inc., (ix) the fees and
disbursements of counsel to the Company, (x) the fees paid to rating agencies in
connection with the rating of the Securities, including the Underwritten
Securities, (xi) the fees and expenses of qualifying the Securities, including
the Underwritten Securities, under the securities laws of the several
jurisdictions as provided in this Paragraph, and of preparing and printing a
Blue Sky Memorandum and a memorandum concerning the legality of the Securities,
including the Underwritten Securities, as an investment (including fees and
expenses of counsel to the Representatives in connection therewith), and (xii)
all other costs and expenses incident to the performance of the Company's
obligations under this Agreement; provided, that, except as provided in this
Paragraph and in Paragraph 10 hereof, the Underwriters shall pay their own costs
and expenses, including the fees and expenses of their counsel, any transfer
taxes on the Underwritten Securities which they may sell and the expenses of
advertising any offering of the Underwritten Securities made by the
Underwriters; and
(l) During the period beginning on the date of the Terms
Agreement and continuing to the Delivery Date, without the prior consent of the
Representatives, not to offer or sell, or enter into any agreement to sell, any
debt securities of the Company other than borrowings under the Company's
revolving credit agreements and lines of credit, the private placement of
securities, borrowings from Great Western or any affiliate thereof and issuances
in the ordinary course of business of the Company's commercial paper.
7. (a) The Company shall indemnify and hold harmless each
Underwriter, each other person, if any, who is participating with the
Underwriters in the distribution of the Underwritten Securities who is an
"underwriter" within the meaning of Section 2(11) of the Act with respect to the
distribution of the Underwritten Securities (the "Participants") and each
person, if any, who controls any Underwriter or any Participant within the
meaning of Section 15 of the Act from and against any loss, claim, damage or
liability, joint or several, and any action in respect thereof, to which such
Underwriter or such Participant or controlling person may become subject, under
the Act, the Exchange Act or other federal or state statutory law or regulation,
at common law or otherwise, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon, any untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or arises out of, or is 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
-8-
9
shall reimburse each Underwriter, each Participant and each controlling person
for any legal and other expenses reasonably incurred, as incurred, by such
Underwriter or such Participant or controlling person in investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action; provided, however, (i) that the Company shall not be liable in any
such case to the extent that any such loss, claim, damage, liability or action
arises out of, or is based upon, any untrue statement or alleged untrue
statement or omission or alleged omission made in any Preliminary Prospectus,
the Registration Statement or the Prospectus in reliance upon and in conformity
with written information furnished to the Company through the Representatives by
or on behalf of any Underwriter specifically for inclusion therein; and (ii)
that with respect to any Preliminary Prospectus or Prospectus, the foregoing
indemnification shall not inure to the benefit of any Underwriter, any
Participant or any person controlling that Underwriter or Participant on account
of any loss, claim, damage, liability or action arising from the purchase of
Securities by any person from that Underwriter or Participant, if that
Underwriter or Participant in fact failed to send or give a copy of the
Prospectus provided by the Company in accordance with Paragraph 6(b) hereof (as
such Prospectus may then be amended or supplemented, in each case exclusive of
the documents incorporated therein by reference) to that person within the time
required by the Act; provided, however, that subparagraph (ii) above shall not
apply (X) where such loss, claim, damage, liability or action arises out of, or
is based upon, any untrue statement or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact in such
Preliminary Prospectus or Prospectus and such untrue statement, alleged untrue
statement, omission or alleged omission, was not corrected in the Prospectus (or
the amendment or supplement thereto) or (Y) where the failure to deliver such
Prospectus (or the amendment or supplement thereto) resulted from noncompliance
by the Company with Paragraph 6(b) hereof. The foregoing indemnity agreement is
in addition to any liability which the Company may otherwise have to any
Underwriter, any Participant or controlling person.
(b) Each Underwriter, severally and not jointly, shall
indemnify and hold harmless the Company, each of its directors, each of its
officers who signed the Registration Statement and any person who controls the
Company within the meaning of Section 15 of the Act from and against any loss,
claim, damage or liability, joint or several, and any action in respect thereof,
to which the Company or any such director, officer or controlling person may
become subject, under the Act, the Exchange Act or federal or state statutory
law or regulation, at common law or otherwise, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon, any untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or arises
out of, or is 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, but in each case only to the extent that the 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 through the Representatives by or on behalf of that Underwriter
specifically for inclusion therein, and shall reimburse the Company or any such
director, officer or controlling person for any legal and other expenses
reasonably incurred, as incurred, by the Company or any such director, officer
or controlling person in investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action. The foregoing
indemnity agreement is in addition to any liability which any Underwriter may
otherwise have to the Company or any of its directors, officers or controlling
persons.
-9-
10
(c) Promptly after receipt by an indemnified party under this
Paragraph of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Paragraph, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have to an indemnified party otherwise than under this
Paragraph except to the extent that it has been prejudiced in any material
respect by such failure or from any liability which it may have otherwise. If
any such claim or action shall be brought against an indemnified party, and it
shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein, and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party. After notice from
the indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Paragraph 7 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, any
indemnified party shall have the right to employ separate counsel in any such
claim or action and to participate in the defense thereof but the fees and
expenses of such counsel shall be at the expense of such indemnified party
unless (i) the employment thereof has been specifically authorized by the
indemnifying party in writing, (ii) such indemnified party shall have been
advised by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
indemnifying party and in the reasonable judgment of such counsel it is
advisable for such indemnified party to employ separate counsel or (iii) the
indemnifying party has failed to assume the defense of such claim or action and
employ counsel reasonably satisfactory to the indemnified party, in which case,
if such indemnified party notifies the indemnifying party in writing that it
elects to employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such claim
or action on behalf of such indemnified party, it being understood, however,
that the indemnifying party shall not, in connection with any one such claim or
action or separate but substantially similar or related claims or actions in the
same jurisdiction arising out of the same general allegations or circumstances,
be liable for the reasonable fees and expenses of more than one separate firm of
attorneys at any time for all such indemnified parties, which firm shall be
designated in writing by the Representatives, if the indemnified parties under
this Paragraph consist of any Underwriter, any Participant or any of their
respective controlling persons, or by the Company, if the indemnified parties
under this Paragraph consist of the Company or any of its directors, officers or
controlling persons. Each indemnified party, as a condition of the indemnity
agreements contained in Paragraph 7(a) and 7(b) hereof, shall use its best
efforts to cooperate with the indemnifying party in the defense of any such
claim or action. The indemnifying party shall not be liable for any settlement
of any such claim or action effected without its written consent (which consent
shall not be unreasonably withheld), but if settled with its written consent or
if there be a final judgment in favor of the plaintiff in any such claim or
action, the indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of such
settlement or judgment.
(d) If the indemnification provided for in this Paragraph
shall for any reason be unavailable to an indemnified party under Paragraph 7(a)
or 7(b) hereof in respect of any loss, claim, damage or liability, or any action
in respect thereof, referred to therein, then each
-10-
11
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Company on the one hand and the Underwriters and the
Participants on the other from the offering of the Underwritten 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 and the Participants on the
other with respect to the statements or omissions which resulted in such loss,
claim, damage or liability, or action in respect thereof, as well as any other
relevant equitable considerations. The relative benefits received by the Company
on the one hand and the Underwriters and the Participants on the other with
respect to such offering shall be deemed to be in the same proportion as the
total net proceeds from the offering of the Underwritten Securities (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriters and the Participants with
respect to such offering in each case as set forth in the table on the cover
page of the Prospectus. The relative fault shall be determined by reference to
whether the 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
Company or the Underwriters, the intent of the parties and their relative
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 contributions pursuant to this Paragraph 7(d) were to
be determined by pro rata allocation or by any other method of allocation (even
if the Underwriters and the Participants were treated as one entity for such
purpose) which does not take into account the equitable considerations referred
to herein. The amount paid or payable by an indemnified party as a result of the
loss, claim, damage or liability, or action in respect thereof, referred to
above in this Paragraph 7(d) shall be deemed to include, for purposes of this
Paragraph 7(d), any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Paragraph 7(d), no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Underwritten 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 paid or become liable to pay by
reason of any 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 to contribute as provided in this Paragraph 7(d) are several in
proportion to their respective underwriting obligations and not joint.
(e) The agreements contained in this Paragraph and the
representations, warranties and agreements of the Company contained elsewhere in
this Agreement, or contained in certificates of officers of the Company
submitted pursuant hereto, shall survive the delivery of and payment for the
Underwritten Securities and shall remain operative and in full force and effect,
regardless of the termination of this Agreement or any investigation made on
behalf of any Underwriter or any person controlling any Underwriter or by or on
behalf of the Company.
-11-
12
8. The obligations of the Underwriters under this Agreement
may be terminated by the Representatives, in their absolute discretion, by
notice given to and received by the Company prior to the delivery of and payment
for the Underwritten Securities, if, during the period beginning on the date of
the Terms Agreement to and including the Delivery Date, (a) trading in
securities generally on the New York Stock Exchange is suspended or minimum
prices are established on that Exchange, or (b) a banking moratorium is declared
by either Federal or New York State authorities, or (c) the United States is or
becomes engaged in hostilities which have resulted in the declaration of a
national emergency, or (d) the rating of any of the Company's debt securities
shall have been lowered by either Xxxxx'x Investors Services, Inc. or Standard &
Poor's or either of such rating agencies shall have publicly announced that it
has placed any of the Company's debt securities on what is commonly termed a
"watch list" for possible downgrading.
9. The respective obligations of the Underwriters under this
Agreement with respect to the Underwritten Securities are subject to the
accuracy in all material respects, on the date of the Terms Agreement and on the
Delivery Date, of the representations and warranties of the Company contained
herein, to the accuracy of the statements of the Company's officers made in any
certificate furnished pursuant to the provisions hereof, to the performance and
observance by the Company in all material respects of all covenants and
agreements contained herein, and to each of the following additional terms and
conditions applicable to the Underwritten Securities:
(a) At or before the Delivery Date, no stop order suspending
the effectiveness of the Registration Statement shall have been issued and no
proceeding for that purpose shall have been initiated or threatened by the
Commission, nor any order directed to any document incorporated by reference in
any Prospectus shall have been initiated or threatened by the Commission.
(b) Xxxxxxx X. Xxxxx, Senior Vice President, Secretary and
General Counsel of the Company, shall have furnished to the Representatives his
opinion addressed to the Underwriters and dated the Delivery Date, in form and
substance reasonably satisfactory to the Representatives and their counsel, to
the effect that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
the State of Delaware;
(ii) The Company has the corporate power and
authority necessary to own, lease and operate its properties and
conduct its business as described in the Registration Statement;
(iii) To the best of his knowledge, the Company is
duly qualified to do business and in good standing as a foreign
corporation in each jurisdiction in which its conduct of business or
its ownership or leasing of properties requires such qualification and
in which the failure to be so qualified would have a material adverse
effect on the Company and its Subsidiaries taken as a whole;
-12-
13
(iv) All of the issued and outstanding capital stock
of each Subsidiary has been duly authorized and validly issued and is
fully paid and non-assessable, and, except as described in the
Registration Statement, all of such capital stock is owned by the
Company, directly or through Subsidiaries, free and clear of any
mortgage, pledge, lien, claim or encumbrance;
(v) The authorized, issued and outstanding capital
stock of the Company is as set forth in the Prospectus and the shares
of the Company's issued and outstanding common stock, $1.00 par value,
set forth therein are owned, directly or indirectly, by Great Western;
(vi) Such counsel does not know of any material
litigation or any governmental proceeding pending or threatened against
the Company or any of its Subsidiaries required to be disclosed in the
Prospectus which is not disclosed;
(vii) Such counsel does not know of any contracts or
other documents which are required to be filed as exhibits to the
Registration Statement by the Act or by the Rules and Regulations, or
which are required to be filed by the Exchange Act or the rules and
regulations of the Commission thereunder as exhibits to any document
incorporated by reference in the Prospectus, which have not been filed
as exhibits to the Registration Statement or to such document, or
incorporated therein by reference as permitted by the Rules and
Regulations or the rules and regulations of the Commission under the
Exchange Act, as the case may be;
(viii) To the best of such counsel's knowledge, the
Company is not in violation of its corporate charter or by-laws, none
of the Subsidiaries are in violation of their corporate charters or
by-laws, and neither the Company nor any of the Subsidiaries are in
default in the observance or performance of any agreement, indenture or
instrument, the effect of which violation or default would be material
to the Company and the Subsidiaries taken as a whole; and
(ix) To the best of his knowledge, the execution,
delivery and performance of this Agreement and compliance by the
Company with the provisions of the Underwritten Securities and the
Indenture will not conflict with, or result in the creation or
imposition of any lien, charge or encumbrance upon any of the assets of
the Company or any of the Subsidiaries pursuant to the terms of, or
constitute a default in the observance or performance of, any material
agreement, indenture or instrument, or result in a violation of the
corporate charter or by-laws of the Company or any of the Subsidiaries
or any order, statute, rule or regulation of any court or governmental
agency having jurisdiction over the Company, any of the Subsidiaries or
their respective properties, the effect of which conflict, lien,
charge, encumbrance, default or violation would be material to the
Company and the Subsidiaries taken as a whole; and no consent,
authorization or order of, or filing or registration with, any court or
governmental agency is required for the execution, delivery and
performance by the Company of this Agreement except such as may be
required by the Act, the Trust Indenture Act, the Exchange Act and
state securities laws.
-13-
14
(c) Winthrop, Stimson, Xxxxxx & Xxxxxxx, counsel to the
Company, shall have furnished to the Representatives their opinion addressed to
the Underwriters and dated the Delivery Date, in form and substance reasonably
satisfactory to the Representatives and their counsel, to the effect that:
(i) This Agreement has been duly authorized, executed
and delivered by the Company;
(ii) The Indenture has been duly authorized, executed
and delivered by the Company and constitutes a valid and binding
agreement of the Company, enforceable in accordance with its terms,
except as may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other laws relating to or
affecting creditors' rights generally, by general equity principles
(regardless of whether enforceability is considered in a proceeding in
equity or at law) and by an implied covenant of good faith and fair
dealing;
(iii) The Underwritten Securities are in a form
contemplated by the Indenture and approved by the board of directors of
the Company and have been duly authorized by all necessary corporate
action and, when executed and authenticated as specified in the
Indenture and delivered against payment therefor in accordance with
this Agreement, will be valid and binding obligations of the Company,
enforceable in accordance with their terms, except as may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other laws relating to or affecting creditors' rights
generally, by general equity principles (regardless of whether
enforceability is considered in a proceeding in equity or at law) and
by an implied covenant of good faith and fair dealing;
(iv) The Underwritten Securities and the Indenture
conform in all material respects to the statements concerning them in
the Registration Statement and the Prospectus;
(v) The Indenture is qualified under, and complies as
to form in all material respects with, the Trust Indenture Act;
(vi) The Registration Statement is effective under
the Act; no stop order suspending its effectiveness has been issued,
and, to the knowledge of such counsel, no proceeding for that purpose
is pending or threatened by the Commission; and no order directed to
any document incorporated by reference in the Prospectus has been
issued by the Commission;
(vii) The Registration Statement, as of the time it
became effective, and the Prospectus, as of its issue date (except
that, in each case, no opinion need be expressed as to the financial
statements and schedules and other financial and statistical data
contained or incorporated by reference therein), complied as to form in
all material respects with the requirements of the Act and the Trust
Indenture Act and the rules and regulations of the Commission under
said Acts, and the documents incorporated by reference in the
Prospectus, when filed with the Commission (except that no opinion need
-14-
15
be expressed as to the financial statements and schedules and other
financial and statistical data contained or incorporated by reference
therein), complied as to form in all material respects with the
applicable requirements of the Exchange Act and the rules and
regulations of the Commission thereunder; and (except that no opinion
need be expressed as to the financial statements and schedules and
other financial and statistical data contained or incorporated by
reference therein) nothing has come to the attention of such counsel to
lead them to believe that the Registration Statement, as of the time it
became effective, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that the
Prospectus, as of the Delivery Date, contained any untrue statement of
a material fact or omitted 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.
(d) All corporate proceedings and other legal matters incident
to the authorization and validity of this Agreement, and the authorization, form
and validity of the Underwritten Securities, the Indenture, the Registration
Statement, the Prospectus and any supplement, amendment or incorporated
document, other than financial statements and other financial data, and all
other legal matters and transactions contemplated by this Agreement shall be
reasonably satisfactory in all material respects to Xxxxxxx Xxxxxxx & Xxxxxxxx,
counsel for the Underwriters; the Company shall have furnished to such counsel
all documents and information that they may reasonably request to enable them to
pass upon such matters; and Xxxxxxx Xxxxxxx & Xxxxxxxx shall have furnished to
the Representatives on the Delivery Date such opinions with respect to such
matters as the Representatives may reasonably request.
(e) (i) Neither the Company nor any of the Subsidiaries shall
be in default (nor shall an event have occurred which, with notice or lapse of
time, or both, would constitute a default) under any provision of any instrument
relating to any outstanding indebtedness of the Company or any of the
Subsidiaries (except where such default would not have a material adverse effect
on the Company and its Subsidiaries taken as a whole) and (ii) no material
amount of the assets of the Company or of the Company and its Subsidiaries taken
as a whole shall have been pledged or mortgaged, except as referred to in the
Registration Statement and Prospectus, as amended or supplemented.
(f) The Company shall have furnished to the Representatives on
the Delivery Date a certificate, dated the Delivery Date, of its President, its
Chief Financial Officer or its Treasurer to the effect that:
(i) The representations, warranties and agreements of
the Company in Paragraph 1 hereof are true and correct in all material
respects as of the Delivery Date; the Company has complied in all
material respects with all its agreements contained herein and
satisfied in all material respects all conditions on its part to be
performed and satisfied at or prior to the date of such certificate
(except that no certificate need be given in respect of the conditions
set forth in Paragraphs 9(d) and 9(g) hereof); and the conditions set
forth in Paragraph 9(a) hereof which are to be fulfilled at or prior to
the date of such certificate have been fulfilled in all material
respects; and
-15-
16
(ii) He has reviewed the Registration Statement and
the Prospectus and, in his opinion, (A) the Registration Statement, as
of the time it became effective, did 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, (B)
the Prospectus does not contain an untrue statement of a material fact
or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, and (C) since the time the Registration
Statement became effective there has not occurred any event required to
be set forth in an amended or supplemented prospectus which has not
been so set forth.
(g) The Company shall have furnished to the Representatives on
the Delivery Date a letter in form and substance reasonably satisfactory to the
Representatives in all respects from Price Waterhouse LLP, addressed to the
Underwriters and dated as of the Delivery Date, of the type described in the
American Institute of Certified Public Accountants' Statement on Auditing
Standards No. 72 and covering such specified financial statement items and
procedures as the Representatives may reasonably request.
(h) No order suspending the sale of the Underwritten
Securities in any jurisdiction material to the distribution of the Underwritten
Securities as contemplated hereby and designated by the Representatives pursuant
to Paragraph 6(j) hereof shall have been issued or in existence, and no
proceeding for that purpose shall have been instituted or, to the knowledge of
the Underwriters or the Company, shall be contemplated.
(i) No Underwriter shall have discovered and disclosed to the
Company on or prior to the Delivery Date that the Registration Statement, the
Prospectus and any amendments or supplements thereto, taken as a whole, contain
an untrue statement of a fact which, in the opinion of counsel to the
Representatives, is material or omits to state a fact which, in the opinion of
such counsel, is material and is required to be stated therein or is necessary
to make the statements therein not misleading.
(j) During the period from the date of the Terms Agreement to
and including the Delivery Date, there shall have occurred no material adverse
change in the financial condition or results of operations of the Company and
its Subsidiaries taken as a whole.
10. If the Company shall fail to tender the Underwritten
Securities for delivery to the Underwriters for any reason permitted under this
Agreement, or if the Underwriters shall decline to purchase the Underwritten
Securities for any reason permitted under this Agreement, the Company shall
reimburse the Underwriters for the reasonable fees and expenses of their counsel
and for such other reasonable out-of-pocket expenses as shall have been incurred
by them in connection with this Agreement and the proposed purchase of
Underwritten Securities, and upon demand the Company shall pay the full amount
thereof to the Representatives. If this Agreement is terminated pursuant to
Paragraph 4 hereof by reason of the default of one or more Underwriters, the
Company shall not be obligated to reimburse any defaulting Underwriter on
account of those expenses.
11. The Company shall be entitled to act and rely upon any
request, consent, notice or agreement on behalf of the Representatives. Any
notice by the Company to the
-16-
17
Underwriters shall be sufficient if given in writing or by telegraph addressed
to the Representatives at such address and time as may be specified in the Terms
Agreement, and any notice by the Underwriters to the Company shall be sufficient
if given in writing or by telegraph addressed to the Company at 0000 Xxxxxxx
Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxx 00000, Attention of Xx. Xxxxx X. Xxxxxxxxx.
12. This Agreement shall be binding upon each Underwriter, the
Company, and their respective successors. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons, except that
(a) the indemnity agreement of the Company contained in Paragraph 7 hereof shall
also be deemed to be for the benefit of any Participant and the person or
persons, if any, who control any Underwriter or Participant within the meaning
of Section 15 of the Act, and (b) the indemnity agreement of the Underwriters
contained in Paragraph 7 hereof shall be deemed to be for the benefit of
directors of the Company, officers of the Company who have signed the
Registration Statement and any person who controls the Company within the
meaning of Section 15 of the Act. Nothing in this Agreement is intended or shall
be construed to give any person, other than the persons referred to in this
Paragraph, any legal or equitable right, remedy or claim under or in respect of
this Agreement or any provision contained herein.
13. For purposes of this Agreement, "business day" means any
day on which the New York Stock Exchange is open for trading.
14. All representations, warranties and agreements of the
Company contained in this Agreement, or contained in certificates of officers
submitted pursuant hereto, shall remain operative and in full force and effect,
regardless of the termination of this Agreement or any investigation made by or
on behalf of the Underwriters or any person controlling the Underwriters or by
or on behalf of the Company, and shall survive each delivery of and payment for
any of the Underwritten Securities.
15. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York. The Terms Agreement may be
executed in one or more counterparts, and if executed in more than one
counterpart the executed counterparts shall together constitute a single
instrument.
-17-
