EXHIBIT 1.1
UNDERWRITING AGREEMENT
April 9, 2001
TRICON Global Restaurants, Inc.
0000 Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
We (the "Manager") are acting on behalf of the underwriter or
underwriters (including ourselves) named below (such underwriter or underwriters
being herein called the "Underwriters"), and we understand that TRICON Global
Restaurants, Inc., a North Carolina corporation (the "Company"), proposes to
issue and sell $200,000,000 aggregate principal amount ($200,000,000 initial
offering price) of its 8.5% Senior Notes due April 15, 2006 (the "Five-Year
Notes") and $650,000,000 aggregate principal amount ($644,702,500 initial
offering price) of its 8.875% Senior Notes due April 15, 2011 (the "Ten-Year
Notes" and, together with the Five-Year Notes, the "Debt Securities").
Subject to the terms and conditions set forth or incorporated by
reference herein, the Company hereby agrees to sell and the Underwriters agree
to purchase, severally and not jointly, the (i) principal amount of the
Five-Year Notes set forth opposite their names at a purchase price of 99.000% of
the principal amount thereof plus accrued interest, if any, from April 12, 2001
and (ii) principal amount of the Ten-Year Notes set forth opposite their names
at a purchase price of 98.060% of the principal amount thereof plus accrued
interest, if any, from April 12, 2001:
PRINCIPAL AMOUNT PRINCIPAL AMOUNT
OF FIVE-YEAR OF TEN-YEAR
UNDERWRITER NOTES NOTES
----------- ----- -----
Xxxxxxx, Sachs & Co. ............................... $ 100,000,000 $ 325,000,000
Chase Securities Inc. ............................... 10,000,000 195,000,000
Xxxxxxx Xxxxx Xxxxxx Inc............................. 60,000,000 65,000,000
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated .......................... 13,500,000 45,500,000
Banc One Capital Markets, Inc. ...................... 5,500,000 6,500,000
Fleet Securities, Inc. .............................. 5,500,000 6,500,000
SunTrust Equitable Securities Corporation ........... 5,500,000 6,500,000
----------------- -----------------
Total ......................................... $ 200,000,000 $ 650,000,000
================= =================
The Underwriters will pay for the Debt Securities upon delivery thereof
to the Depositary Trust Company ("DTC") or its designated custodian at 10:00
a.m. (New York time) on April 12, 2001, or at such other time, not later than
5:00 p.m. (New York time) on April 12, 2001, as shall be designated by the
Manager. The times and dates of such payments and deliveries are each
hereinafter referred to as the "Closing Date."
The Debt Securities shall have the terms set forth in the Prospectus
dated March 30, 2001, as supplemented by the Prospectus Supplement dated April
9, 2001, including the following:
TERMS OF DEBT SECURITIES:
A. The Five-Year Notes
Maturity Date: April 15, 2006
Interest Rate: 8.5%
Redemption Provisions: As set forth in the Prospectus
Supplement under "Description of Notes."
Interest Payment Dates: April 15 and October 15 commencing
October 15, 2001 (interest accrues from
April 12, 2001).
Form and Denominations: Global Note registered in the name of Cede &
Co., as the nominee of DTC. Beneficial
interests in such Global Note will be in
denominations of $1,000 and integral
multiples thereof.
Ranking: The Five-Year Notes will be senior unsecured
debt obligations of the Company issued under
the Indenture, dated as of May 1, 1998 (the
"Indenture"), by and among the Company, as
issuer, and Bank One Trust Company, N.A., as
successor trustee (the "Trustee"), and will
rank PARI PASSU with all other senior
unsecured indebtedness of the Company from
time to time outstanding.
B. The Ten-Year Notes
Maturity Date: April 15, 2011
Interest Rate: 8.875%
Redemption Provisions: As set forth in the Prospectus Supplement
under "Description of Notes."
Interest Payment Dates: April 15 and October 15 commencing
October 15, 2001 (interest accrues from
April 12, 2001).
Form and Denominations: Global Notes registered in the name of Cede
& Co., as the nominee of DTC. Beneficial
Interests in such Global Note will be in
denominations of $1,000 and integral
multiples thereof.
Ranking: The Ten-Year Notes will be senior unsecured
debt obligations of the Company issued under
the Indenture and will rank PARI PASSU with
all other senior unsecured indebtedness of
the Company from time to time outstanding.
All provisions contained in the document entitled TRICON Global
Restaurants, Inc. Underwriting Agreement Standard Provisions (Debt Securities)
dated April 9, 2001, a copy of which is attached hereto, are hereby incorporated
by reference in their entirety and shall be deemed to be a part of this
Agreement to the same extent as if such provisions had been set forth in full
herein, except that if any term defined in such document is otherwise defined
herein, the definition set forth herein shall control.
As evidenced by the Company's countersignature of this Agreement, the
Company hereby confirms its engagement of the services of Xxxxxxx, Sachs & Co.
as, and Xxxxxxx, Xxxxx & Co. hereby confirms its agreement
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with the Company to render services as, a "qualified independent underwriter,"
within the meaning of Section (b)(15) of Rule 2720 of the Conduct Rules of the
National Association of Securities Dealers, Inc., with respect to the offering
and sale of the Debt Securities. As compensation for the services of Xxxxxxx,
Sachs & Co. hereunder as a "qualified independent underwriter," the Company
agrees to pay Xxxxxxx, Xxxxx & Co. $10,000 on the Closing Date. In addition, the
Company agrees promptly to reimburse Xxxxxxx, Sachs & Co. for all out-of-pocket
expenses, including fees and disbursements of counsel, reasonably incurred in
connection with the services to be rendered hereunder as a "qualified
independent underwriter."
Xxxxxxx, Xxxxx & Co. hereby represents and warrants to, and agrees with,
the Company and the Underwriters that with respect to the offering and sale of
the Debt Securities as described in the Prospectus and Prospectus Supplement:
(i) Xxxxxxx, Sachs & Co. constitutes a "qualified independent
underwriter" within the meaning of Section (b)(15) of Rule
2720 of the Conduct Rules of the National Association of
Securities Dealers, Inc.;
(ii) Xxxxxxx, Xxxxx & Co. has participated in the preparation of
the Prospectus and the Prospectus Supplement and has exercised
the usual standards of "due diligence" in respect thereto;
(iii) Xxxxxxx, Sachs & Co. has undertaken the legal responsibilities
and liabilities of an underwriter under the Securities Act of
1933, as amended, specifically including those inherent in
Section 11 thereof;
(iv) Based upon (A) a review of the Company, including an
examination of the Prospectus and the Prospectus Supplement,
information regarding the earnings, assets, capital structure
and growth rate of the Company and other pertinent financial
and statistical data, (B) inquiries of and conferences with
the management of the Company and its counsel and independent
public accountants regarding the business and operations of
the Company, (C) consideration of the prospects for the
industry in which the Company competes, estimates of the
business potential of the Company, assessments of its
management, the general condition of the securities markets,
market prices of the capital stock and debt securities of, and
financial and operating data concerning, companies believed by
Xxxxxxx, Xxxxx & Co. to be comparable to the Company with debt
securities of maturity and seniority similar to the Debt
Securities and the demand for securities of comparable
companies similar to the Debt Securities, and (D) such other
studies, analyses and investigations as Xxxxxxx, Sachs & Co.
has deemed appropriate, and assuming that the offering and
sale of the Debt Securities is made as contemplated herein and
in the Prospectus and Prospectus Supplement, Xxxxxxx, Xxxxx &
Co. recommends, as of the date of the execution and delivery
of this Agreement, that the yield on the Five-Year Notes be
not less than 8.5% and that the yield on the Ten-Year Notes be
not less than 8.875%, which minimum yield should in no way be
considered or relied upon as an indication of the value of the
Five-Year Notes or the Ten-Year Notes, respectively; and
(v) Xxxxxxx, Sachs & Co. will furnish to the Underwriters at the
time of delivery of the Debt Securities a letter, dated the
time of delivery of the Debt Securities, in form and substance
satisfactory to the Underwriters, to the effect of clauses (i)
through (iv) above.
Xxxxxxx, Xxxxx & Co. hereby agrees with the Company and the
Underwriters that, as part of its services hereunder, in the event of any
amendment or supplement to either the Prospectus or the Prospectus Supplement,
Xxxxxxx, Sachs & Co. will render services as a "qualified independent
underwriter," in accordance with Rule 2710 of the Conduct Rules of the National
Association of Securities Dealers, Inc., as such term is defined in Section
(b)(15) of Rule 2720 of the Conduct Rules of the National Association of
Securities Dealers, Inc. with respect to the offering and sale of the Debt
Securities as described in either the Prospectus or the Prospectus Supplement,
as so amended or supplemented, that are substantially the same as those services
being rendered with respect to the offering and sale of the Debt Securities as
described in the Prospectus and the Prospectus Supplement (including those
described above).
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In addition, the Company agrees with Xxxxxxx, Xxxxx & Co. that the
indemnification and contribution provisions of the Underwriting Agreement
Standard Provisions (Debt Securities), which are incorporated herein by
reference, shall also apply to Xxxxxxx, Sachs & Co. in its capacity as qualified
independent underwriter and that Xxxxxxx, Xxxxx & Co., in its capacity as
qualified independent underwriter, may rely upon the truth and accuracy of each
representation and warranty made by the Company in Section 1 thereof. The
Company agrees to cooperate with Xxxxxxx, Sachs & Co. to enable it to perform
the services contemplated by this Agreement and to deliver, or cause to be
delivered, to Xxxxxxx, Xxxxx & Co., in its capacity as qualified independent
underwriter, each of the opinions, certificates and letters referred to in
Sections 5(b), (c), (e), (f) and (g) of the Underwriting Agreement Standard
Provisions (Debt Securities).
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Please confirm your agreement by having an authorized officer sign a
copy of this Agreement in the space set forth below.
Very truly yours,
XXXXXXX, SACHS & CO.,
acting severally on behalf of themselves
and the Underwriters named herein
By: /s/ Xxxxxxx, Xxxxx & Co.
--------------------------------------
Name: _______________________________
Title: ______________________________
NOTICE INFORMATION:
Xxxxxxx, Sachs & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
XXXXXXX, XXXXX & CO.,
As Qualified Independent Underwriter
By: /s/ Xxxxxxx, Sachs & Co.
--------------------------------------
Name: _______________________________
Title: ______________________________
NOTICE INFORMATION:
Xxxxxxx, Xxxxx & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Accepted:
TRICON GLOBAL RESTAURANTS, INC.
By: /s/ Xxxxxx X. Xxxxx By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------- ---------------------------------
Name: Xxxxxx X. Xxxxx Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President and Title: Vice President and
Treasurer Assistant General Counsel
NOTICE INFORMATION:
TRICON Global Restaurants, Inc.
0000 Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Attention: Xxxxxxxxx X. Xxxxxxxx, Esq.
and Xxxxxx X. Xxxxx
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TRICON GLOBAL RESTAURANTS, INC.
UNDERWRITING AGREEMENT
STANDARD PROVISIONS
(DEBT SECURITIES)
April 9, 2001
From time to time, TRICON Global Restaurants, Inc., a North Carolina
corporation (the "Company"), may enter into one or more underwriting agreements
that provide for the sale of designated securities to the several underwriters
named therein. The standard provisions set forth herein may be incorporated by
reference in any such underwriting agreement (an "Underwriting Agreement"). The
Underwriting Agreement, including the provisions incorporated therein by
reference, is herein referred to as "this Agreement." Terms defined in this
Agreement are used herein as therein defined.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement including a prospectus, which, among
other things, relates to the Debt Securities and has filed with, or transmitted
for filing to, or shall promptly hereafter file with or transmit for filing to,
the Commission a prospectus supplement (the "Prospectus Supplement")
specifically relating to the Debt Securities pursuant to Rule 424(b) under the
Securities Act of 1933, as amended (the "Securities Act"), and/or a term sheet
or an abbreviated term sheet (each, a "Term Sheet"), pursuant to Rule 434 of the
rules and regulations of the Commission under the Securities Act (the
"Securities Act Regulations"), specifically relating to the Debt Securities. The
term Registration Statement means the registration statement as amended to the
date of this Agreement. The term Basic Prospectus means the prospectus included
in the Registration Statement at the time the Registration Statement was
declared effective by the Commission. The term Prospectus means the Basic
Prospectus in the form in which it has most recently been filed, or transmitted
for filing, with the Commission on or prior to the date of this Agreement
together with the final Prospectus Supplement. The term preliminary prospectus
means a preliminary prospectus supplement specifically relating to the Debt
Securities together with the Basic Prospectus. Any reference herein to the
Registration Statement or the Prospectus shall be deemed to refer to and include
the documents, financial statements and schedules incorporated by reference
therein or deemed to be incorporated by reference therein pursuant to Item 12 of
Form S-3 under the Securities Act, and any reference to any amendment or
supplement to the Registration Statement or the Prospectus shall be deemed to
refer to and include any documents, financial statements and schedules filed by
the Company with the Commission under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and so incorporated by reference or deemed to be
incorporated therein (such incorporated documents, financial statements and
schedules being herein called the "Incorporated Documents"). Notwithstanding the
foregoing, for purposes of this Agreement any prospectus, prospectus supplement,
term sheet or abbreviated term sheet prepared or filed with respect to an
offering pursuant to the Registration Statement of a series of securities other
than the Debt Securities shall not be deemed to have supplemented the
Prospectus.
1. REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to each of the Underwriters that:
(a) (i) The Registration Statement has been declared effective
by the Commission and no stop order suspending the effectiveness of the
Registration Statement is in effect nor, to the Company's knowledge, are any
proceedings for such purpose pending before or threatened by the Commission,
(ii) as of the effective date of the Registration Statement, the Company met the
applicable requirements for use of Form S-3 under the Securities Act with
respect to the registration under the Securities Act of $2,000,000,000 in
aggregate public offering price of Debt Securities and (iii) as of its effective
date, the Registration Statement met the requirements set forth in Rule
415(a)(l)(x) under the Securities Act and complied in all material respects with
said Rule.
(b) (i) Each document, if any, filed or to be filed pursuant to
the Exchange Act and incorporated or to be incorporated by reference in the
Prospectus complies or will comply, in all material respects,
1
with the applicable provisions of the Exchange Act and the rules and regulations
of the Commission thereunder, (ii) the Registration Statement and any amendments
thereto, do not and will not, as of the applicable effective date, contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading,
(iii) the Registration Statement and the Prospectus comply, and any further
amendments or supplements to the Registration Statement or the Prospectus will
comply, in all material respects, with the Securities Act and the Securities Act
Regulations, and the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act") and (iv) the Prospectus and any amendment or supplement thereto,
do not and will not, as of the date thereof, contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; PROVIDED, HOWEVER, that the Company makes no representations and
warranties (l) as to information contained in or omitted from the Registration
Statement or the Prospectus in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of the Underwriters
expressly for use in the Registration Statement or the Prospectus or any
amendment or supplement thereto, or (2) as to that part of the Registration
Statement that constitutes the Statement of Eligibility and Qualification of the
Trustee (the "Form T-l") under the Trust Indenture Act.
(c) Each of the Company and KFC Corporation, Pizza Hut, Inc. and
Taco Xxxx Corp. (each a "Principal Subsidiary") has been duly incorporated and
is validly existing and in good standing under the laws of its state of
incorporation, has the corporate power and authority to own its property and to
conduct its business as described in the Prospectus, and is duly qualified to
transact business as a foreign corporation and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the failure to
be so qualified or in good standing would not have a material adverse effect on
the Company and its subsidiaries taken as a whole. All of the outstanding shares
of capital stock or other securities evidencing equity ownership of each
Principal Subsidiary have been duly and validly authorized and issued and are
fully paid and non-assessable, and are owned by the Company free and clear of
any security interest, claim, lien or encumbrance.
(d) The Indenture has been duly qualified under the Trust
Indenture Act and has been duly authorized, executed, and delivered by the
Company and (assuming due authorization, valid execution, and delivery thereof
by the Trustee) is a valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms, except to the extent that (x)
enforcement thereof may be limited by (i) the laws of bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium, or similar laws relating to
or affecting creditors' rights generally (whether now or hereafter in effect),
(ii) laws limiting rights of indemnity or contribution, or (iii) equitable
principles of general applicability (regardless of whether enforceability is
considered in a proceeding at law or in equity) and (y) the waiver contained in
Section 6.12 of the Indenture may be deemed unenforceable; and the Indenture
conforms in all material respects to the description thereof contained in the
Prospectus.
(e) This Agreement has been duly authorized, executed, and
delivered by the Company.
(f) The Debt Securities have been duly authorized and, when
issued, executed, and authenticated in accordance with the provisions of the
Indenture, and delivered to and duly paid for in accordance with the applicable
provisions of the Prospectus and this Agreement, will be entitled to the
benefits of the Indenture and will be valid and binding obligations of the
Company, enforceable against the Company in accordance with their respective
terms, except to the extent that (x) enforcement thereof may be limited by (i)
the laws of bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium, or similar laws relating to or affecting creditors' rights generally
(whether now or hereafter in effect), (ii) laws limiting rights of indemnity or
contribution, or (iii) equitable principles of general applicability (regardless
of whether enforceability is considered in a proceeding at law or in equity) and
(y) the waiver contained in Section 6.12 of the Indenture may be deemed
unenforceable; and the Debt Securities will conform in all material respects to
the description thereof contained in the Prospectus.
(g) The execution and delivery of this Agreement and the
Indenture by the Company, the issuance and sale of the Debt Securities and the
performance by the Company of its obligations under this Agreement, the Debt
Securities and the Indenture, as the case may be, will not conflict with or
constitute a breach or
2
violation of or default (with the passage of time or otherwise) under (A) the
Restated Articles of Incorporation or By-Laws of the Company, (B) any agreement
or other instrument binding upon the Company or any of its subsidiaries, which
breach or default would, singly or in the aggregate, have a material adverse
effect on the consolidated financial condition or earnings of the Company and
its subsidiaries, considered as one enterprise, (C) any statute, law or
regulation to which the Company or any of its properties may be subject, which
violation would, singly or in the aggregate, have a material adverse effect on
the consolidated financial condition or earnings of the Company and its
subsidiaries, considered as one enterprise, or (D) any judgment, order, or
decree of any governmental body, agency, or court having jurisdiction over the
Company or any of its subsidiaries; and no consent, approval, authorization, or
order of or qualification or registration with any governmental body or agency
is, to the Company's knowledge, required for the performance by the Company of
its obligations under this Agreement, the Debt Securities or the Indenture,
other than registration thereof under the Securities Act, qualification of the
Indenture under the Trust Indenture Act and such registrations or qualifications
as may be necessary under the Blue Sky laws or other securities laws of the
various states in which the Debt Securities may be offered and sold.
(h) There has not been any material adverse change (or
development involving a prospective material adverse change) in the business,
properties, earnings, or financial condition of the Company and its subsidiaries
on a consolidated basis from that set forth in the Company's last periodic
report filed with the Commission under the Exchange Act and the rules and
regulations promulgated thereunder.
(i) There are no legal or governmental proceedings pending or,
to the Company's knowledge, threatened, to which the Company or any of its
subsidiaries is a party or to which any of the properties of the Company or any
of its subsidiaries is subject that is required to be described in the
Registration Statement or the Prospectus and is not so described, or any
applicable statute, regulation, contract, or other document that is required to
be described in the Registration Statement or the Prospectus that is not so
described.
(j) The Company is not and, after giving effect to the offering
and sale of the Debt Securities, will not be an "investment company" or an
entity "controlled" by an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended.
(k) KPMG LLP, who has certified certain financial statements of
the Company and its subsidiaries, are, to the Company's knowledge, independent
public accountants as required by the Securities Act and the Securities Act
Regulations.
2. PUBLIC OFFERING. The Company is advised by the Manager that the
Underwriters propose to make a public offering of their respective portions of
the Debt Securities as soon after this Agreement has been entered into as in the
Manager's judgment is advisable. The terms of the public offering of the Debt
Securities have been provided by the Manager to the Company and are in all
material respects completely set forth in the Prospectus.
3. PURCHASE AND DELIVERY. Except as otherwise provided in this
Section 3, payment for the Debt Securities shall be made by wire transfer, of
immediately available funds, by the Underwriters to the order of the Company, at
the time set forth in this Agreement, upon delivery to the Manager for the
respective accounts of the several Underwriters of the Debt Securities,
registered in such names and in such denominations as the Manager shall request
in writing not less than two full business days prior to the date of delivery.
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4. PAYMENT OF EXPENSES. The Company will pay all expenses incident to
the performance of its obligations under this Agreement, including (i) the
preparation, printing and filing of the Registration Statement (including
financial statements and exhibits) as originally filed and of each amendment
thereto, (ii) the printing and delivery to the Underwriters of this Agreement,
any agreement among Underwriters, the Indenture and such other documents as may
be required in connection with the offering, purchase, sale and delivery of the
Debt Securities, (iii) the preparation, issuance and delivery of the Debt
Securities and any certificates for the Debt Securities to the Underwriters,
(iv) the fees and disbursements of the Company's counsel, accountants and other
advisors or agents (including transfer agents and registrars), as well as the
fees and disbursements of the Trustee and its counsel, (v) the qualification of
the Debt Securities under state securities laws or the applicable laws of any
foreign jurisdiction in which the Debt Securities are offered in accordance with
the provisions of Section 6(g) hereof, including filing fees and the reasonable
fees and disbursements of counsel for the Underwriters in connection therewith
and in connection with the preparation, printing and delivery of any Blue Sky
Survey, and any amendment thereto, (vi) the printing and delivery to the
Underwriters of copies of each preliminary prospectus, any Term Sheet, and the
Prospectus and any amendments or supplements thereto, (vii) the fees charged by
nationally recognized statistical rating organizations for the rating of the
Debt Securities, and (viii) the fees and expenses incurred with respect to the
listing of the Debt Securities on any securities exchange.
5. CONDITIONS TO CLOSING. The several obligations of the Underwriters
hereunder are subject to (i) the condition that the representations and
warranties of the Company contained herein are true and correct (or, with
respect to the representations and warranties contained in Section 1 that are
not qualified as to materiality, are true and correct in all material respects)
and the Company has complied with all agreements required by this Agreement or
the Indenture on its part to be performed, and (ii) the following additional
conditions precedent:
(a) The Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed for such
filing by the Securities Act Regulations and in accordance with Section 6(b)
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 Manager's reasonable satisfaction.
(b) OPINION OF COUNSEL EMPLOYED BY THE COMPANY. On the
applicable Closing Date, the Underwriters shall have received an opinion of
Xxxxxxx X. Xxxxxxx, Esq., Assistant General Counsel of the Company, or such
other counsel as may be selected by the Company and agreed to by the Manager,
dated as of the applicable Closing Date, in form and substance reasonably
satisfactory to the Manager to the effect that:
(i) The Company has been duly incorporated and is validly
existing and in good standing under the laws of the State of North
Carolina. Each Principal Subsidiary is validly existing and in good
standing under the laws of its state of incorporation.
(ii) The Company has the corporate power and authority to
enter into and perform its obligations under this Agreement and the
Indenture and to issue and sell the Debt Securities.
(iii) This Agreement has been duly authorized, executed and
delivered by the Company.
(iv) The Indenture has been duly authorized, executed and
delivered by the Company.
(v) The Debt Securities have been duly authorized by the
Company.
(vi) The execution and delivery of this Agreement and the
Indenture by the Company, the issuance and sale of the Debt Securities,
and the performance by the Company of its obligations under this
Agreement, the Debt Securities and the Indenture, as the case may be,
will not
4
conflict with or constitute a breach or violation of or default (with
the passage of time or otherwise) under (A) the Restated Articles of
Incorporation or By-Laws of the Company, (B) subject to the Company's
compliance with any applicable covenants pertaining to its incurrence
of unsecured indebtedness contained therein, any agreement or other
instrument binding upon the Company or any of its subsidiaries, which
breach or default would, singly or in the aggregate, have a material
adverse effect on the consolidated financial condition or earnings of
the Company and its subsidiaries, considered as one enterprise, (C) any
statute, law or regulation to which the Company or any of its
properties may be subject, or (D) to such counsel's knowledge, after
due inquiry, any judgment, order, or decree of any governmental body,
agency, or court having jurisdiction over the Company or any of its
subsidiaries, except that such counsel may state that the opinion set
forth in clause (C) of this paragraph (vi) is limited to those
statutes, laws or regulations in effect on the date of this opinion
which, in such counsel's experience, are normally applicable to
transactions of the type contemplated by this Agreement and such
counsel expresses no opinion as to the Blue Sky laws or other
securities laws of the various states in which the Debt Securities may
be offered and sold.
(vii) No consent, approval, authorization, or order of or
qualification or registration with any court or other governmental body
or agency is, to such counsel's knowledge, required for the performance
by the Company of its obligations under this Agreement, the Debt
Securities or the Indenture, other than registration thereof under the
Securities Act, qualification of the Indenture under the Trust
Indenture Act, and such registrations or qualifications as may be
necessary under the Blue Sky laws or other securities laws of the
various states in which the Debt Securities may be offered and sold.
(viii) To such counsel's knowledge after due inquiry, there is
no legal or governmental proceeding pending or threatened, no statute
or regulation, and no agreement, instrument, or other document to
which, in any case, the Company or any of its subsidiaries is a party,
or by which, in any case, any of the properties of the Company or its
subsidiaries is bound, that is required to be described in the
Registration Statement or the Prospectus, or that is required to be
filed as an exhibit to the Registration Statement, that is not so
described or filed.
(ix) Each document incorporated, or deemed to be incorporated,
by reference in the Registration Statement and the Prospectus, at the
time such document was filed with the Commission appeared on its face
to be appropriately responsive in all material respects to the
requirements of the Exchange Act and the rules and regulations of the
Commission thereunder, except that in each case such counsel need not
express an opinion as to the financial statements, schedules and other
financial data included or incorporated by reference in, or excluded
from, the Registration Statement or the Prospectus.
In addition, such counsel shall state that he has participated in
conferences with officers and other representatives of the Company, counsel
employed by the Company, representatives of the independent accountants for the
Company, representatives of the Underwriters and counsel for the Underwriters,
at which the contents of the Registration Statement and Prospectus and related
matters were discussed and, although such counsel is not passing upon, and does
not assume any responsibility for, the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectus and has not
made any independent check or verification thereof, on the basis of the
foregoing, no facts have come to such counsel's attention that have led him to
believe that the Registration Statement (including the documents incorporated,
or deemed to be incorporated, by reference therein), at the time the Company
filed its Annual Report on Form 10-K for the fiscal year ended December 30,
2000, 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 (including the documents
incorporated, or deemed to be incorporated, by reference therein), as of the
date of this Agreement and at the Closing Date, contained or contains an untrue
statement of a material fact or omitted or omits 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, except that such counsel need
express no opinion or belief with respect to (i) the financial statements,
schedules and other financial data included or incorporated by reference in, or
excluded from, the Registration Statement or the Prospectus or (ii) the Form
T-1.
5
(c) OPINION OF COUNSEL TO THE COMPANY. On the Closing Date,
the Underwriters shall have received an opinion from Xxxxx, Xxxxx & Xxxxx,
counsel to the Company, dated as of the applicable Closing Date, in form and
substance reasonably satisfactory to the Manager to the effect that:
(i) Assuming the Indenture has been duly authorized, executed,
and delivered by the Company and, assuming due authorization, valid
execution, and delivery by the Trustee, the Indenture is a valid and
binding agreement of the Company, enforceable against the Company in
accordance with its terms, except to the extent that (x) enforcement
thereof may be limited by (i) the laws of bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium, or similar laws
relating to or affecting creditors' rights generally (whether now or
thereafter in effect), (ii) laws limiting rights of indemnity or
contribution, or (iii) equitable principles of general applicability
(regardless of whether enforceability is considered in a proceeding at
law or in equity) and (y) the waiver contained in Section 6.12 of the
Indenture may be deemed unenforceable.
(ii) Assuming the Debt Securities have been duly authorized by
the Company, when issued, executed, and authenticated in accordance
with the provisions of the Indenture, and delivered to and duly paid
for in accordance with the applicable provisions of the Prospectus and
this Agreement, the Debt Securities will be entitled to the benefits of
the Indenture and will be valid and binding obligations of the Company,
enforceable against the Company in accordance with their respective
terms, except to the extent that (x) enforcement thereof may be limited
by (i) the laws of bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium, or similar laws relating to or affecting
creditors' rights generally (whether now or hereafter in effect), (ii)
laws limiting rights of indemnity or contribution, or (iii) equitable
principles of general applicability (regardless of whether
enforceability is considered in a proceeding at law or in equity), and
(y) the waiver contained in Section 6.12 of the Indenture may be deemed
unenforceable.
(iii) The statements in the Prospectus under the captions
"Description of the Debt Securities" and "Description of Notes,"
insofar as they purport to summarize certain provisions of the
Indenture and the Debt Securities, are in all material respects
accurate summaries of such provisions and, to the extent that such
statements constitute matters of law, summaries of legal matters, legal
proceedings or legal conclusions, are accurate and complete in all
material respects.
(iv) The Registration Statement (excluding the documents
incorporated, or deemed to be incorporated, by reference therein), at
the time the Registration Statement became effective, and the
Prospectus (excluding the documents incorporated, or deemed to be
incorporated, by reference therein), as of the date of this Agreement
and at the Closing Date, each appeared on its face to be appropriately
responsive in all material respects to the requirements of the
Securities Act and the rules and regulations of the Commission
thereunder and the Trust Indenture Act, except that in each case such
counsel need not express an opinion as to (i) the documents
incorporated, or deemed to be incorporated, by reference in the
Registration Statement or the Prospectus, (ii) the financial
statements, schedules and other financial data included or incorporated
by reference in, or excluded from, the Registration Statement or the
Prospectus or (ii) the Form T-1.
In addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the Company, counsel
employed by the Company, representatives of the independent accountants of the
Company, representatives of the Underwriters and counsel for the Underwriters,
at which the contents of the Registration Statement and Prospectus and related
matters were discussed and, although such counsel is not passing upon, and does
not assume any responsibility for, the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectus (other than
as provided in subparagraphs (iii) and (iv) above) and have made no independent
check or verification thereof, on the basis of the foregoing, no facts have come
to such counsel's attention that have led them to believe that the Registration
Statement (excluding the documents incorporated, or deemed to be incorporated,
by reference therein), at the time the Company filed its Annual Report on Form
10-K for the fiscal year ended December 30, 2000, 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 (excluding the documents incorporated, or deemed to be incorporated,
6
by reference therein), as of the date of this Agreement and at the Closing
Date, contained or contains an untrue statement of a material fact or omitted
or omits 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, except that such counsel need express no opinion or belief with
respect to (i) the documents incorporated, or deemed to be incorporated, by
reference in the Registration Statement or the Prospectus, (ii) the financial
statements, schedules and other financial data included or incorporated by
reference in, or excluded from, the Registration Statement or the Prospectus
or (iii) the exhibits to the Registration Statement, including the Form T-1.
(d) OPINION OF UNDERWRITERS' COUNSEL. On the applicable Closing
Date, the Underwriters shall have received an opinion from counsel to the
Underwriters, dated as of the applicable Closing Date, and in form and substance
satisfactory to the Underwriters.
(e) OFFICER'S CERTIFICATE. On the applicable Closing Date, the
Underwriters shall have received a certificate signed by an officer of the
Company, dated the Closing Date, to the effect that (i) the representations and
warranties of the Company contained in Section 1 hereof are true and correct
(or, with respect to the representations and warranties contained in Section 1
that are not qualified as to materiality, true and correct in all material
respects) with the same force and effect as though expressly made at and as of
the date of such certificate and (ii) the Company has complied with all
agreements and satisfied all conditions required by this Agreement or the
Indenture on its part to be performed or satisfied at or prior to the date of
such certificate.
(f) COMFORT LETTER. On the date hereof, the Underwriters shall
have received a letter (an "Auditor's Letter") from KPMG LLP ("KPMG"), or such
other independent certified public accountants as may be selected by the Company
(KPMG or such other independent certified public accountants that have certified
the financial statements covered by any applicable Auditor's Letter each,
successively, the "Company's Auditors"), dated as of the date hereof and in form
and substance reasonably satisfactory to the Underwriters, containing statements
and information of a type ordinarily included in accountants' "comfort letters"
to underwriters with respect to the financial statements and certain financial
information (including, without limitation, any pro forma financial statements
and pro forma financial information) contained or incorporated by reference in
the Registration Statement and the Prospectus; and, if financial statements for
any assets, business or entity acquired by the Company are included or
incorporated by reference in the Registration Statement or the Prospectus, the
Underwriters shall have received a similar "comfort letter" from the Company's
Auditors, dated as of the date hereof, and in form and substance reasonably
satisfactory to the Underwriters, with respect to such financial statements and
any financial information with respect to such assets, business or entity, as
the case may be, contained or incorporated by reference in the Registration
Statement and the Prospectus. Without limitation to the foregoing, the letter
delivered by the Company's Auditors shall state that nothing has come to their
attention that caused them to believe that at a specified date not more than
five days prior to the date of such letter, there was any change in the
outstanding capital stock of the Company or any increase in consolidated
long-term debt of the Company or any decrease in the stockholders' equity of the
Company, in each case as compared with the amounts shown on the most recent
consolidated balance sheet of the Company incorporated by reference in the
Registration Statement and Prospectus or, during the period from the date of
such balance sheet to a specified date not more than five days prior to the date
of such letter, there were any decreases, as compared with the corresponding
period in the preceding year, in consolidated net sales and operating revenues
or net income of the Company, except in each such case as set forth in or
contemplated by the Registration Statement and Prospectus or except for such
exceptions enumerated in such letter as shall have been agreed to by the
Underwriters and the Company.
(g) SUBSEQUENT DELIVERY OF COMFORT LETTER. On the applicable
Closing Date, the Underwriters shall have received from each firm of independent
public accountants which delivered a letter pursuant to subsection (f) of this
Section, dated as of the applicable Closing Date, to the effect that they
reaffirm the statements made in the letter furnished pursuant to subsection (f)
of this Section, except that the specified date referred to shall be a date not
more than five days prior to the applicable Closing Date.
(h) OTHER DOCUMENTS. On the applicable Closing Date, counsel to
the Underwriters shall have been furnished with such documents and opinions as
such counsel may reasonably require for the purpose of enabling such counsel to
pass upon the issuance and sale of Debt Securities as herein contemplated and
related
7
proceedings, or in order to evidence the accuracy and completeness of any of the
representations and warranties or the fulfillment of any of the conditions
herein contained.
6. COVENANTS OF THE COMPANY. In further consideration of the agreements
of the Underwriters contained herein, the Company covenants as follows:
(a) NOTICE OF CERTAIN EVENTS. The Company will promptly advise
the Manager of (i) the filing and effectiveness of any amendment to the
Registration Statement other than by virtue of the Company's filing any report
required to be filed under the Exchange Act and the filing of any supplement to
the Prospectus other than any amendment or supplement relating solely to an
offering of securities other that the Debt Securities, (ii) any request by the
Commission for any amendment to the Registration Statement, for any amendment or
supplement to the Prospectus, or for any additional information from the Company
(other than any such request relating to an offering of securities other than
the Debt Securities), (iii) the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or preventing or
suspending the use of any Prospectus relating to the Debt Securities or the
institution or threatening of any proceeding for any such purpose, and (iv) the
receipt by the Company of any notification with respect to the suspension of the
qualification of the Debt Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose. The Company will
use reasonable efforts to prevent the issuance of any such stop order or notice
of suspension of qualification and, if issued, to obtain as soon as reasonably
possible the withdrawal thereof.
(b) NOTICE OF CERTAIN PROPOSED FILINGS. During the period from
the date of this Agreement to and including the last Closing Date, at or prior
to the filing by the Company of any amendment to the Registration Statement or
of any supplement to the Prospectus (other than any amendment or supplement
relating solely to an offering of securities other than the Debt Securities), or
any document the Company is required to file pursuant to Section 13(a), 13(c),
14, or 15(d) of the Exchange Act, the Company will furnish the Manager and the
Underwriters with copies of any such amendment or supplement or other documents
in a reasonable amount of time prior to such proposed filing and will not file
any such document to which the Manager shall reasonably object, unless, in the
judgment of the Company or its counsel, such amendment or supplement or other
document is necessary to comply with law. Subject to the foregoing sentence, the
Company will promptly cause each applicable supplement to the Prospectus to be
filed with or transmitted for filing with the Commission in accordance with Rule
424(b) or 424(c) under the Securities Act or pursuant to such other rule or
regulation of the Commission as then deemed appropriate by the Company.
(c) COPIES OF THE REGISTRATION STATEMENT AND THE PROSPECTUS. The
Company will furnish (in New York) to the Underwriters, without charge, one
original signed copy of the Registration Statement (including exhibits) and all
amendments thereto that shall become effective, and as many copies of the
Prospectus, any documents incorporated by reference therein, and any supplements
and amendments thereto as the Underwriters may reasonably request, in each case
within a reasonable period of time following the date on which this Agreement is
executed and delivered by the Company and the Manager, or the date on which such
document becomes effective, or the date on which such document is requested by
the Underwriters, as applicable.
(d) REVISIONS OF REGISTRATION STATEMENT AND PROSPECTUS --
MATERIAL CHANGES. If, at any time when a prospectus relating to the Debt
Securities is required to be delivered under the Securities Act by the
Underwriters, any event occurs or condition exists as a result of which the
Prospectus would include an untrue statement of a material fact, or omit to
state a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, or if for any reason
it is necessary to amend or supplement the Prospectus or to file under the
Exchange Act any document incorporated by reference in the Prospectus in order
to comply with the Securities Act, the Exchange Act or the Trust Indenture Act,
or the respective rules and regulations of the Commission thereunder, or any
other applicable law, the Company will promptly notify the Underwriters, by
telephone or by facsimile (in either case with written confirmation from the
Company by mail), and will promptly prepare and, subject to Section 6(b), cause
to be filed with the Commission the appropriate documents or appropriate
amendment or supplement to the Registration Statement or the Prospectus, as the
case may be, and will supply without charge to the Underwriters one copy of a
signed copy of any such
8
amended Registration Statement and will supply without charge to the
Underwriters as many copies of any such amended or supplemented Prospectus as
the Underwriters may from time to time reasonably request.
(e) COMPLIANCE WITH EXCHANGE ACT. The Company, during the period
when the Prospectus is required to be delivered under the Securities Act or the
Exchange Act, will comply, in a timely manner, with all applicable requirements
under the Exchange Act relating to the filing with the Commission of the
Company's reports pursuant to Section 13(a), 13(c) or 15(d) of the Exchange Act
and, if then applicable, the Company's proxy statements pursuant to Section
14(a) of the Exchange Act.
(f) EARNINGS STATEMENT. The Company will make generally available
to its security holders earnings statements that satisfy the provisions of
Section 11 (a) of the Securities Act and Rule 158 promulgated thereunder.
(g) BLUE SKY QUALIFICATIONS. The Company will, with such
assistance from the Underwriters as the Company may reasonably request, endeavor
to qualify the Debt Securities for offer and sale under the Blue Sky laws or
other securities laws of such jurisdictions as the Underwriters shall reasonably
request and will maintain such qualifications for as long as required with
respect to the offer, sale, and distribution of the Debt Securities; PROVIDED,
HOWEVER, that the Company shall not be obligated to register or qualify as a
foreign corporation or take any action which would subject it to general service
of process in any jurisdiction where it is not now subject.
(h) SUSPENSION PERIOD. During the period from the date of this
Agreement to and including the last Closing Date, the Company shall not offer,
sell, contract to sell or otherwise dispose of any debt securities of the
Company which mature more than one year after the last Closing Date and which
are substantially similar to the Debt Securities, without the prior written
consent of the Manager.
7. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold each Underwriter and
each person, if any, who controls an Underwriter within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act, harmless
from and against any and all losses, claims, damages, or liabilities as
incurred, insofar as such losses, claims, damages, or liabilities (and actions
in respect thereof) arise out of, are based upon, or are caused by any untrue
statement or allegedly untrue statement of a material fact contained in the
Registration Statement or the Prospectus or in any amendment or supplement
thereto, or arise out of, are based upon or are caused by any 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 the Company
agrees to reimburse each such indemnified party for any reasonable legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability, or action as such expenses
are incurred; PROVIDED, HOWEVER, that the Company will not be liable to the
extent that such losses, claims, damages, or liabilities (or actions in respect
thereof) arise out of, are based upon, or are caused by (i) any untrue statement
or omission or alleged untrue statement or omission made in reliance upon the
Form T-1, (ii) any untrue statement or omission or alleged untrue statement or
omission included in or omitted from the Registration Statement or the
Prospectus in reliance upon and in conformity with information furnished to the
Company by or on behalf of the Underwriters in writing expressly for use in the
Registration Statement or the Prospectus or any amendment or supplement thereto,
or (iii) any untrue statement or omission or alleged untrue statement or
omission in the preliminary prospectus if such untrue statement or omission or
alleged untrue statement or omission is corrected in the Prospectus and if,
having previously been furnished by or on behalf of the Company with copies of
such Prospectus, the Underwriters thereafter failed to deliver such Prospectus,
prior to or concurrently with the sale of a Debt Security or Debt Securities to
the person asserting such loss, claim, damage, or liability who purchased such
Debt Security or Debt Securities which are the subject thereof from the
Underwriters.
(b) Each Underwriter severally (and not jointly) agrees to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement, and each person, if any, who controls the Company
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act, to the
9
same extent as the foregoing indemnity from the Company to the Underwriters, but
only with respect to such losses, claims, damages, and liabilities (and actions
in respect thereof) that arise out of, are based upon, or are caused by any
untrue statement or omission or allegedly untrue statement or omission included
in or omitted from the Registration Statement or the Prospectus in reliance upon
and in conformity with information furnished to the Company by or on behalf of
such Underwriter in writing expressly for use in the Registration Statement or
the Prospectus or any amendment or supplement thereto.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to either paragraph (a) or (b) of this Section
7, such person (the "indemnified party") will promptly notify the person against
whom such indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, will retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
will pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party will have the right to retain its
own counsel, but the fees and expenses of such counsel will be borne by the
indemnified party unless (i) the indemnifying party and the indemnified party
shall have mutually agreed to the retention of such counsel or (ii) the named
parties to any such proceeding (including any impleaded parties) include both
the indemnifying party (whether or not the indemnifying party was an original
named party to such proceeding) and the indemnified party and such indemnified
party shall have been advised by counsel that there may be actual or potential
conflicts of interest between the indemnifying party and the indemnified party
including situations in which there may be one or more legal defenses available
to the indemnified party which are different from, or additional to, those
available to the indemnifying party. It is understood that the indemnifying
party will not, in connection with any proceeding or substantially similar or
related proceedings in the same jurisdiction, be liable for the fees and
expenses of more than one separate firm (in addition to any local counsel) for
all such indemnified parties and that all such reasonable fees and expenses will
be reimbursed as they are incurred. Such firm will be designated in writing by
the Manager (in the case of parties indemnified pursuant to the second preceding
paragraph) or by the Company (in the case of parties indemnified pursuant to the
first preceding paragraph), as the case may be. The indemnifying party will not
be liable for any settlement of any claim, action or proceeding effected without
its written consent, but if settled with such consent, or if there shall be a
final judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment. No indemnifying party will, without the prior written
consent of the indemnified party, effect any settlement or compromise of or
consent to the entry of any judgment with respect to any pending or threatened
claim, action or proceeding in respect of which any indemnified party is or
could have been a party and indemnity or contribution could have been sought
hereunder by such indemnified party, unless such settlement, compromise or
judgment (i) includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such proceeding and (ii)
does not include a statement as to, or an admission of fault, culpability or a
failure to act by, the indemnified party. Any provision of this paragraph (c) to
the contrary notwithstanding, no failure by an indemnified party to notify the
indemnifying party as required hereunder will relieve the indemnifying party
from any liability it may have had to an indemnified party otherwise than under
Section 7(a) or (b).
(d) If the indemnification provided for in paragraph (a) or (b)
of this Section 7 is unavailable to an indemnified party or is insufficient in
respect of any losses, claims, damages, or liabilities referred to therein, then
each indemnifying party under such paragraph, in lieu of indemnifying the
indemnified party thereunder, will contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages, or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company, on the one hand, and the Underwriters, on the
other, from the offering of Debt Securities by the Underwriters, 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 the Underwriters, on the other, in connection with the statements or
omissions that resulted in such losses, claims, damages, or liabilities, as well
as any other relevant equitable considerations. The relative benefits received
by the Company, on the one hand, and the Underwriters, on the other, in
connection with the offering of Debt Securities by the Underwriters will be
deemed to be in the same proportion as the total net proceeds received by the
Company from the offering of such Debt Securities bears to the total discounts
and commissions received by the Underwriters from the Company in respect
thereof. The relative fault of the Company, on the one hand, and of the
10
Underwriters, on the other, will be determined by reference to, among other
things, whether the untrue or allegedly untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to information
supplied or to be supplied by the Company or by the Underwriters and the
parties' relative intent, knowledge, access to information, and opportunity to
correct or prevent such statement or omission.
(e) The Company and the Underwriters agree that it would not be
just or equitable if contribution pursuant to paragraph (d) above were
determined by pro rata allocation or by any other method of allocation that does
not take account of the equitable considerations referred to therein. The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages, and liabilities referred to in paragraph (d) above will be deemed to
include, subject to the limitations set forth above, any reasonable legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Any other provisions of
this Section 7 to the contrary notwithstanding (i) no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the applicable Debt Securities underwritten by it and distributed
to the public were offered to the public exceeds the amount of any damages which
such Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission and (ii) 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 obligations of the Underwriters of Debt
Securities in this subsection (d) to contribute are several in proportion to
their respective underwriting obligations with respect to such securities and
not joint.
(f) The remedies provided for in this Section 7 are not exclusive
and will not limit any rights or remedies that may otherwise be available to any
indemnified party at law or in equity.
8. TERMINATION. The Underwriters may terminate this Agreement
immediately upon notice to the Company if, at any time prior to the Closing
Date, (i) there shall have occurred (A) any material adverse change (or
development involving a prospective material adverse change) in the business,
properties, earnings, or financial condition of the Company and its subsidiaries
on a consolidated basis, (B) any suspension or material limitation of trading in
the Company's capital stock by the Commission or the New York Stock Exchange,
Inc. (the "NYSE"), or (C) any decrease by Xxxxx'x Investors Services, Inc. or
Standard & Poor's Corporation with respect to the ratings of any of the debt
securities issued or guaranteed by the Company or any public announcement by any
such organization to the effect that it has placed any debt securities issued or
guaranteed by the Company on what is commonly termed a "watch list" with
negative implications (the events described in the foregoing clauses (A) through
(C) the "Company-Specific Events"), the effect of any of which Company-Specific
Events shall have made it impracticable, in the reasonable judgment of the
Manager, to market such Debt Securities, or (ii) there shall have occurred (A)
any suspension or material limitation of trading in securities generally on the
NYSE or the establishment of minimum prices on the NYSE, (B) a declaration of a
general moratorium on commercial banking activities in New York by either
federal or New York State authorities, or (C) any outbreak or material
escalation of hostilities or other national or international calamity or crisis
(the events described in the foregoing clauses (A) through (C) the "Market
Events"), the effect of any of which Market Events (other than the Market Event
described in Clause (B), which shall not be subject to the following
qualification) shall have made it impracticable, in the reasonable judgment of
the Manager, to market such Debt Securities.
9. DEFAULTING UNDERWRITERS. If on the Closing Date any one or more of
the Underwriters shall fail or refuse to purchase Debt Securities that it has or
they have agreed to purchase on such date, and the aggregate amount of Debt
Securities which such defaulting Underwriter or Underwriters agreed but failed
or refused to purchase is not more than one-tenth of the aggregate amount of the
Debt Securities to be purchased on such date, the other Underwriters shall be
obligated severally in the proportions that the amount of Debt Securities set
forth opposite their respective names above bears to the aggregate amount of
Debt Securities set forth opposite the names of all such non-defaulting
Underwriters, or in such other proportions as the Manager may specify, to
purchase the Debt Securities which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase on such date. If on the Closing Date
any Underwriter or Underwriters shall fail or refuse to purchase Debt Securities
and the aggregate amount of Debt Securities with respect to which such default
occurs is more than one-tenth of the aggregate amount of Debt Securities to be
purchased on such date, and arrangements satisfactory to the Manager and the
Company for the purchase of such Debt Securities are not made within 36 hours
after such default, this
11
Agreement shall terminate without liability on the part of any non-defaulting
Underwriter or the Company. In any such case either the Manager or the Company
shall have the right to postpone the Closing Date but in no event for longer
then seven days, in order that the required changes, if any, in the Registration
Statement and in the Prospectus or in any other documents or arrangements may be
effected. Any action taken under this paragraph shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
10. SURVIVABILITY. The respective indemnities, agreements,
representations, warranties and other statements of the Company and the several
Underwriters, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of any Underwriter or any controlling person of any
Underwriter, or the Company, or any officer or director or controlling person of
the Company, and shall survive delivery of and payment for the Debt Securities.
11. CERTAIN OBLIGATIONS. If this Agreement shall be terminated
pursuant to Section 8 hereof, the Company shall not then be under any liability
to any Underwriter with respect to the Debt Securities except as provided in
Sections 4 and 7 hereof; but, if for any other reason (other than a default by
the Underwriters under Section 9 hereof) Debt Securities are not delivered by or
on behalf of the Company as provided herein, the Company will reimburse the
Underwriters through the Manager for all out-of-pocket expenses approved in
writing by the Manager, including fees and disbursements of counsel, reasonably
incurred by the Underwriters in making preparations for the purchase, sale and
delivery of such Debt Securities, but the Company shall then be under no further
liability to any Underwriter with respect to such Debt Securities except as
provided in Sections 4 and 7 hereof.
12. NOTICES. In all dealings hereunder, the Manager shall act on
behalf of each of the Underwriters of Debt Securities, and the parties hereto
shall be entitled to act and rely upon any statement, request, notice or
agreement on behalf of any Underwriter made or given by the Manager.
Except as otherwise specifically provided herein, all communications
hereunder will be in writing and shall be deemed to have been duly given if
delivered by hand, mailed via Express Mail, deposited with Federal Express or
any nationally recognized commercial courier service for "next day" delivery, or
telecopied and confirmed in writing (by telecopied facsimile or otherwise) to
the respective addresses or telecopier numbers set forth on the signature page
hereto, or to such other address or telecopier number as either party may
hereafter designate to the other in writing; provided, however, that any notice
to an Underwriter pursuant to Section 7(c) hereof shall be delivered in a manner
provided above to such Underwriter at its address set forth in its Underwriters'
Questionnaire, or telex constituting such Questionnaire, which address will be
supplied to the Company by the Manager upon request. Any such statements,
requests, notices or agreements shall take effect upon receipt thereof.
13. SUCCESSORS; NON-TRANSFERABILITY. This Agreement will inure to the
benefit of and be binding upon the parties hereto, their respective successors,
and the officers, directors, and controlling persons referred to in Section 7
hereof. No other person will have any right or obligation hereunder. Neither
party to this Agreement may assign its rights hereunder without the written
consent of the other parties.
14. COUNTERPARTS. This Agreement may be signed in any number of
counterparts, each of which will be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
15. TIME OF THE ESSENCE. Time shall be of the essence with respect to
this Agreement. As used herein, "business day" shall mean any day when the
Commission's office in Washington, D.C. is open for business.
16. APPLICABLE LAW. This Agreement will be governed by and construed
in accordance with the laws of the State of New York, including without
limitation, New York General Obligations Law Section 5-1401.
17. HEADINGS. The headings of the sections of this Agreement have been
inserted for convenience of reference only and will not affect the construction
of any of the terms or provisions hereof.
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