EXECUTION COPY
EXHIBIT 1.2
XXX XXXXXXXX XXXXXXX
(a Delaware Corporation)
2.875% Senior Notes due 2008
TERMS AGREEMENT
March 4, 2003
To: XXX XXXXXXXX XXXXXXX
Prudential Xxxxx Xxxxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Ladies and Gentlemen:
We (the "Lead Underwriters") are acting on behalf of the underwriter or
underwriters (including ourselves) named below (such underwriter or underwriters
being herein called the "Underwriters", which term shall include any Underwriter
substituted pursuant to Section 10 of the Standard Provisions (as hereinafter
defined)), and we understand that Xxx Xxxxxxxx Xxxxxxx, a Delaware corporation
(the "Company"), proposes to issue and sell $300,000,000 aggregate principal
amount of its 2.875% Senior Notes due 2008 (the "Offered Securities"). Subject
to the terms and conditions set forth or incorporated by reference herein, the
Company hereby agrees to sell to each Underwriter, and each Underwriter agrees
to purchase, severally and not jointly, from the Company, the aggregate
principal amount of Offered Securities opposite its name set forth below:
Underwriter: Principal Amount of Offered Securities:
----------- --------------------------------------
Xxxxxx Xxxxxxx & Co. Incorporated $150,000,000
Banc One Capital Markets, Inc. $150,000,000
------------
Total $300,000,000
============
Payment of the purchase price for, and delivery of certificates for, the
Offered Securities shall be made at the office of Sidley Xxxxxx Xxxxx & Xxxx
LLP, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 or at such other place as
shall be agreed upon by the Lead Underwriters and the Company, at 9:00 a.m.
(Eastern time) on March 11, 2003 (unless postponed in accordance with the
provisions of Section 10 of the Standard Provisions), or such other time not
later than ten business days after such date as shall be agreed upon by the Lead
Underwriters and
the Company (such time and date of payment and delivery being herein called the
"Closing Time").
Notices to the Underwriters shall be directed to Xxxxxx Xxxxxxx & Co.
Incorporated, 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, attention: Xxxxxxx Xxxxx,
Telecopy No.: (000) 000-0000 (with a copy to the General Counsel).
The Offered Securities shall have the terms set forth in the prospectus
dated November 15, 2002, and the prospectus supplement dated March 4, 2003,
including the following:
2.875% Senior Notes due 2008
Title: 2.875% Senior Notes due 2008
Rank: Senior
Aggregate principal amount: $300,000,000
Denominations: 1,000 and integral multiples thereof
Currency of payment: U.S. Dollars
Interest rate or formula: 2.875% per annum
Interest payment dates: March 15 and September 15, commencing September 15, 2003
Regular record dates: March 1 and September 1
Stated maturity date: March 15, 2008
Redemption provisions: None
Sinking fund requirements: None
Listing requirements: None
Black-out provisions: None
Fixed or Variable Price Offering: Variable Price Offering
Purchase price: 99.418% of principal amount
Form: Book Entry
Other terms and conditions: N/A
Except as set forth below, all provisions contained in the document
entitled Xxx Xxxxxxxx Xxxxxxx Underwriting Agreement Standard Provisions dated
March 4, 2003 (the "Standard Provisions"), a copy of which is attached hereto,
are herein incorporated by reference in their entirety and shall be deemed to be
part of this Terms Agreement to the same extent as if such provisions had been
set forth in full in this Terms Agreement, except that (i) if any term defined
in the Standard Provisions is otherwise defined in this Terms Agreement, the
definition set forth in this Terms Agreement shall control, and (ii) if only one
Underwriter is named in this Terms Agreement, all references in the Standard
Provisions to the Lead Underwriter shall mean the Underwriter named in this
Terms Agreement.
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Please accept this offer no later than 11:59 p.m. (New York City time) on
March 4, 2003 by signing a copy of this Terms Agreement in the space set forth
below and returning the signed copy to us.
Very truly yours,
XXXXXX XXXXXXX & CO. INCORPORATED
By:/s/ XXXXXXX XXXXX
----------------------------------------
Authorized Signatory
BANC ONE CAPITAL MARKETS, INC.
By:/s/ XXXXXX XXXXXXXXXX
----------------------------------------
Authorized Signatory
Accepted:
XXX XXXXXXXX XXXXXXX
By:/s/ XXXX X. XXXXXXXX
----------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President and Treasurer
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EXECUTION COPY
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XXX XXXXXXXX XXXXXXX
(a Delaware corporation)
UNDERWRITING AGREEMENT STANDARD PROVISIONS
Dated: March 4, 2003
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EXECUTION COPY
Xxx Xxxxxxxx Xxxxxxx, a Delaware corporation (the "Company"), proposes to
issue and sell an aggregate initial offering price of its debt securities (the
"Securities") from time to time not to exceed $1,300,000,000 (or its equivalent
in one or more foreign currencies), as such amount may be increased from time to
time pursuant to the filing of any Rule 462(b) Registration Statement (as
hereinafter defined). The Securities will be issued pursuant to an indenture,
dated as of April 11, 2002, as modified, amended or supplemented from time to
time (collectively, the "Indenture"), between the Company and Bank One, N.A., as
trustee (the "Trustee").
Whenever the Company determines to make an offering of Securities, the
Company will enter into an agreement (each, a "Terms Agreement") providing for
the sale of such Securities (the Securities to be offered and sold pursuant to
the applicable Terms Agreement, the "Offered Securities") to, and the purchase
and offering thereof by, one or more Underwriters. The standard provisions set
forth herein shall, except as otherwise provided in the applicable Terms
Agreement, be incorporated by reference in any Terms Agreement. The applicable
Terms Agreement, including the standard provisions set forth herein incorporated
therein by reference, is herein referred to as this "Agreement." Terms defined
in the applicable Terms Agreement are used herein as therein defined.
The Company has filed with the Securities and Exchange Commission (the
"Commission") in accordance with the provisions of the Securities Act of 1933,
as amended, and the rules and regulations of the Commission thereunder (the
"Securities Act"), a registration statement on Form S-3 (File No. 333-101112),
which was declared effective by the Commission on November 15, 2002, including a
prospectus, relating to the Securities, and has filed with, or transmitted for
filing to, or shall promptly after the date of the applicable Terms Agreement
file with, or transmit for filing to, the Commission a prospectus supplement
(the "Prospectus Supplement") pursuant to Rule 424 under the Securities Act,
specifically relating to the Offered Securities to be offered and sold pursuant
to the applicable Terms Agreement. The term "Registration Statement" means the
registration statement referred to in the immediately preceding sentence,
including any exhibits thereto, as amended to the date of the applicable Terms
Agreement and by the Company's Annual Report on Form 10-K for the year ended
December 31, 2002 referred to in the Prospectus (hereinafter defined) (the "Form
10-K"). The term "Basic Prospectus" means the prospectus included in the
Registration Statement. The term "Prospectus" means the Basic Prospectus
together with the applicable Prospectus Supplement, in the form most recently
furnished to the Underwriter or Underwriters, as the case may be, for use in
confirming sales of the Offered Securities. The term "preliminary prospectus"
means a preliminary prospectus supplement specifically relating to the Offered
Securities together with the Basic Prospectus. Any reference in this Agreement
to the Registration Statement, any preliminary prospectus or the Prospectus
shall be deemed to include, in each case, the documents, if any, incorporated by
reference therein pursuant to Item 12 of Form S-3 under the Securities Act as of
the date of such preliminary prospectus or the Prospectus, as the case may be,
and the Form 10-K, and any reference to "amend", "amendment" or "supplement"
with respect to the Registration Statement, any preliminary prospectus or the
Prospectus shall be deemed to include, in each case, the documents, if any, that
are filed with the Commission on or after such date under the Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
Commission thereunder (the "Exchange Act"), that are deemed to be incorporated
by reference therein, other than the Form 10-K. If the Company has filed a
registration statement with the Commission pursuant to Rule 462(b) of the
Securities Act (the "Rule 462(b) Registration Statement"), then, after such
filing, all references to "Registration Statement" shall be deemed to refer to
and include the Rule 462(b) Registration Statement.
SECTION 1. Representations and Warranties by the Company.
(a) Representations and Warranties. The Company represents and warrants to
the Underwriter or each Underwriter, as the case may be, named in the applicable
Terms Agreement, as of the date of the applicable Terms Agreement and as of the
Closing Time specified in such Terms Agreement, and agrees with the Underwriter
or each Underwriter, as the case may be, with respect to the Offered Securities,
as follows:
(i) Registration Statement and Prospectus. The Company meets the
requirements for use of Form S-3 under the Securities Act. The
Registration Statement has been declared effective by the Commission; and
no stop order suspending the effectiveness of the Registration Statement
has been issued, and no proceeding for that purpose has been initiated or,
to the Company's knowledge, threatened by the Commission. At the
respective times the Registration Statement and any post-effective
amendments thereto became effective, the Registration Statement and any
amendments thereto complied in all material respects with the requirements
of the Securities Act and the Trust Indenture Act of 1939, as amended, and
the rules and regulations of the Commission thereunder (the "Trust
Indenture Act"), and 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. At the date of
the initial delivery of the Prospectus on or prior to the Closing Time and
at the Closing Time, neither the Prospectus nor any amendment or
supplement thereto includes an untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. Notwithstanding the foregoing, the representations and
warranties in this subsection shall not apply to (a) statements in or
omissions from the Registration Statement or any amendment thereto or the
Prospectus or any amendment or supplement thereto made in reliance upon
and in conformity with information furnished to the Company in writing by
any Underwriter expressly for use in the Registration Statement or any
amendment thereto or the Prospectus or any amendment or supplement thereto
and (ii) that part of the Registration Statement which constitutes the
Trustee's Statement of Eligibility on Form T-1 (the "Form T-1") under the
Trust Indenture Act. Each preliminary prospectus and prospectus filed as
part of the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the Securities Act,
complied when so filed in all material respects with the Securities Act.
(ii) Incorporated Documents. The documents incorporated by reference
in the Prospectus, when they were filed with the Commission, conformed in
all material respects to the requirements of the Exchange Act, and none of
such documents, when they were filed with the Commission, included an
untrue statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
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(iii) Financial Statements. Except as noted therein: (A) the
consolidated financial statements, and the related notes thereto, included
in the Prospectus present fairly in all material respects the consolidated
financial position of the Company and its consolidated subsidiaries as of
the dates indicated and the results of their operations and changes in
their consolidated cash flows for the periods specified; (B) said
financial statements have been prepared in conformity with U.S. generally
accepted accounting principles applied on a consistent basis, and the
supporting schedules included in the Prospectus present fairly in all
material respects the information required to be stated therein; (C) any
pro forma financial information, and the related notes thereto, included
in the Prospectus have been prepared in accordance with the applicable
requirements of the Securities Act and the Exchange Act, as applicable;
and (D) the selected and consolidated financial data and the summary
financial information included in the Prospectus present fairly the
information shown therein and, unless otherwise indicated therein, have
been compiled on a basis consistent with that of the audited financial
statements included in the Prospectus.
(iv) No Material Adverse Change in Business. Since the respective
dates as of which information is given in the Prospectus as amended or
supplemented through the date the Form 10-K is filed with the Commission,
there has not been any material change in the capital stock of the Company
(other than shares of capital stock repurchased pursuant to the Company's
stock repurchase program as authorized by the Company's board of directors
from time to time) or long-term debt of the Company and its consolidated
subsidiaries taken as a whole or any material adverse change, or any known
development involving the reasonable likelihood of a prospective material
adverse change, in the business, operations or financial condition of the
Company and its consolidated subsidiaries taken as a whole (a "Material
Adverse Effect"); and, since the respective dates as of which information
is given in the Prospectus as amended or supplemented, neither the Company
nor any subsidiary of the Company that is a "significant subsidiary"
within the meaning of Rule 1-02 of Regulation S-X under the Securities Act
(each, a "Significant Subsidiary") has entered into any transaction or
agreement (whether or not in the ordinary course of business) material to
the Company and its consolidated subsidiaries taken as a whole.
(v) Good Standing of the Company. The Company has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation, with power and
authority (corporate and other) to own its properties and conduct its
business as conducted as of the date of the applicable Terms Agreement,
and has been duly qualified as a foreign corporation for the transaction
of business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties, or conducts any
business, so as to require such qualification, other than where the
failure to be so qualified or in good standing would not result in a
Material Adverse Effect.
(vi) Good Standing of Significant Subsidiaries. Each of the
Significant Subsidiaries has been duly organized and is validly existing
under the laws of its jurisdiction of organization, with power and
authority (corporate and other) to own its properties and conduct its
business as conducted as of the date of the applicable Terms
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Agreement; and, except as set forth in Exhibit 21 to the Form 10-K or as
described in the Prospectus, all the outstanding shares of capital stock
or other outstanding equity interests in each Significant Subsidiary have
been duly authorized and validly issued, are fully-paid and
non-assessable, and (except, in the case of foreign subsidiaries, for
directors' qualifying shares) are owned by the Company, directly or
indirectly, free and clear of all liens, encumbrances, security interests
and claims.
(vii) Authorization of this Agreement. This Agreement has been duly
authorized, executed and delivered by the Company.
(viii) Authorization of the Indenture. The Indenture has been duly
authorized by the Company and at the Closing Time will constitute a valid
and binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as the enforcement thereof may be
subject to bankruptcy, insolvency, reorganization, fraudulent conveyance
or transfer, moratorium or similar laws affecting creditors' rights
generally and subject to general principles of equity (regardless of
whether enforceability is considered in a proceeding in equity or at law).
(ix) Authorization of the Offered Securities. The Offered Securities
have been duly authorized by the Company for issuance and sale pursuant to
this Agreement. The Offered Securities, when authenticated, issued and
delivered in the manner provided for in the Indenture and delivered
against payment of the purchase price therefor as provided in the
applicable Terms Agreement, will constitute valid and binding obligations
of the Company, enforceable against the Company in accordance with their
terms, except as the enforcement thereof may be subject to bankruptcy,
insolvency, reorganization, fraudulent conveyance or transfer, moratorium
or similar laws affecting creditors' rights generally and subject to
general principles of equity (regardless of whether enforceability is
considered in a proceeding in equity or at law), and will be in the form
or forms contemplated by, and will be entitled to the benefits of, the
Indenture.
(x) Absence of Defaults and Conflicts. Neither the Company nor any
of its Significant Subsidiaries is, or with the giving of notice or lapse
of time or both would be, in violation of or in default under, its charter
or by-laws or any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument which is material to the Company and its
consolidated subsidiaries taken as a whole and to which the Company or any
of its Significant Subsidiaries is a party or by which the Company or any
of its Significant Subsidiaries or any of their respective properties is
bound or subject, except for violations and defaults which individually
and in the aggregate would not result in a Material Adverse Effect. The
execution, delivery and performance by the Company of its obligations
under this Agreement, the Indenture and the Offered Securities and the
consummation of the transactions contemplated by this Agreement will not
conflict with, or result in a breach of any of the terms or provisions of,
or constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument which is material to the
Company and its consolidated subsidiaries taken as a whole and to which
the Company or any of its Significant Subsidiaries is a party or by which
the Company or any of its Significant Subsidiaries or any of their
respective properties is bound or subject, except for conflicts, breaches
and defaults which individually and in the
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aggregate would not result in a Material Adverse Effect, nor will any such
action result in any violation of the provisions of the Certificate of
Incorporation or the By-Laws of the Company or any applicable law or
statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company, its Significant
Subsidiaries or any of their respective properties.
(xi) Absence of Proceedings. There are no legal or governmental
proceedings pending or, to the knowledge of the Company, threatened to
which the Company or any of its Significant Subsidiaries is or is
threatened to be a party or to which any properties of the Company or any
of its Significant Subsidiaries is or is threatened to be the subject
which could individually or in the aggregate reasonably be expected to
result in a Material Adverse Effect.
(xii) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required for the due authorization, execution, delivery
and performance by the Company of its obligations under this Agreement,
the Indenture and the Offered Securities, except such (i) as have been
already obtained or as may be required under the Exchange Act, the
Securities Act or the Trust Indenture Act and (ii) as may be required
under state securities or blue sky laws in connection with the purchase
and distributions of the Offered Securities by any Underwriter.
(xiii) Description of the Offered Securities and the Indenture. The
Offered Securities and the Indenture conform to the descriptions thereof
contained in the Prospectus as amended or supplemented under the captions
"Description of Debt Securities" and "Description of the Notes," insofar
as they purport to constitute a summary of the terms of the Offered
Securities. The descriptions contained under the captions "Plan of
Distribution" and "Underwriting," insofar as they purport to describe the
provisions of the documents referred to therein, accurately and fairly
summarize such matters in all material respects.
(xiv) Investment Company Act. The Company is not and, after giving
effect to the offering and sale of the Offered Securities, will not be, an
"investment company", as such term is defined in the Investment Company
Act of 1940, as amended (the "Investment Company Act").
(xv) No Stabilization or Manipulation. None of the Company, its
Significant Subsidiaries, or any of their respective officers, directors
or controlling persons has taken, directly or indirectly, any action
designed to cause or to result in, or that has constituted or might
reasonably be expected to constitute, the stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale
of the Offered Securities.
(b) Officer's Certificates. Any certificate signed by any officer of the
Company or any of its subsidiaries delivered to any Underwriter or to counsel
for the Underwriter or Underwriters, as the case may be, shall be deemed a
representation and warranty by the
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Company to the Underwriter or each Underwriter, as the case may be, as to the
matters covered thereby.
SECTION 2. Sale and Delivery; Closing.
(a) Offered Securities. The commitment of the Underwriter or the several
commitments of each Underwriter, as the case may be, named in the applicable
Terms Agreement to purchase the Offered Securities pursuant to this Agreement
shall be deemed to have been made on the basis of the representations,
warranties and agreements contained in this Agreement and shall be subject to
the terms and conditions contained in this Agreement.
(b) Payment. Payment shall be made to the Company by wire transfer of
immediately available funds to a bank account designated by the Company, against
delivery to, in each case, at the Closing Time and location specified in the
applicable Terms Agreement, the account of the Underwriter or, if more than one
Underwriter is named in the applicable Terms Agreement, delivery to the Lead
Underwriter for the respective accounts of the Underwriters, of the Offered
Securities to be purchased by it or them, as the case may be. It is understood
that, if more than one Underwriter is named in the applicable Terms Agreement,
each Underwriter named in the applicable Terms Agreement has authorized the Lead
Underwriter, for its account, to accept delivery of, receipt for, and make
payment of the purchase price for, the Offered Securities which it has severally
agreed to purchase and the Lead Underwriter, individually and not as
representative of such Underwriters, may (but shall not be obligated to) make
payment of the purchase price for the Offered Securities to be purchased by any
Underwriter whose funds have not been received by the Closing Time, but such
payment shall not relieve such Underwriter from its obligations hereunder.
(c) Denominations; Registration. If the Offered Securities are not to be
issued in a global form, certificates for the Offered Securities shall be in
such denominations and registered in such names as the Lead Underwriter may
request in writing at least one full business day before the Closing Time. The
certificates representing the Offered Securities shall be made available for
examination and packaging by the Lead Underwriter in The City of New York not
later than 10:00 a.m. (Eastern time) on the business day prior to the Closing
Time.
SECTION 3. Covenants of the Company. The Company covenants with the
Underwriter or each Underwriter, as the case may be, named in the applicable
Terms Agreement, with respect to the Offered Securities, as follows:
(a) Filing of Prospectus; Filings under the Exchange Act. To deliver to
the Underwriter or each Underwriter, as the case may be, if requested, a
manually signed copy of the Registration Statement; to prepare the Prospectus
Supplement in a form reasonably acceptable to the Lead Underwriter and to file
the Prospectus pursuant to Rule 424 under the Securities Act not later than the
Commission's close of business on the second business day following the
execution and delivery of the applicable Terms Agreement or, if applicable, such
earlier time as may be required by Rule 424; to make no further amendment or any
supplement to the Registration Statement or Prospectus after the date of the
applicable Terms Agreement and prior to the Closing Time to which the Lead
Underwriter shall reasonably object promptly after reasonable notice thereof
(provided, that the foregoing shall not apply to any of the Company's
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filings with the Commission under the Exchange Act); to advise the Lead
Underwriter promptly of any such amendment or supplement after such Closing Time
and for so long as the delivery of a prospectus is required in connection with
the offering or sale of the Offered Securities and furnish the Lead Underwriter
with copies thereof (provided, that the foregoing shall not apply to any of the
Company's filings with the Commission under the Exchange Act); to file promptly
all reports and any definitive proxy or information statements required to be
filed by the Company with the Commission pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act for so long as the delivery of a prospectus is
required in connection with the offering or sale of the Offered Securities, and
during such same period to advise the Lead Underwriter, promptly after it
receives notice thereof, of the time when any amendment to the Registration
Statement has been filed or becomes effective or any supplement to the
Prospectus or any amended Prospectus has been filed with the Commission
(provided, that the foregoing shall not apply to any of the Company's filings
with the Commission under the Exchange Act), of the issuance by the Commission
of any stop order or of any order preventing or suspending the use of any
prospectus relating to the Offered Securities, of the suspension of the
qualification of the Offered Securities for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for any such
purpose, or of any request by the Commission for the amending or supplementing
of the Registration Statement or Prospectus or for additional information; and,
in the event of the issuance of any such stop order or of any such order
preventing or suspending the use of the Prospectus or suspending any such
qualification, to promptly use its best efforts to obtain the withdrawal of such
order.
(b) Qualification of the Offered Securities for Offer and Sale. The
Company will use its best efforts, in cooperation with the Underwriter or each
Underwriter, as the case may be, to qualify the Offered Securities for offering
and sale under the applicable securities laws of such states and other
jurisdictions as the Lead Underwriter may designate and will maintain such
qualifications in effect as long as required for the sale of the Offered
Securities; provided, however, that the Company shall not be obligated to file
any general consent to service of process or to qualify as a foreign corporation
or as a dealer in securities in any jurisdiction in which it is not so qualified
or to subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject. In each jurisdiction in
which the Offered Securities have been so qualified, the Company will file such
statements and reports as may be required by the laws of such jurisdiction to
continue such qualification in effect for so long as may be required in
connection with the distribution of the Offered Securities.
(c) Delivery of Prospectus; Notice and Effect of Material Events. Prior to
5:00 p.m., New York City time, on the New York business day next succeeding the
date of the applicable Terms Agreement, or as soon thereafter as practicable but
in no event later than the related Closing Time, to furnish to the Underwriter
or each Underwriter, as the case may be, with written and electronic copies of
the Prospectus in New York City in such quantities as the Underwriter or each
Underwriter may reasonably request, and, if the delivery of a prospectus is
required at any time in connection with the offering or sale of the Offered
Securities and if at such time any event shall have occurred that could
reasonably be expected to have a Material Adverse Effect, or any event as a
result of which the Prospectus as amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made when such Prospectus is delivered, not misleading, or, if
for any other reason it shall be
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necessary during such same period to amend or supplement such Prospectus in
order to comply with the Securities Act, the Exchange Act or the Trust Indenture
Act, to notify the Lead Underwriter, and confirm such notice in writing, and
upon its request to file such document and to prepare and furnish without charge
to the Underwriter or each Underwriter, as the case may be, and to any dealer in
securities as many written and electronic copies as the Underwriter or each
Underwriter may from time to time reasonably request of an amended Prospectus or
a supplement to the Prospectus which will correct such statement or omission or
effect such compliance.
(d) Financial Statements. To make generally available to its
securityholders as soon as practicable, but in any event not later than eighteen
months after the effective date of the Registration Statement (as defined in
Rule 158(c) under the Securities Act), an earnings statement of the Company and
its subsidiaries (which need not be audited) complying with Section 11(a) of the
Securities Act and the rules and regulations of the Commission thereunder
(including, at the option of the Company, Rule 158).
(e) DTC. The Company will cooperate with the Lead Underwriter and use its
best efforts to permit the Offered Securities to be eligible for clearance and
settlement through the facilities of DTC.
(f) Use of Proceeds. The Company will use the net proceeds received by it
from the sale of the Offered Securities in the manner specified in the
Prospectus under "Use of Proceeds."
(g) No Sales of Similar Securities. Subject to the immediately following
sentence, the Company agrees that during the period beginning on the date of the
applicable Terms Agreement and continuing to and including the related Closing
Time, not to offer, sell, contract to sell or otherwise dispose of any debt
securities of the Company that mature more than one year after the Closing Time
and which are substantially similar to the Offered Securities. Notwithstanding
the restriction contained in the immediately preceding sentence, the Company
may: (i) sell its commercial paper in the ordinary course of business and (ii)
issue and sell debt securities pursuant to the Distribution Agreement, dated as
of August 23, 2002, by and between the Company and Xxxxxxx Lynch, Pierce, Xxxxxx
& Xxxxx Incorporated, as agent.
(h) Registration Statement; Incorporated Documents. At the respective
times that any further post-effective amendments to the Registration Statement
become effective, such amendments will comply in all material respects with the
requirements of the Securities Act and the Trust Indenture Act and will not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading. Any documents incorporated by reference in the Prospectus, when such
documents are filed with the Commission, will conform in all material respects
to the requirements of the Exchange Act, and will not contain an untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading.
8
SECTION 4. Payment of Expenses.
(a) Expenses. Unless otherwise provided in the applicable Terms Agreement,
the Company will pay the following expenses incident to the performance of its
obligations under this Agreement: (i) the preparation, printing, filing and
delivery to the Underwriter or each Underwriter, as the case may be, named in
the applicable Terms Agreement, of the Registration Statement or the Prospectus
(including financial statements and any schedules or exhibits and any document
incorporated therein by reference) and of each amendment or supplement thereto
subsequent to the date of the applicable Terms Agreement but prior to the
expiration of the period of time during which the delivery of a prospectus is
required in connection with the offering or sale of the Offered Securities, (ii)
the preparation, printing and delivery to the Underwriter or each Underwriter,
as the case may be, of this Agreement, the Indenture and such other documents as
may be required in connection with the offering, purchase, sale, issuance or
delivery of the Offered Securities, (iii) the fees and disbursements of the
Company's counsel, accountants and other advisors, (iv) the fees and expenses of
the Trustee, including the fees and disbursements of counsel for the Trustee in
connection with the Indenture and (v) any fees payable in connection with any
rating of the Offered Securities. Unless otherwise provided in the applicable
Terms Agreement, the Underwriter or each Underwriter, as the case may be, named
in the applicable Terms Agreement will pay the following expenses incident to
the performance of its or their obligations under this Agreement: (i) the
preparation, issuance and delivery to the Underwriter or each Underwriter, as
the case may be, of the certificates for the Offered Securities, including any
transfer taxes, any stamp or other duties payable upon the sale, issuance and
delivery of the Offered Securities to the Underwriter or each Underwriter and
any charges of DTC in connection therewith, (ii) the qualification of the
Offered Securities under securities laws in accordance with the provisions of
Section 3(b) hereof, including filing fees and the reasonable fees and
disbursements of counsel for the Underwriter or Underwriters, as the case may
be, in connection therewith and in connection with the preparation of any Blue
Sky Survey or any supplement thereto, (iii) any fees of the National Association
of Securities Dealers, Inc. in connection with the Offered Securities and (iv)
the fees and disbursements of counsel to the Underwriter or Underwriters, as the
case may be.
(b) Termination of Agreement. If this Agreement is terminated by the Lead
Underwriter in accordance with the provisions of Section 5(h) or Section 9(a)(i)
hereof, the Company shall reimburse the Underwriter or each Underwriter, as the
case may be, named in the applicable Terms Agreement for all of its or their
out-of-pocket expenses reasonably incurred, including the reasonable fees and
disbursements of counsel for the Underwriter or Underwriters.
SECTION 5. Conditions to the Obligations of the Underwriter or each
Underwriter. The obligations of the Underwriter or each Underwriter, as the case
may be, named in the applicable Terms Agreement to purchase and pay for the
Offered Securities pursuant to this Agreement are subject to the accuracy, as of
the Closing Time, of the representations and warranties of the Company contained
in Section 1(a) hereof or in certificates of any officer of the Company or any
of its subsidiaries delivered pursuant to the provisions hereof, to the
performance by the Company of its covenants and other obligations hereunder
required to be performed by it on or before the Closing Time, and to the
following further conditions:
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(a) Registration Statement and Prospectus. The Prospectus shall have been
filed with the Commission pursuant to Rule 424 under the Securities Act within
the applicable time period prescribed for such filing by the rules and
regulations under the Securities Act and in accordance with Section 3(a) hereof;
no stop order suspending the effectiveness of the Registration Statement or any
part thereof shall have been issued and no proceeding for that purpose shall
have been initiated or threatened by the Commission; and all requests for
additional information on the part of the Commission shall have been complied
with to the Lead Underwriter's reasonable satisfaction.
(b) Opinion of Counsel for the Company. At the Closing Time, the Lead
Underwriter shall have received the favorable opinion, dated as of the Closing
Time, of the General Counsel or a Deputy General Counsel of the Company, in form
and substance reasonably satisfactory to the Lead Underwriter.
(c) Opinion of Counsel for the Underwriter or Underwriters. At the Closing
Time, the Lead Underwriter shall have received the opinion, dated as of the
Closing Time, of counsel for the Underwriter or Underwriters, as the case may
be, in form and substance reasonably satisfactory to the Lead Underwriter. In
giving such opinion such counsel may state that, insofar as such opinion
involves factual matters, they have relied, to the extent they deem proper, upon
certificates of officers of the Company and certificates of public officials.
(d) Officers' Certificate. At the Closing Time, there shall not have been,
since the date of the applicable Terms Agreement or since the respective dates
as of which information is given in the Prospectus through the date the Form
10-K is filed with the Commission, any Material Adverse Effect and the Lead
Underwriter shall have received a certificate of the Company, signed by each of
the Treasurer and Secretary of the Company, dated as of the Closing Time, to the
effect that (i) there has been no such Material Adverse Effect, (ii) the
representations and warranties in Section 1(a) hereof are true and correct with
the same force and effect as though expressly made at and as of the Closing
Time, and (iii) the Company has complied with all of the agreements entered into
in connection with the transaction contemplated by this Agreement and satisfied
all conditions on its part to be performed or satisfied at or prior to the
Closing Time.
(e) Accountants' Comfort Letters. At the Closing Time, the Lead
Underwriter shall have received from KPMG LLP or the Company's then engaged
accounting firm a letter dated such date, in form and substance reasonably
satisfactory to the Lead Underwriter, containing statements and information of
the type ordinarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and financial information included in
the Registration Statement and the Prospectus (as amended or supplemented).
(f) Additional Documents. At the Closing Time, counsel for the Underwriter
or Underwriters, as the case may be, shall have been furnished with such
documents and opinions as they may reasonably require for the purpose of
enabling them to pass upon the issuance and sale of the Offered Securities, or
in order to evidence the accuracy of any of the representations or warranties,
or the fulfillment of any of the conditions contained in this Agreement; and all
proceedings taken by the Company in connection with the issuance and sale of the
Offered
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Securities shall be reasonably satisfactory in form and substance to the Lead
Underwriter and such counsel.
(g) Maintenance of Rating. Since the date of the applicable Terms
Agreement, there shall not have occurred a downgrading in the rating assigned to
any of the Company's debt securities by any "nationally recognized statistical
rating organization", as that term is defined by the Commission for purposes of
Rule 436(g)(2) under the Securities Act, and no such securities rating
organization shall have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of any of the Company's
debt securities.
(h) Termination of this Agreement. If any condition specified in this
Section 5 shall not have been fulfilled when and as required to be fulfilled,
this Agreement may be terminated by the Lead Underwriter by notice to the
Company at any time prior to the Closing Time, and such termination shall be
without liability of any party to any other party except as provided in Section
4 and except that Sections 6 and 7 shall survive any such termination and remain
in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of the Underwriter or Each Underwriter. The Company
agrees to indemnify and hold harmless the Underwriter or each Underwriter, as
the case may be, named in the applicable Terms Agreement, and each person, if
any, who controls the Underwriter or each such Underwriter within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto), or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading, or arising out of any untrue
statement or alleged untrue statement of a material fact included in any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided, that (subject to Section
6(d) below) any such settlement is effected with the written consent of
the Company; and
(iii) against any and all expense whatsoever, as incurred (including
the reasonable fees and disbursements of counsel chosen by the Lead
Underwriter), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or
11
threatened, or any claim whatsoever based upon any such untrue statement
or omission, or any such alleged untrue statement or omission, to the
extent that any such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to (A) any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter expressly for use in the Registration Statement (or
any amendment thereto) or any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto) or (B) any loss, liability, claim, damage or
expense that results from the fact that any Underwriter sold Offered Securities
to a person to whom there was not sent or given, at or prior to the earlier of
either the mailing or delivery of the written confirmation of such sale or the
delivery of such Offered Securities to such person, a copy of the Prospectus
(excluding the documents incorporated therein by reference), if the Company had
previously furnished copies thereof to such Underwriter in a sufficient amount
of time in advance of such mailing or delivery to allow such Underwriter to mail
or deliver such copies to such person and, as of the date of such mailing or
delivery, such Prospectus did not include 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.
(b) Indemnification of the Company, Directors and Officers. The
Underwriter agrees or, if more than one Underwriter is named in the applicable
Terms Agreement, each Underwriter, severally agrees, to indemnify and hold
harmless the Company, its directors, each of its officers who signed the
Registration Statement and each person, if any, who controls the Company within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act against any and all loss, liability, claim, damage and expense described in
the indemnity contained in subsection (a) of this Section, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement (or any amendment thereto) or any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by such Underwriter expressly for use in the Registration
Statement (or any amendment thereto) or such preliminary prospectus or the
Prospectus (or any amendment or supplement thereto).
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by the Lead Underwriter,
and, in the case of parties indemnified pursuant to Section 6(b) above, counsel
to the indemnified parties shall be selected by the Company. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such
12
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 shall not be liable to such indemnified
party for any legal expenses of other counsel or any other expenses, in each
case 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 parties,
settle or compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section or Section 7
hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
SECTION 7. Contribution. If the indemnification provided for in Section 6
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company, on the one
hand, and the Underwriter or Underwriters, as the case may be, named in the
applicable Terms Agreement, on the other hand, from the offering of the Offered
Securities or (ii) if the allocation provided by clause (i) is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company, on the one hand, and of the Underwriter or Underwriters, as the
case may be, on the other hand, in connection with the statements or omissions
which resulted in such losses, liabilities, claims, damages or expenses, as well
as any other relevant equitable considerations.
The relative benefits received by the Company, on the one hand, and the
Underwriter or Underwriters, as the case may be, on the other hand, in
connection with the offering of the Offered Securities shall be deemed to be in
the same respective proportions as the total net proceeds from the offering of
the Offered Securities (before deducting expenses) received by the Company and
the total underwriting discount received by the Underwriter or Underwriters bear
to the aggregate initial offering price of the Offered Securities.
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The relative fault of the Company, on the one hand, and the Underwriter or
Underwriters, as the case may be, on the other hand, shall be determined by
reference to, among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company or by the Underwriter or
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Company and the Underwriter or Underwriters, as the case may be, agree
that it would not be just and equitable if contribution pursuant to this Section
7 were determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to above in
this Section 7. The aggregate amount of losses, liabilities, claims, damages and
expenses incurred by an indemnified party and referred to above in this Section
7 shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Offered Securities purchased and sold by it hereunder exceeds
the amount of any damages that such Underwriter has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or alleged
omission.
If more than one Underwriter is named in the applicable Terms Agreement,
the Underwriters' respective obligations to contribute pursuant to this Section
7 are several in proportion to the aggregate principal amount of Offered
Securities set forth opposite their respective names in such Terms Agreement,
and not joint.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act shall have the same rights to contribution as such
Underwriter, and each of the Company's directors and officers who have signed
the Registration Statement and each person, if any, who controls the Company
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act shall have the same rights to contribution as the Company.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company or any of its subsidiaries submitted
pursuant hereto shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of any Underwriter or controlling
person, or by or on behalf of the Company, and shall survive delivery of and
payment for the Offered Securities.
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SECTION 9. Termination of Agreement.
(a) Termination; General. The Lead Underwriter may terminate this
Agreement, by notice to the Company, at any time at or prior to the Closing Time
(i) if there has been, since the time of execution of the applicable Terms
Agreement or since the respective dates as of which information is given in the
Registration Statement or the Prospectus through the date the Form 10-K is filed
with the Commission, any Material Adverse Effect, or (ii) if there has occurred
any material adverse change in the financial markets in the United States or in
the international financial markets, any outbreak of hostilities or escalation
thereof or other calamity or crisis (including without limitation an act of
terrorism) or any change or development involving a prospective change in
national or international political, financial or economic conditions, in each
case the effect of which is such as to make it, in the judgment of the Lead
Underwriter, impracticable or inadvisable to market the Offered Securities or to
enforce contracts for the sale of the Offered Securities, or (iii) if trading in
any securities of the Company has been suspended or materially limited by the
Commission or the New York Stock Exchange, or if trading generally on the
American Stock Exchange or the New York Stock Exchange or in the Nasdaq National
Market has been suspended or materially limited, or minimum or maximum prices
for trading have been fixed, or maximum ranges for prices have been required, by
any of said exchanges or by such system or by order of the Commission, the
National Association of Securities Dealers, Inc. or any other governmental
authority, or a material disruption has occurred in commercial banking or
securities settlement or clearance services in the United States, or (iv) if a
banking moratorium has been declared by either Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this Section
9, such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and provided further, that Sections 6
and 7 shall survive such termination and remain in full force and effect.
SECTION 10. Default by One or More of the Underwriters. If more than one
Underwriter is named in the applicable Terms Agreement and one or more of the
Underwriters shall fail at the Closing Time to purchase the Offered Securities
which it or they are obligated to purchase under such Terms Agreement (the
"Defaulted Securities"), then the Lead Underwriter shall have the right, within
24 hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms set forth in this Agreement; if, however, the Lead Underwriter shall not
have completed such arrangements within such 24-hour period, then:
(a) if the aggregate principal amount of Defaulted Securities does not
exceed 10% of the aggregate principal amount of Offered Securities to be
purchased on such date pursuant to such Terms Agreement, the non-defaulting
Underwriters shall be obligated, severally and not jointly, to purchase the full
amount of the Defaulted Securities in the proportions that their respective
underwriting obligations under such Terms Agreement bear to the underwriting
obligations of all non-defaulting Underwriters, or
15
(b) if the aggregate principal amount of Defaulted Securities exceeds 10%
of the aggregate principal amount of Offered Securities to be purchased on such
date pursuant to such Terms Agreement, this Agreement shall terminate without
liability on the part of any non-defaulting Underwriter or the Company.
No action taken pursuant to this Section 10 shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement, either the Lead Underwriter or the Company shall have the right
to postpone the Closing Time for a period not exceeding seven days in order to
effect any required changes in the Registration Statement or the Prospectus or
in any other documents or arrangements.
SECTION 11. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the Company
shall be directed to it at Xxx Xxxxxxxx Xxxxxxx, Prudential Xxxxx Xxxxxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000, attention: Treasurer, Telecopy No.: (000) 000-0000.
Notices to the Underwriter or Underwriters, as the case may be, shall be
directed as provided in the applicable Terms Agreement.
SECTION 12. Parties. This Agreement shall each inure to the benefit of and
be binding upon the Company, the Underwriter or each Underwriter, as the case
may be, named in the applicable Terms Agreement, and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriter or Underwriters, as the case may be, and the Company and their
respective successors and the controlling persons and officers and directors
referred to in Sections 6 and 7 and their heirs and legal representatives, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision contained in this Agreement. This Agreement and all conditions
and provisions contained in this Agreement are intended to be for the sole and
exclusive benefit of the parties to the applicable Terms Agreement and their
respective successors, and said controlling persons and officers and directors
and their heirs and legal representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Offered Securities from any
Underwriter shall be deemed to be a successor by reason merely of such purchase.
SECTION 13. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED TIMES
OF DAY REFER TO NEW YORK CITY TIME.
SECTION 14. Effect of Headings. The Article and Section headings herein
are for convenience only and shall not affect the construction hereof.
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