Exhibit 1.1
EXECUTION COPY
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XXX XXXXXXXX XXXXXXX
(a Delaware corporation)
4.125% Senior Notes due 2007
UNDERWRITING AGREEMENT
Dated: July 30, 2002
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$250,000,000
4.125% Senior Notes due 2007
XXX XXXXXXXX XXXXXXX
(a Delaware corporation)
UNDERWRITING AGREEMENT
July 30, 2002
Xxxxxxx, Xxxxx & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Xxx Xxxxxxxx Xxxxxxx, a Delaware corporation (the "Company"), confirms its
agreement with Xxxxxxx, Xxxxx & Co. (the "Underwriter"), with respect to the
issue and sale by the Company and the purchase by the Underwriter of
$250,000,000 aggregate principal amount of the Company's 4.125% Senior Notes due
2007 (the "Securities"). The Securities are to be issued pursuant to an
indenture dated as of April 11, 2002 (the "Indenture") between the Company and
Banc One, N.A., as trustee (the "Trustee"). The Securities will be issued in
book-entry only form to Cede & Co. as nominee of The Depository Trust Company
("DTC") pursuant to a letter agreement, to be dated as of the Closing Time (as
defined in Section 2(b) (the "DTC Agreement"), among the Company, the Trustee
and DTC.
SECTION 1. REPRESENTATIONS AND WARRANTIES BY THE COMPANY.
(a) Representations and Warranties. The Company represents and warrants to
the Underwriter as of the date hereof and as of the Closing Time, and agrees
with the Underwriter, as follows:
(i) REGISTRATION STATEMENT AND PROSPECTUS. A registration statement on
Form S-3 (File No. 333-86336) (the "Registration Statement") in respect of
the Securities has been filed with the Securities and Exchange Commission
(the "Commission"); the Registration Statement and any post-effective
amendment thereto, each in the form heretofore delivered or to be delivered
to the Underwriter, has been declared effective by the Commission in such
form; and no stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment thereto has been issued and no
proceeding for that purpose has been initiated or, to the Company's
knowledge, threatened by the Commission (the various parts of the
Registration Statement and any post-effective amendment thereto, including
all exhibits thereto and the documents
incorporated by reference in the prospectus contained in the Registration
Statement at the time such part of the Registration Statement became
effective but excluding Form T-1, each as amended at the time such part of
the Registration Statement became effective, are hereinafter collectively
called the "Registration Statement"; the prospectus relating to the
Securities, 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, being hereinafter called the "Prospectus"; any reference herein
to the Prospectus shall be deemed to include the documents incorporated by
reference therein pursuant to the applicable form under the Securities Act
of 1933, as amended (the "Act"), as of the date of such Prospectus; any
reference to any amendment or supplement to the Prospectus shall be deemed
to include any documents filed after the date of such Prospectus, under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated by reference in the Prospectus; any reference to any amendment
to the Registration Statement shall be deemed to include any portion of an
annual report of the Company filed pursuant to Sections 13(a) or 15(d) of
the Exchange Act after the effective date of the Registration Statement
that is incorporated by reference in the Registration Statement; and any
reference to the Prospectus as amended or supplemented shall be deemed to
refer to the Prospectus as amended or supplemented with respect to the
Securities in the form in which it is filed with the Commission pursuant to
Rule 424(b) under the Act in accordance with this Agreement (including any
documents incorporated by reference therein as of the date of such filing).
The Registration Statement and the Prospectus conform, and any further
amendments or supplements to the Registration Statement or the Prospectus
will conform, in all material respects, to the requirements of the Act and
the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"),
and the rules and regulations of the Commission thereunder and do not, and
will not, as of the applicable effective date as to the Registration
Statement, and any amendment thereto, and as of the applicable filing date
as to the Prospectus and any amendment or supplement thereto, 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,
in the case of the Prospectus and any amendment or supplement thereto, in
light of the circumstances under which they were made, not misleading;
provided, however, that this representation and warranty shall not apply to
any statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by the Underwriter
expressly for use in the Prospectus as amended or supplemented relating to
the Securities.
(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 contained 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; and any further documents so filed
and 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.
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(iii) FINANCIAL STATEMENTS. Except as noted therein, the consolidated
financial statements, and the related notes thereto, incorporated by
reference 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; and
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 or incorporated by reference in the
Prospectus present fairly in all material respects the information required
to be stated therein; any pro forma financial information, and the related
notes thereto, incorporated by reference in the Prospectus as amended or
supplemented has been prepared in accordance with the applicable
requirements of the Act and the Exchange Act, as applicable; and the
selected and consolidated financial data and the summary financial
information included or incorporated by reference in the Prospectus as
amended or supplemented 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 or
incorporated by reference in the Prospectus as amended or supplemented.
(iv) NO MATERIAL ADVERSE CHANGE IN BUSINESS. Since the respective
dates as of which information is given in the Registration Statement or
Prospectus, there has not been any material change in the capital stock of
the Company 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 Registration Statement or the Prospectus, 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 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 hereof, 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 incorporated and is validly existing
as a corporation 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 hereof; and, except as set forth
in Exhibit 21 to the Company's Annual Report on Form 10-K for the year
ended December 31, 2001, all the outstanding shares of capital stock of
each Significant
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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 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 constitutes 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 NOTES. The Securities have been duly
authorized by the Company and, at the Closing Time, will have been duly
executed by the Company and, 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 this 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 contemplated by, and 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 it or any of them or
any of their respective properties is bound, 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
Securities and the consummation of the transactions contemplated herein and
therein 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 is bound or to
which any of the property or assets of the Company or any of its
Significant Subsidiaries is subject, 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
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agency or body having jurisdiction over the Company, its Significant
Subsidiaries or any of their respective properties; and no consent,
approval, authorization, order, registration or qualification of or with
any such court or governmental agency or body is required for the
execution, delivery and performance by the Company of its obligations under
this Agreement, the Indenture and the Securities, except (1) such consents,
approvals, authorizations, orders, registrations or qualifications as have
been obtained under the Act, (2) such consents, approvals, authorizations,
orders, registrations or qualifications as will be required under the Act
or the Trust Indenture Act and (3) as may be required under state
securities or Blue Sky Laws in connection with the purchase and
distributions of the Securities by the Underwriter.
(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 property 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 performance by the Company of its
obligations hereunder or under the Indenture, in connection with the
offering, issuance or sale of the Securities hereunder, or the consummation
of the transactions contemplated by this Agreement or for the due
execution, delivery or performance by the Company of this Agreement or the
Indenture, except such as have been already obtained or as may be required
under the Exchange Act, the Act or the rules and regulations of the
Commission promulgated thereunder or by state securities laws, and except
for the qualification of the Indenture under the Trust Indenture Act.
(xiii) DESCRIPTION OF THE SECURITIES AND THE INDENTURE. The Securities
and the Indenture conform to the descriptions thereof contained in the
Prospectus as amended or supplemented; and the statements set forth 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 Securities, and 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) RATINGS. The Company has requested ratings on the Securities
from Standard & Poor's Rating Services, a division of The XxXxxx-Xxxx
Companies, Inc. ("S&P") and Xxxxx'x Investors Services, Inc ("Moody's").
The Company has no reason to believe that such ratings would be lower than
"AA-" by S&P and "Aa3" by Moody's.
(xv) INVESTMENT COMPANY ACT. The Company is not and, after giving
effect to the offering and sale of the 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").
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(xvi) 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
Securities.
(b) Officer's Certificates. Any certificate signed by any officer of the
Company or any of its subsidiaries delivered to the Underwriter or to counsel
for the Underwriter shall be deemed a representation and warranty by the Company
to the Underwriter as to the matters covered thereby.
SECTION 2. SALE AND DELIVERY TO UNDERWRITER; CLOSING.
(a) Securities. On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company
agrees to sell to the Underwriter, and the Underwriter agrees to purchase from
the Company, at the price set forth on Schedule A, $250,000,000 aggregate
principal amount of Securities.
(b) Payment. Payment of the purchase price for, and delivery of
certificates for, the 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 Underwriter and the Company, at 9:00 A.M.
(Eastern time) on August 6, 2002 (unless postponed in accordance with the
provisions of Section 11), or such other time not later than ten business days
after such date as shall be agreed upon by the Underwriter and the Company (such
time and date of payment and delivery being herein called the "Closing Time").
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
the account of the Underwriter of certificates for the Securities to be
purchased by it.
(c) Denominations; Registration. Certificates for the Securities shall be
in such denominations ($1,000 or integral multiples thereof) and registered in
such names as the Underwriter may request in writing at least one full business
day before the Closing Time. The certificates representing the Securities shall
be made available for examination and packaging by the 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 as follows:
(a) Filing of Prospectus; Filings under the Exchange Act. To deliver to the
Underwriter, if requested, a manually signed copy of the Registration Statement;
to prepare the Prospectus as amended or supplemented in a form approved by the
Underwriter and to file such Prospectus pursuant to Rule 424(b) under the Act
not later than the Commission's close of business on the second business day
following the execution and delivery of this Agreement or, if applicable, such
earlier time as may be required by Rule 424(b); to make no further amendment or
any supplement to the Registration Statement or Prospectus as amended or
supplemented after the date of this Agreement and prior to the Closing Time
which shall be
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disapproved by the Underwriter promptly after reasonable notice thereof
(provided that the foregoing shall not apply to any of the Company's periodic
filings with the Commission under the Exchange Act); to advise the Underwriter
promptly of any such amendment or supplement after such Closing Time and furnish
the Underwriter with copies thereof (provided that the foregoing shall not apply
to any of the Company's periodic 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 Securities, and during such same period to advise the 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, 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 Securities, of the
suspension of the qualification of the 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 Securities for Offer and Sale. The Company will use
its best efforts, in cooperation with the Underwriter, to qualify the Securities
for offering and sale under the applicable securities laws of such states and
other jurisdictions as the Underwriter may designate and will maintain such
qualifications in effect as long as required for the sale of the 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
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 Securities.
(c) Delivery of Prospectus; Notice and Effect of Material Events. Prior to
10:00 a.m., New York City time, on the New York Business Day next succeeding the
date of this Agreement, or as soon thereafter as practicable but in no event
later than 3:00 p.m. New York City time on August 2, 2002, to furnish the
Underwriter with written and electronic copies of the Prospectus as amended or
supplemented in New York City in such quantities as the 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 Securities and if at such time
any event shall have occurred that could reasonably be expected to have a
Material Adverse Effect on the Company and its subsidiaries considered as one
enterprise, or any event as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or omit to
state any material fact necessary 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 necessary
during such same period to amend or supplement such Prospectus or to file under
the Exchange Act any document incorporated by reference in
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such Prospectus (other than the Company's periodic filings with the Commission
under the Exchange Act) in order to comply with the Act, the Exchange Act or the
Trust Indenture Act, to notify the 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 and to any dealer in securities as many
written and electronic copies as the 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 Act), an earnings statement of the Company and its
subsidiaries (which need not be audited) complying with Section 11(a) of the 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 Underwriter and use its best
efforts to permit the 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 Securities in the manner specified in the Prospectus as
amended or supplemented under "Use of Proceeds."
(g) No Sales of Similar Securities. The Company agrees that during the
period beginning on the date of this Agreement and continuing to and including
the 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 Securities.
SECTION 4. PAYMENT OF EXPENSES.
(a) Expenses. The Company will pay all expenses incident to the performance
of its obligations under this Agreement, including (i) the preparation,
printing, delivery to the Underwriter and any filing 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, (ii) the preparation, printing and delivery to
the Underwriter 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 Securities, (iii) the preparation, issuance and delivery of the
certificates for the Securities to the Underwriter, including any transfer
taxes, any stamp or other duties payable upon the sale, issuance and delivery of
the Securities to the Underwriter and any charges of DTC in connection
therewith, (iv) the fees and disbursements of the Company's counsel, accountants
and other advisors, (v) the qualification of the 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 in
connection therewith and in connection with the preparation of any Blue Sky
Survey or any supplement thereto, (vi) any fees of the National Association of
Securities Dealers, Inc. in connection with the Securities, (vii) the fees and
expenses of the Trustee,
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including the fees and disbursements of counsel for the Trustee in connection
with the Indenture and (viii) any fees payable in connection with the rating of
the Securities.
(b) Termination of Agreement. If this Agreement is terminated by the
Underwriter in accordance with the provisions of Section 5(g) or Section 9(a)(i)
hereof, the Company shall reimburse the Underwriter for all of its out-of-pocket
expenses, including the reasonable fees and disbursements of counsel for the
Underwriter.
SECTION 5. CONDITIONS OF UNDERWRITER'S OBLIGATIONS. The obligations of the
Underwriter hereunder are subject to the accuracy of the representations and
warranties of the Company contained in Section 1 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, and to the following further conditions:
(a) Registration Statement and Prospectus. The Prospectus as amended or
supplemented shall have been filed with the Commission pursuant to Rule 424(b)
under the Act within the applicable time period prescribed for such filing by
the rules and regulations under the 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 Underwriter's reasonable satisfaction.
(b) Opinion of Counsel for the Company. At the Closing Time, the
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 satisfactory to the Underwriter.
(c) Opinion of Counsel for the Underwriter. At the Closing Time, the
Underwriter shall have received the opinion, dated as of the Closing Time, of
Sidley Xxxxxx Xxxxx & Xxxx LLP, counsel for the Underwriter, in form and
substance satisfactory to the 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 hereof or since the respective dates as of which information is
given in the Registration Statement and the Prospectus, any Material Adverse
Effect and the 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 herein and
satisfied all conditions on its part to be performed or satisfied at or prior to
the Closing Time.
(e) Accountants' Comfort Letters. (i) On or prior to the date of delivery
of the Prospectus as amended or supplemented to the Underwriter pursuant to the
first clause of Section
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3(c), the Underwriter shall have received from KPMG LLP a letter dated such
date, in form and substance satisfactory to underwriters, containing statements
and information of the type ordinarily included in accountants' "comfort
letters" to Underwriter with respect to the financial statements and financial
information included or incorporated by reference in the Registration Statement
and the Prospectus as amended or supplemented.
(ii) At the Closing Time, the Underwriter shall have received from
KPMG LLP a letter, dated the Closing Time, to the effect that they reaffirm
the statements made in the letter furnished pursuant to subsection (e)(i)
of this Section 5, except that the specified date referred to shall be a
date not more than three business days prior to the Closing Time.
(f) Additional Documents. At the Closing Time, counsel for the Underwriter
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 Securities as herein contemplated, or in order to evidence the
accuracy of any of the representations or warranties, or the fulfillment of any
of the conditions, herein contained; and all proceedings taken by the Company in
connection with the issuance and sale of the Securities as herein contemplated
shall be reasonably satisfactory in form and substance to the Underwriter and
counsel for the Underwriter.
(g) Termination of 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 Underwriter by notice to the Company at any
time at or prior to the Closing Time, and such termination shall be without
liability of any party to any other party except as provided in Section 4 and
except that Sections 1, 6, 7 and 8 shall survive any such termination and remain
in full force and effect.
(h) Maintenance of Rating. At the Closing Time, the Securities shall be
rated at least Aa3 by Xxxxx'x and AA- by S&P, and the Company shall have orally
confirmed to the Underwriter that the Securities have such ratings; and since
the date of this Agreement, there shall not have occurred a downgrading in the
rating assigned to the Securities or any of the Company's other debt securities
by any "nationally recognized statistical rating agency", as that term is
defined by the Commission for purposes of Rule 436(g)(2) under the Act, and no
such securities rating agency shall have publicly announced that it has under
surveillance or review, with possible negative implications, its rating of the
Securities or any of the Company's other debt securities.
SECTION 6. INDEMNIFICATION.
(a) Indemnification of Underwriter. The Company agrees to indemnify and
hold harmless the Underwriter and each person who controls the Underwriter
within the meaning of Section 15 of the 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
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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 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
Underwriter), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, to the extent that any such expense
is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by the
Underwriter expressly for use in the Prospectus (or any amendment or supplement
thereto).
(b) Indemnification of the Company, Directors and Officers. The Underwriter
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 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 Prospectus as amended or
supplemented in reliance upon and in conformity with written information
furnished to the Company by the Underwriter expressly for use in the Prospectus
as amended or supplemented.
(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 Underwriter, and, in
the case of parties indemnified pursuant to Section
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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 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, on the other hand, from the offering of the
Securities pursuant to this Agreement or (ii) if the allocation provided by
clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company, on the one hand, and of the
Underwriter, 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, on the other hand, in connection with the offering of the
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of
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the Securities pursuant to this Agreement (before deducting expenses) received
by the Company and the total underwriting discount received by the Underwriter,
bear to the aggregate initial offering price of the Securities.
The relative fault of the Company, on the one hand, and the Underwriter, 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 and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company and the Underwriter 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, the Underwriter shall not
be required to contribute any amount in excess of the amount by which the total
price at which the Securities purchased and sold by it hereunder exceeds the
amount of any damages that the Underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person who controls the Underwriter
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act
shall have the same rights to contribution as the 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 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 the Underwriter or controlling
person, or by or on behalf of the Company, and shall survive delivery of the
Securities to the Underwriter.
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SECTION 9. TERMINATION OF AGREEMENT.
(a) Termination; General. The 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 this Agreement or since the respective
dates as of which information is given in the Registration Statement or the
Prospectus, 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
Underwriter, impracticable or inadvisable to market the Securities or to enforce
contracts for the sale of the 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,
such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and provided further that Sections 1, 6,
7 and 8 shall survive such termination and remain in full force and effect.
SECTION 10. 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
Underwriter shall be directed to Xxxxxxx, Sachs & Co., 00 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, attention: Xxx Xxxxxx, Registration Department (with a
copy to the General Counsel); notices to the Company shall be directed to it at
Xxx Xxxxxxxx Xxxxxxx, Prudential Xxxxx Xxxxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000,
attention: Treasurer.
SECTION 11. PARTIES. This Agreement shall inure to the benefit of and be
binding upon the Underwriter and the Company 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
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 herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the Underwriter and the Company 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 Securities from the Underwriter shall be deemed to
be a successor by reason merely of such purchase.
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SECTION 12. 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 13. EFFECT ON HEADINGS. The Article and Section headings herein are
for convenience only and shall not affect the construction hereof.
15
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Underwriter and the Company in accordance with its terms.
Very truly yours,
XXX XXXXXXXX XXXXXXX
By: /s/ Xxxx X. Xxxxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Assistant Treasurer
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX, SACHS & CO.
By: /s/ Xxxxxxx, Xxxxx & Co.
----------------------------------
(Xxxxxxx, Sachs & Co.)
16
SCHEDULE A
XXX XXXXXXXX XXXXXXX
$250,000,000 of 4.125% Senior Notes due 2007
1. The initial offering price of the Securities shall be 99.881% of the
principal amount thereof, plus accrued interest, if any, from August 6,
2002.
2. The purchase price to be paid by the Underwriter for the Securities
shall be 99.881% of the principal amount thereof.
3. The interest rate on the Securities shall be 4.125% per annum.
4. The stated maturity date of the Securities is August 30, 2007.
Sch A-1
