UNDERWRITING AGREEMENT
March 22, 1996
The Walt Disney Company
500 South Buena Vista Street
Burbank, California 91521
Dear Sirs:
We (the "Representatives") are acting on behalf of the underwriters
(including ourselves) named below (such underwriters being herein called the
"Underwriters"), and we understand that The Walt Disney Company, a Delaware
corporation (the "Company"), proposes to issue and sell U.S. $1,300,000,000
aggregate principal amount of its 6-3/8% Senior Notes due March 30, 2001 (the
"Five-Year Notes") at an initial offering price of 100.000% and U.S.
$1,300,000,000 aggregate principal amount of its 6-3/4% Senior Notes due
March 30, 2006 (the "Ten-Year Notes") at an initial offering price of 99.855%
(the Five-Year Notes and the Ten-Year Notes collectively referred to hereinafter
as 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 below opposite their names at a purchase price of 99.650% of the
principal amount thereof plus accrued interest, if any, from March 27, 1996 and
(ii) principal amount of the Ten-Year Notes set forth opposite their names at a
purchase price of 99.355% of the principal amount thereof plus accrued interest,
if any, from March 27, 1996:
Principal Amount of
Name Five-Year Notes
---- --------------------
Merrill Lynch, Pierce, Fenner & Smith $423,500,000
Incorporated
CS First Boston Corporation 423,500,000
Bear, Stearns & Co. Inc. 65,000,000
Deutsche Bank AG London 65,000,000
Goldman, Sachs & Co. 65,000,000
J.P. Morgan Securities Ltd. 65,000,000
Morgan Stanley & Co. International Limited 65,000,000
Swiss Bank Corporation 65,000,000
ABN AMRO Bank N.V. 9,000,000
Banque Paribas 9,000,000
Barclays de Zoete Wedd Limited 9,000,000
Citicorp Securities, Inc. 9,000,000
Nikko Europe Plc 9,000,000
Nomura International plc 9,000,000
UBS Securities LLC 9,000,000
--------------
$1,300,000,000
Principal Amount of
Name Ten-Year Notes
---- --------------------
Merrill Lynch, Pierce, Fenner & Smith $423,500,000
Incorporated
CS First Boston Corporation 423,500,000
Bear, Stearns & Co. Inc. 78,000,000
Goldman, Sachs & Co. 78,000,000
Lehman Brothers International (Europe) 78,000,000
J.P. Morgan Securities Ltd. 78,000,000
Morgan Stanley & Co. International Limited 78,000,000
Bankers Trust International PLC 9,000,000
BA Securities, Inc. 9,000,000
Citicorp Securities, Inc. 9,000,000
Donaldson, Lufkin & Jenrette Securities 9,000,000
Corporation
PaineWebber Incorporated 9,000,000
Salomon Brothers Inc 9,000,000
Smith Barney Inc. 9,000,000
--------------
$1,300,000,000
The Underwriters will pay for the Debt Securities upon delivery thereof to
The Depository Trust Company or its designated custodian at 10:00 a.m. (New York
time) on March 27, 1996, or at such other time, not later than 11:30 a.m. (New
York time) on March 27,
2
1996, as shall be designated by the Representatives. The time and date of such
payment and delivery are hereinafter referred to as the "Closing Date".
The Debt Securities shall have the terms set forth in the Prospectus dated
March 7, 1996 as supplemented by the Prospectus Supplement dated March 22, 1996,
including the following:
3
TERMS OF DEBT SECURITIES:
A. THE FIVE-YEAR NOTES
Title: U.S. $1,300,000,000 6-3/8% Senior Notes due
March 30, 2001
Aggregate Principal Amount: U.S. $1,300,000,000
Initial Offering Price: 100.000%
Purchase Price: 99.650%
Currency of Payment: United States Dollars
Ratings of debt
securities included in the
Registration Statement: A - Standard & Poor's Ratings Services
A2 - Moody's Investors Service
A - Duff and Phelps
Maturity Date: March 30, 2001
Interest Rate: 6-3/8%
Redemption Provisions: As set forth in the Prospectus Supplement
under "Description of the Notes - Redemption
for Tax Purposes".
Interest Payment Dates: March 30 and September 30 commencing
September 30, 1996 (interest accrues from
March 27, 1996).
Regular Record Dates: March 15 and September 15
Form and Denominations: Global Note registered in the name of Cede & Co., as the nominee of The Depository Trust
Company ("DTC"). Beneficial interests in
such Global Note will be in denominations of
U.S. $1,000 and integral multiples thereof.
Ranking: The Five-Year Notes will constitute a
separate series of senior unsecured debt
obligations of the Company issued under the
Senior Debt Securities Indenture, dated as of
March 7, 1996 (the "Indenture"), by and among
the Company, as issuer, and Citibank, N.A.,
as trustee (the "Trustee") and will rank PARI
PASSU with all other senior unsecured
indebtedness of the Company from time to time
outstanding.
Listing: Luxembourg Stock Exchange. The Company shall
exercise its best efforts to have the Notes
approved for listing on the Luxembourg Stock
Exchange as soon as practicable.
4
B. THE TEN-YEAR NOTES
Title: U.S. $1,300,000,000 6-3/4% Senior Notes due
March 30, 2006
Aggregate Principal Amount: U.S. $1,300,000,000
Initial Offering Price: 99.855%
Purchase Price: 99.355%
Currency of Payment: United States Dollars
Ratings of debt
securities included in the
Registration Statement: A - Standard & Poor's Rating Services
A2 - Moody's Investors Service
A - Duff and Phelps
Maturity Date: March 30, 2006
Interest Rate: 6-3/4%
Redemption Provisions: As set forth in the Prospectus Supplement
under "Description of the Notes - Redemption
for Tax Purposes".
Interest Payment Dates: March 30 and September 30 commencing
September 30, 1996 (interest accrues from
March 27, 1996).
Regular Record Dates: March 15 and September 15
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 U.S. $1,000 and integral
multiples thereof.
Ranking: The Ten-Year Notes will constitute a separate
series of 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.
Listing: Luxembourg Stock Exchange. The Company shall
exercise its best efforts to have the Notes
approved for listing on the Luxembourg Stock
Exchange as soon as practicable.
C. OTHER GENERAL PROVISIONS
CONDITIONS TO CLOSING. Section 5 of the Standard Provisions (Debt
Securities) shall be amended by adding a new paragraph (i) immediately after
Section 5(h) to read as follows:
(i) LUXEMBOURG STOCK EXCHANGE. The Company shall exercise its best
efforts to have the Notes approved for listing on the Luxembourg Stock
Exchange as soon as practicable.
OFFICERS' CERTIFICATE: Section 5(d) of the Standard Provisions (Debt
Securities) is amended by adding the following as the last sentence of such
Section:
5
As used in this Section 5(d), the term "Prospectus" means the
Prospectus (as defined herein) in the form first used to confirm sales
of the Debt Securities.
COVENANTS OF THE COMPANY. Section 6 of the Standard Provisions (Debt
Securities) is amended by adding the following new paragraph (h):
(h) RESTRICTION ON SALE OF SECURITIES. Between the date of the
Underwriting Agreement and the Closing Date or such other date specified in
such Underwriting Agreement, the Company will not, without the prior
written consent of the Representatives, directly or indirectly, issue,
sell, offer to sell, grant any option for the sale of, or otherwise dispose
of, any of its debt securities, other than issuances of the Company's
commercial paper, debt securities denominated in currencies other than
United States dollars and debt securities with maturities equal to or
greater than 20 years.
TERMINATION: Section 11 of the Standard Provisions (Debt Securities) is
amended as follows:
(a) By deleting the words "United States" in Clause (ii) thereof and
inserting the words "North America, Europe or Asia" in their stead.
(b) Adding the following as the last sentence of such Section: "As used
in this Section 11, the term "Prospectus" means the Prospectus (as
defined herein) in the form first used to confirm sales of the Debt
Securities."
Notices: Notices to the Underwriters shall be directed to the
Representatives c/o CS First Boston Corporation, Park Avenue Plaza, 55 East 52nd
Street, New York, New York 10055 attention of Joseph Fashano and c/o Merrill
Lynch, Pierce, Fenner & Smith Incorporated at World Financial Center, North
Tower, New York, New York 10281-1201, attention of Nancy L. Kennan, Vice
President; and notices to the Company shall be directed to it at 500 South Buena
Vista Street, Burbank, California 91521, attention of Mark D. Rozells, Vice
President and Assistant Treasurer, with copies to the attention of the Company's
Legal Department and to Skadden, Arps, Slate, Meagher & Flom at 300 South Grand
Avenue, Suite 3400, Los Angeles, California 90071, attention of Thomas C.
Janson, Jr.
Except as otherwise noted above, all provisions contained in the document
entitled The Walt Disney Company Underwriting Agreement Standard Provisions
(Debt Securities) dated March 22, 1996, 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.
6
Please confirm your agreement by having an authorized officer sign a copy
of this Agreement in the space set forth below.
Very truly yours,
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
CS FIRST BOSTON CORPORATION
acting severally on behalf of themselves and
the Underwriters named herein
BY: Merrill Lynch, Pierce, Fenner & Smith
Incorporated
By: /s/ MATHEW M. PENDO
-------------------------------
Name: Mathew M. Pendo
Title: Director
BY: CS First Boston Corporation
By: /s/ MARK S. MARON
-------------------------------
Name: Mark S. Maron
Title: Managing Director
Accepted:
THE WALT DISNEY COMPANY
By: /s/ MARK D. ROZELLS
-------------------------------
Name: Mark D. Rozells
Title: Vice President & Assistant Treasurer
7
THE WALT DISNEY COMPANY
UNDERWRITING AGREEMENT
STANDARD PROVISIONS
(DEBT SECURITIES)
March 22, 1996
From time to time, The Walt Disney Company, a Delaware 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 the Underwriting 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 under the
Securities Act of 1933, as amended (the "1933 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 1933 Act (the "1933 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
together with the final Prospectus Supplement relating to the offering of the
Debt Securities, each in the form furnished to the Underwriters by the Company
for use in connection with the offering of the Debt Securities, as from time to
time amended or supplemented in accordance with the 1933 Act, except that if any
revised prospectus or prospectus supplement shall be provided to the
Underwriters by the Company for use in connection with the offering of the Debt
Securities which differs from the prospectus or prospectus supplement on file at
the Commission (whether or not such revised prospectus or prospectus supplement
is required to be filed by the Company pursuant to Rule 424 under the 1933 Act
Regulations), the term "Prospectus" shall refer to the prospectus and prospectus
supplement, as so revised, from and after the time it is first provided to the
Underwriters for such use; provided, however, that if the Company elects to rely
upon Rule 434 of the 1933 Act Regulations, then all references to the Prospectus
shall be deemed to refer to the final or preliminary prospectus and the Term
Sheet relating to the Debt Securities in the form furnished to the Underwriters
by the Company in reliance upon Rule 434 of the 1933 Act Regulations (in which
case, all references in this Agreement to the date of the Prospectus shall mean
the date of such Term Sheet). 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
1
Form S-3 under the 1933 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,
Disney Enterprises, Inc., a Delaware corporation ("Disney"), or Capital
Cities/ABC, Inc. ("Capital Cities") with the Commission under the Securities
Exchange Act of 1934, as amended (the "1934 Act") after the date hereof, 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) The Company meets the requirements for use of Form S-3 under the 1933
Act. The Registration Statement has become effective under the 1933 Act
and no stop order suspending the effectiveness of the Registration
Statement has been issued under the 1933 Act and no proceedings for that
purpose have been instituted or are pending or, to the knowledge of the
Company, are contemplated by the Commission, and any request on the part of
the Commission for additional information has been complied with. In
addition, the Indenture has been duly qualified under the Trust Indenture
Act of 1939, as amended (the "1939 Act").
(b) The Registration Statement, at the time it became effective, complied
in all material respects with the provisions of the 1933 Act and the 1933
Act Regulations and did not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading. At the date of the
Underwriting Agreement and at the Closing Date, the Prospectus and any
amendments and supplements thereto did not include an untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading. If the Company elects to rely upon Rule 434 of
the 1933 Act Regulations, the Company will comply with the requirements of
Rule 434. Notwithstanding the foregoing, this representation and warranty
does not apply to statements or omissions in the Registration Statement,
the Prospectus or any preliminary prospectus, or any amendment or
supplement thereto, made in reliance upon information furnished to the
Company in writing by or on behalf of the Underwriters expressly for use
therein or to those parts of the Registration Statement which constitute
the Trustee's Statement of Eligibility and Qualification on Form T-1 under
the 1939 Act (the "Form T-1"). There is no contract or document of a
character required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement which
is not described or filed as required.
(c) The Incorporated Documents, when they became effective or were filed
(or, if an amendment with respect to any such Incorporated Document was
filed or became effective, when such amendment was filed or became
effective) with the Commission, as the case may be, complied in all
material respects with the requirements of the 1934 Act, and any
Incorporated Documents filed subsequent to the date of the Underwriting
Agreement and prior to the termination of the offering of the Debt
Securities, will, when they are filed with the Commission, comply in all
material respects with the requirements
2
of the 1934 Act; no such Incorporated Document, when it became effective or
was filed (or, if an amendment with respect to any such Incorporated
Document was filed or became effective, when such amendment was filed or
became effective) with the Commission, contained, and no Incorporated
Document filed subsequent to the date of the Underwriting Agreement and
prior to the Closing Date will contain, an untrue statement of a material
fact or omitted, or will omit, to state a material fact required to be
stated therein or necessary to make the statements therein not misleading.
(d) This Agreement, the Indenture and the Debt Securities have been duly
authorized by the Company and conform in all material respects to the
descriptions thereof in the Prospectus.
(e) The Indenture (assuming due execution and delivery thereof by the
Trustee) is, and the Debt Securities (when executed by the Company and
authenticated in accordance with the Indenture and delivered to and paid
for by the Underwriters) will be, the legal, valid and binding obligations
of the Company, enforceable against the Company in accordance with their
respective terms, except as such enforceability may be limited by (A)
bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to or affecting the enforcement of
creditors' rights generally, (B) general principles of equity (regardless
of whether such enforcement is considered in a proceeding in equity or at
law), (C) requirements that a claim with respect to any Debt Securities
denominated other than in United States dollars (or a judgment denominated
other than in United States dollars in respect of such claim) be converted
into United States dollars at a rate of exchange prevailing on a date
determined pursuant to applicable law and (D) governmental authority to
limit, delay or prohibit the making of payments outside the United States
or in a foreign currency or composite currency. The Debt Securities (when
executed by the Company and authenticated in accordance with the terms of
the Indenture and delivered to and paid for by the Underwriters) will be
entitled to the benefits of the Indenture (subject to the exceptions set
forth in the preceding sentence).
(f) The Company is a validly existing corporation in good standing under
the laws of Delaware. The Company has full corporate power and authority
to own, lease and operate its properties and to conduct its business as
presently conducted and as described in the Prospectus; and the Company is
duly qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required
whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify would not have a material
adverse effect on the consolidated financial condition or earnings of the
Company and its subsidiaries considered as one enterprise.
(g) Except as contemplated in the Prospectus or reflected therein by the
filing of any amendment or supplement thereto or any Incorporated Document,
since the date of the most recent consolidated financial statements
included or incorporated by reference in the Registration Statement and the
Prospectus there has not been any material adverse change in the
consolidated financial condition or earnings of the Company and its
subsidiaries, considered as one enterprise.
(h) The Company is not in violation of its Certificate of Incorporation or
Bylaws. The execution and delivery of this Agreement by the Company, the
issuance and sale of the Debt Securities and the performance by the Company
of its obligations under this
3
Agreement and the Indenture will not conflict with or constitute a breach
of or a default (with the passage of time or otherwise) under (A) the
Certificate of Incorporation or Bylaws of the Company, (B) any contract,
indenture, mortgage, loan agreement, note, lease or other instrument to
which the Company is a party or by which it may be bound, or to which any
of the properties or assets of the Company is subject, which breach or
default would, singly or in the aggregate, reasonably be expected to have a
material adverse effect on the consolidated financial condition or earnings
of the Company and its subsidiaries, considered as one enterprise, or (C)
any applicable law, administrative regulation or administrative or court
decree. Except for orders, permits and similar authorizations required
under or by the securities or Blue Sky laws of certain jurisdictions, any
securities exchange on which any of the Debt Securities might be listed or
with respect to Debt Securities which are to be indexed or linked to any
foreign currency, composite currency, commodity, equity index or similar
index, no consent, approval, authorization or other order of any regulatory
body, administrative agency or other governmental body is legally required
for the valid issuance and sale of the Debt Securities.
(i) To the best of the Company's knowledge, the accountants who have
audited and reported upon the financial statements filed with the
Commission as part of the Registration Statement and the Prospectus are
independent accountants as required by the 1933 Act. The historical
financial statements included in the Registration Statement or Prospectus
or incorporated therein by reference fairly present the consolidated
financial position and results of operations of the Company, Disney and
Capital Cities and their respective subsidiaries at the respective dates
and for the respective periods to which they apply. Such financial
statements have been prepared in accordance with generally accepted
accounting principles consistently applied, except as set forth in the
Registration Statement and Prospectus. The selected financial data and the
summary historical financial information of Disney and Capital Cities
included in the Prospectus present fairly the information shown therein and
have been compiled on a basis consistent with that of the audited financial
statements of Disney and Capital Cities incorporated by reference in the
Registration Statement and the Prospectus. The unaudited pro forma
combined condensed financial statements (Disney/Capital Cities Combined
Company), together with the related notes and any supporting schedules
included in the Registration Statement and the Prospectus, present fairly
the information shown therein and have been compiled on a basis
substantially consistent with the audited financial statements of Disney
and Capital Cities incorporated by reference in the Registration Statement
and the Prospectus; the assumptions on which such unaudited pro forma
combined condensed financial statements have been prepared are reasonable
and such unaudited pro forma combined condensed financial statements have
been prepared, and the pro forma adjustments set forth therein have been
applied, in accordance with the applicable accounting requirements of the
1933 Act and the 1933 Act Regulations (including, without limitation,
Regulations S-X promulgated by the Commission), and such pro forma
adjustments have been properly applied to the historical amounts in the
compilation of such statements.
(j) Each of Disney, Capital Cities and Walt Disney World Co., a Delaware
corporation (collectively, the "Significant Subsidiaries"), is a validly
existing corporation in good standing in the state of its incorporation.
Each of the Significant Subsidiaries has full corporate power and authority
to own, lease and operate its properties and to conduct its business as
presently conducted and as described in the Prospectus; and each of the
Significant Subsidiaries is duly qualified as a foreign corporation to
transact business and
4
is in good standing in each United States jurisdiction in which such
qualification is required whether by reason of the ownership or leasing of
property or the conduct of business, except where a failure to so qualify
would not have a material adverse effect on the consolidated financial
condition or earnings of the Company and its subsidiaries, considered as
one enterprise.
(k) The Company has complied with, and is and will be in compliance with,
the provisions of that certain Florida act relating to disclosure of doing
business with Cuba, codified as Section 517.075 of the Florida statutes,
and the rules and regulations thereunder or is exempt therefrom.
Any certificate signed by any officer of the Company and delivered to any
Underwriter or to counsel for the Underwriters in connection with the offering
of the Debt Securities shall be deemed a representation and warranty by the
Company to such Underwriter as to the matters covered thereby on the date of
such certificate.
2. PUBLIC OFFERING. The Company is advised by the Representatives 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 Representatives' judgment is advisable. The terms of the public offering of
the Debt Securities have been provided by the Representatives 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 the Underwriting Agreement, upon delivery to the
Representatives for the respective accounts of the several Underwriters of the
Debt Securities, registered in such names and in such denominations as the
Representatives shall request in writing not less than two full business days
prior to the date of delivery, with any transfer taxes payable in connection
with the sale of the Debt Securities to the Underwriters duly paid. The Notes
may be represented by one or more global notes which may be deposited with a
custodian for, and registered in the name of, The Depository Trust Company or
its nominee.
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 Underwriting 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 the Blue Sky Survey and any Legal Investment 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
5
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 the following conditions:
(a) OPINION OF COUNSEL TO COMPANY. On the Closing Date, the Underwriters
shall have received an opinion from Skadden, Arps, Slate, Meagher & Flom,
counsel to the Company, dated as of the Closing Date and in form and
substance satisfactory to counsel for the Underwriters to the effect that:
(i) The Company and each of the Significant Subsidiaries is a
corporation validly existing and in good standing under the laws of
its state of incorporation.
(ii) The Company has full corporate power and corporate authority
to enter into and perform its obligations under this Agreement and the
Indenture, to borrow money as contemplated in this Agreement and the
Indenture and to issue, sell and deliver 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 and 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 (A)
bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors' rights
generally and (B) general principles of equity (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.
(v) No consent or approval of any United States governmental
authority or other United States person or United States entity is
required in connection with the issuance or sale of the Debt
Securities other than registration thereof under the 1933 Act,
qualification of the Indenture under the 1939 Act, and such
registrations or qualifications as may be necessary under the
securities or Blue Sky laws of the various United States jurisdictions
in which the Debt Securities are to be offered or sold.
(vi) The Debt Securities, when executed and authenticated in
accordance with the terms of the Indenture and delivered to and paid
for by the Underwriters, will be valid and binding obligations of the
Company entitled to the benefits of the Indenture and enforceable
against the Company in accordance with their terms, except to the
extent that enforcement thereof may be limited by (A) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and (B)
general principles of equity (regardless of whether enforceability is
considered in a proceeding at law or in equity).
6
(vii) The Registration Statement has become effective under the 1933
Act and the Indenture has been qualified under the 1939 Act, and such
counsel has been advised by the Commission that no stop order
suspending the effectiveness of the Registration Statement has been
issued and, to the best of such counsel's knowledge, no proceedings
for that purpose have been instituted or are pending or threatened by
the Commission.
(viii) The execution and delivery of this Agreement and the Indenture
by the Company, the issuance and sale of the Debt Securities and the
fulfillment of this Agreement and the Indenture by the Company will
not conflict with or constitute a breach of or a default (with the
passage of time or otherwise) under (A) the Certificate of
Incorporation or Bylaws of the Company, (B) any statute, law or
regulation to which the Company or any of its properties may be
subject or (C) any judgment, decree or order, known to such counsel,
of any court or governmental agency or authority entered in any
proceeding to which the Company was or is now a party or by which it
is bound; provided, that such counsel may state that (1) the opinion
set forth in clause (B) of this paragraph (viii) is limited to those
United States statutes, laws or regulations currently in effect which,
in such counsel's experience, are normally applicable to transactions
of the type contemplated by this Agreement, and (2) no opinion is
expressed as to the securities or Blue Sky laws of the various
jurisdictions in which the Debt Securities are to be offered and (3)
no opinion is expressed with respect to such clause (B) with respect
to Debt Securities which are indexed or linked to any foreign
currency, composite currency, commodity, equity index or similar
index.
(ix) The Registration Statement, as of the date it became
effective, and the Prospectus, as of the date of the Underwriting
Agreement, appear on their face to be appropriately responsive in all
material respects to the requirements of the 1933 Act, except that in
each case such counsel need not express an opinion as to (i) the
Incorporated Documents, (ii) the financial statements and schedules
and other financial data included or incorporated by reference therein
or excluded therefrom or (iii) the Form T-1.
(x) The statements in the Prospectus under the caption
"Description of the Debt Securities," "Description of the Notes" and
"Certain United States Federal Tax Considerations To United States
Aliens", insofar as they purport to summarize certain provisions of
documents specifically referred to therein, 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 have been reviewed by such
counsel and are accurate and complete in all material respects.
In rendering the opinions set forth above, such counsel may state that
(1) with respect to paragraphs (iv) and (vi), such enforcement may be
limited by (i) requirements that a claim with respect to any Debt
Securities denominated other than in United States dollars (or a judgment
denominated other than in United States dollars in respect of such claim)
be converted into United States dollars at a rate of exchange prevailing on
a date determined pursuant to applicable law and (ii) governmental
authority to limit, delay or prohibit the making of payments outside the
United States or in foreign currency or composite currency; and (2) with
respect to paragraphs (iv), (v) and (vi), no opinion is
7
expressed thereto with respect to any Debt Securities that are to be
indexed or linked to any foreign currency or composite currency, commodity,
equity index or similar index.
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 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 Incorporated Documents) at the time
such Registration Statement became effective, contained an untrue statement
of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading
or that the Prospectus (excluding the Incorporated Documents) as of the
date of the Underwriting Agreement and as of 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 Incorporated Documents, (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.
(b) OPINION OF COUNSEL EMPLOYED BY COMPANY. On the Closing Date, the
Underwriters shall have received an opinion from David K. Thompson, Senior
Vice President-Assistant General Counsel or from other counsel employed by
the Company (provided that such counsel is at least a vice president of the
Company), dated as of the date hereof and in form and substance
satisfactory to counsel for the Underwriters, to the effect that:
(i) Except as set forth in the Prospectus (including the
Incorporated Documents), there is not pending or, to the best of such
counsel's knowledge, after reasonable inquiry, threatened any action,
suit or proceeding against the Company or any of its subsidiaries
before or by any court or governmental agency or body, which is likely
(to the extent not covered by insurance) to have a material adverse
effect on the consolidated financial condition or earnings of the
Company and its subsidiaries, considered as one enterprise.
(ii) To the best of such counsel's knowledge, after reasonable
inquiry, there is no contract or document of a character required to
be described in the Registration Statement or the Prospectus or to be
filed as an exhibit to the Registration Statement which is not
described or filed as required.
(iii) To the best of such counsel's knowledge, after reasonable
inquiry, the Company is not in violation of its Certificate of
Incorporation or Bylaws.
(iv) To the best of such counsel's knowledge, after reasonable
inquiry, (x) the execution and delivery, and (y) the performance, of
this Agreement and the Indenture will not conflict with or constitute
a breach of, or default (with the
8
passage of time or otherwise) under, any material contract, indenture,
mortgage, loan agreement, note, lease or other instrument to which the
Company is a party or by which it may be bound, or to which any of the
property or assets of the Company or any of its subsidiaries is
subject.
(v) The Incorporated Documents, as of the date of the Underwriting
Agreement, complied as to form in all material respects with the
requirements of the 1933 Act, except that in each case such counsel
need not express an opinion as to the financial statements and
schedules and other financial data included or incorporated by
reference therein.
In addition, such counsel shall state that no facts have come to such
counsel's attention that have led him to believe that the Registration
Statement (including the Incorporated Documents) at the time such
Registration Statement became effective, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or that
the Prospectus (including the Incorporated Documents) as of the date of the
Underwriting Agreement and as of 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 the financial
statements, schedules and other financial data included or incorporated by
reference in, or excluded from, the Registration Statement or Prospectus or
with respect to the Form T-1.
(c) OPINION OF UNDERWRITERS' COUNSEL. On the Closing Date, the
Underwriters shall have received an opinion from counsel to the
Underwriters, dated as of the Closing Date and in form and substance
satisfactory to the Underwriters.
(d) OFFICER'S CERTIFICATE. On the 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 in all
material respects with the same force and effect as though expressly made
at and as of the date of such certificate, (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 and (iii) no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been initiated or, to the best of such
officer's knowledge, threatened by the Commission. The Officer's
Certificate shall further state that except as contemplated in the
Prospectus or reflected therein by the filing of any amendment or
supplement thereto or any Incorporated Document, at the Closing Date, there
shall not have been, since the date of the most recent consolidated
financial statements included or incorporated by reference in the
Prospectus, any material adverse change in the consolidated financial
condition or earnings of the Company and its subsidiaries considered as one
enterprise.
(e) COMFORT LETTERS. At the time of the execution of the Underwriting
Agreement, the Underwriters shall have received letters from the Company's
and, to the extent that financial information of Capital Cities is included
or incorporated by reference in the Registration Statement, Capital Cities'
independent certified public accountants, dated as
9
of the date of the Underwriting Agreement and in form and substance
reasonably satisfactory to the Underwriters.
(f) BRING-DOWN COMFORT LETTERS. On the Closing Date, the Underwriters
shall have received letters from the Company's and, to the extent that
financial information of Capital Cities is included or incorporated by
reference in the Registration Statement, Capital Cities' independent
certified public accountants dated as of the Closing Date, to the effect
that they reaffirm the statements made in the letter furnished pursuant to
subsection (e) of this Section 5, except that the specified date referred
to shall be a date not more than five business days prior to the Closing
Date.
(g) RATINGS. At the Closing Date, the debt securities included in the
Registration Statement shall have the ratings accorded by any "nationally
recognized statistical rating organization", as defined by the Commission
for purposes of Rule 436(g)(2) of the 1933 Act Regulations, if and as
specified in the Underwriting Agreement, and the Company shall have
delivered to the Representatives a letter, dated as of such date, from each
such rating organization, or other evidence satisfactory to the
Representatives, confirming that the Debt Securities have such ratings.
(h) OTHER DOCUMENTS. On the 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 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.
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 Representatives by notice to the Company at any time at or prior to the
Closing Date, and such termination shall be without liability of any party
to any other party, except that (i) the Company shall reimburse the
Underwriters for all of their reasonable out-of-pocket expenses, including
the reasonable fees and disbursements of counsel for the Underwriters and
(ii) the covenants set forth in Section 6(f) hereof, the indemnity and
contribution agreement set forth in Sections 7, 8, 9 and 10 hereof and the
provisions of Section 18 hereof shall remain in effect.
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 notify the Representatives
promptly of (i) the effectiveness of any post-effective amendment to the
Registration Statement (other than a post-effective amendment relating
solely to an offering of securities other than the Debt Securities),
(ii) the transmittal to the Commission for filing of any supplement to the
Prospectus (other than a supplement relating solely to an offering of
securities other than the Debt Securities), (iii) the receipt of any
comments from the Commission with respect to the Registration Statement or
the Prospectus (other than any comments relating solely to an offering of
securities other than the Debt Securities), (iv) any request by the
Commission for any amendment to the Registration Statement or any amendment
or supplement to the Prospectus or for additional information (other than
any such request relating solely to an offering of securities other than
the Debt Securities) and (v) the issuance by the Commission of any stop
order suspending the effectiveness
10
of the Registration Statement or the initiation of any proceedings for that
purpose. The Company will make every reasonable effort to prevent the
issuance of any such stop order and, if any such stop order is issued, to
obtain the lifting thereof at the earliest possible time unless the Company
shall, in its sole discretion, determine that it is not in its best
interest to do so.
(b) NOTICE OF CERTAIN PROPOSED FILINGS. During the period from the date
of the Underwriting Agreement to and including the Closing Date, at or
prior to the filing thereof, the Company will give the Representatives
notice of its intention to file any additional registration statement with
respect to the registration of additional Debt Securities to be covered by
this Agreement, any amendment to the Registration Statement or any
amendment or supplement to the Prospectus (other than an amendment or
supplement relating solely to an offering of securities other than the Debt
Securities), whether by the filing of documents pursuant to the 1934 Act,
the 1933 Act or otherwise, and will furnish the Underwriters with copies of
any such amendment or supplement or other documents a reasonable amount of
time prior to such proposed filing or use, as the case may be, and will not
file or use any such document to which the Representatives or counsel to
the Underwriters 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.
(c) COPIES OF THE REGISTRATION STATEMENT AND THE PROSPECTUS. The Company
will deliver to the Underwriters one copy of the Registration Statement (as
originally filed) and of each amendment thereto (including the Incorporated
Documents and any exhibits filed therewith or incorporated by reference
therein) and the preliminary prospectus as the Representatives may
reasonably request. The Company will furnish to the Underwriters as many
copies of the Prospectus (as amended or supplemented) as the
Representatives shall reasonably request so long as the Underwriters are
required to deliver a Prospectus in connection with sales or solicitations
of offers to purchase the Debt Securities.
(d) REVISIONS OF REGISTRATION STATEMENT AND PROSPECTUS -- MATERIAL
CHANGES. So long as the Underwriters are required to deliver a Prospectus
in connection with sales of the Debt Securities, if any event shall occur
or condition exist as a result of which it is necessary, in the opinion of
counsel for the Company, after consultation with counsel for the
Underwriters, to further amend or supplement the Prospectus in order that
the Prospectus will not include an untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
therein not misleading in light of the circumstances existing at the time
it is delivered to a purchaser, or if it shall be necessary, in the opinion
of counsel for the Company, to amend or supplement the Registration
Statement or the Prospectus in order to comply with the requirements of the
1933 Act or the 1933 Act Regulations, prompt notice shall be given, and
confirmed in writing, to the Representatives, and the Company will prepare
and file as soon as practicable such amendment or supplement to the
Registration Statement or Prospectus as may be necessary to correct such
misstatement or omission or to make the Registration Statement or the
Prospectus comply with such requirements and the Company will furnish to
the Underwriters, without charge, such number of copies of such amendment
or supplement as the Underwriters may reasonably request. The filing of
any such amendment or supplement shall not constitute a waiver of any of
the conditions set forth in Section (5) hereof or of Section 11 (i).
11
(e) COMPLIANCE WITH 1934 ACT. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act,
will comply, in a timely manner, with all applicable requirements under the
1934 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 1934 Act and, if
then applicable, the Company's proxy statements pursuant to Section 14(a)
of the 1934 Act.
(f) EARNINGS STATEMENT. The Company will make generally available to its
security holders, as soon as practicable but in any event not later than 15
months after the Closing Date, a consolidated earnings statement (which
need not be audited) covering the twelve-month period beginning after the
latest of (i) the effective date of the Registration Statement, (ii) the
effective date of the most recent post-effective amendment to the
Registration Statement to become effective or (iii) the Company's most
recent annual report on Form 10-K filed with the Commission prior to the
Closing Date, which earnings statement will satisfy the provisions of
Section 11(a) of the 1933 Act. The Company may elect to rely upon Rule
158 under the 1933 Act and may elect to make such earnings statement
available more frequently than once in any period of twelve months.
(g) BLUE SKY QUALIFICATIONS. The Company will endeavor, in cooperation
with the Underwriters, to qualify the Debt Securities for offering and sale
under the applicable securities laws of such states in the United States as
the Representatives may reasonably designate, and will maintain such
qualifications in effect for as long as may be required for the
distribution of the Debt Securities; provided, however, that the Company
will promptly notify the Representatives of any suspension or termination
of any such qualifications and; provided, further, 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 so subject.
7. INDEMNIFICATION OF THE UNDERWRITERS. The Company agrees to indemnify
and hold harmless each Underwriter and each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act as follows:
(a) against any and all loss, liability, claim, damage and expense
whatsoever (including, subject to the limitations set forth in Section 9
hereof, the reasonable fees and disbursements of counsel chosen by the
Underwriters), as incurred, insofar as such loss, liability, claim, damage
or expense arises out of any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement (or any
amendment thereto), or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the
statements therein not misleading, or arises out of any untrue statement or
alleged untrue statement of a material fact contained 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 light of the circumstances under which they were made, not
misleading;
(b) against any and all loss, liability, claim, damage and expense
whatsoever (including, subject to the limitations set forth in Section 9
hereof, the reasonable fees and disbursements of counsel chosen by the
Underwriters), as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever insofar as such loss, liability, claim, damage or expense arises
out of any such untrue
12
statement or omission, or any such alleged untrue statement or omission, if
such settlement is effected with the written consent of the Company; and
(c) against any and all expense whatsoever (including, subject to the
limitations set forth in Section 9 hereof, the reasonable fees and
disbursements of counsel chosen by the Underwriters), as incurred,
reasonably incurred in investigating, preparing or defending against any
litigation, or 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;
PROVIDED, HOWEVER, that this indemnity shall not apply to any loss,
liability, claim, damage or expense (A) to the extent arising out of or
based upon any untrue statement or omission or alleged untrue statement or
omission made in reliance upon the Form T-1 under the 1939 Act filed as an
exhibit to the Registration Statement; or (B) to the extent arising out of
any untrue statement or omission or alleged untrue statement or omission in
the Prospectus if such untrue statement or alleged untrue statement or
omission or alleged omission is corrected in all material respects in an
amendment or supplement to the Prospectus and if, having previously been
furnished by or on behalf of the Company with copies of the Prospectus, as
so amended or supplemented, such Underwriter thereafter failed to deliver
such Prospectus, as so amended or supplemented, if required to be delivered
by such Underwriter prior to or concurrently with the sale of the Debt
Securities to the person asserting such loss, liability, claim, damage or
expense who purchased such the Debt Securities which are the subject
thereof from such Underwriter; or (C) as to which such Underwriter may be
required to indemnify the Company pursuant to the provisions of Section 8.
8. INDEMNIFICATION OF THE COMPANY. Each Underwriter severally (and not
jointly) 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 1933 Act or
Section 20 of the 1934 Act against any and all loss, liability, claim, damage
and expense described in the indemnity contained in subsection (a) of Section 7
hereof, as incurred, but only with respect to untrue statements or omissions, or
alleged untrue statements or omissions, made in the Registration Statement (or
any amendment thereto) or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by such Underwriter through the Representatives expressly for use
in the Registration Statement or the Prospectus.
9. GENERAL. In case any action, suit or proceeding (including any
governmental or regulatory investigation or proceeding) shall be brought against
any Underwriter or any person controlling such Underwriter, based upon the
Registration Statement or the Prospectus and with respect to which indemnity may
be sought against the Company pursuant to Section 7, such Underwriter or
controlling person shall promptly notify the Company in writing, and the Company
shall assume the defense thereof, including the employment of counsel (such
counsel to be reasonably acceptable to such Underwriter) and payment of all
expenses. Any such Underwriter or any such controlling person shall have the
right to employ separate counsel in any such action, suit or proceeding and to
participate in the defense thereof, but the fees and expenses of such separate
counsel shall be at the expense of such Underwriter or such controlling person
unless (A) the employment of such counsel shall have been specifically
authorized in writing by the Company, (B) the Company shall have failed to
assume the defense and employ counsel or (C) the named parties to any such
action, suit or proceeding (including any impleaded parties) shall include both
such Underwriter or such controlling person and the Company, and
13
such Underwriter or such controlling person shall have been advised by counsel
that there may be one or more legal defenses available to it which are different
from, or additional to, those available to the Company (in which case, if such
Underwriter or such controlling person notifies the Company in writing that it
selects to employ separate counsel at the expense of the Company, the Company
shall not have the right to assume the defense of such action, suit or
proceeding on behalf of such Underwriter or such controlling person, it being
understood, however, that the Company shall not, in connection with any one such
action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of more than one separate firm of
attorneys (in addition to any local counsel) for all such Underwriters and such
controlling persons, which firm shall be designated in writing by the
Representatives on behalf of all of such Underwriters and such controlling
persons).
In case any action, suit or proceeding (including any governmental or
regulatory investigation or proceeding) shall be brought against the Company,
any of the Company's directors or officers, or any person controlling the
Company, with respect to which indemnity may be sought against any Underwriter
pursuant to Section 8, such Underwriter shall have the rights and duties given
to the Company by this Section 9, and the Company, the Company's directors and
officers and any such controlling person shall have the rights and duties given
to the Underwriters by this Section 9.
10. CONTRIBUTION. In order to provide for just and equitable contribution
in circumstances in which the indemnity agreement provided for in Sections 7 and
8 hereof is for any reason held to be unenforceable with respect to the
indemnified parties although applicable in accordance with its terms, the
Company and the Underwriters shall contribute to the aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by said
indemnity agreement incurred by the Company and the Underwriters, as incurred,
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 hand from the
offering of the Debt Securities. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law or if the
indemnified party failed to give the notice required pursuant to Section 9
hereof or pursuant to the last sentence of this Section 10, then the Company and
the Underwriters shall contribute to such aggregate losses, liabilities, claims,
damages and expenses incurred by the Company and the Underwriters, as incurred,
in such proportion as is appropriate to reflect not only such relative benefits
but also the relative fault of the Company on the one hand and the Underwriters
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 Underwriters on the other hand in connection with the
offering of the Debt Securities shall be deemed to be in the same proportion as
the total net proceeds from the sale of the Debt Securities received by the
Company (before deducting expenses) bear to the total commissions or other
compensation or remuneration received by the Underwriters in respect thereof.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. Notwithstanding the provisions of this Section 10, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Debt Securities purchased by it exceeds
the amount of any damages which such Underwriter has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of
14
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. For purposes of this
Section 10, each person, if any, who controls an Underwriter within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same
rights to contribution as such Underwriter, and each director of the Company,
each officer of the Company who signed the Registration Statement and each
person, if any, who controls the Company within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as the Company. Any party entitled to contribution pursuant to the
first sentence of this Section 10, will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in respect of
which a claim for contribution may be made against another party or parties
under this Section 10, notify such party or parties from whom contribution may
be sought, but the omission to so notify such party or parties shall not relieve
the party or parties from whom contribution may be sought, from any other
obligation it or they may have otherwise than under this Section 10; PROVIDED,
HOWEVER, that such notice need not be given if such party entitled to
contribution hereunder has previously given notice pursuant to Section 9 hereof
with respect to the same action, suit or proceeding.
11. TERMINATION. The Underwriters may terminate the Underwriting
Agreement immediately upon notice to the Company, at any time prior to the
Closing Date if (i) there has been, since the date of the Underwriting Agreement
or since the respective dates as of which information is given in the
Registration Statement or Prospectus, any material adverse change in the
consolidated financial condition or earnings of the Company and its
subsidiaries, considered as one enterprise, (ii) there has occurred any material
adverse change in the financial markets in the United States or any outbreak or
escalation of hostilities or other calamity or crisis, the effect of which is
such as to make it, in the reasonable judgment of the Representatives,
impracticable to market the Debt Securities or to enforce contracts for the sale
of the Debt Securities, (iii) if trading in any securities of the Company has
been suspended (other than pursuant to a request by the Company with respect to
an announcement by the Company of certain information not constituting a
material adverse change, since the date of the Underwriting Agreement or the
respective date as of which information is given in the Registration Statement,
in the consolidated financial condition or earnings of the Company and its
subsidiaries, considered as one enterprise), the effect of which is such as to
make it, in the reasonable judgment of the Representatives, impracticable to
market the Debt Securities or to enforce contracts for the sale of the Debt
Securities, (iv) if trading generally on the New York Stock Exchange has been
suspended, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices for securities shall have been required, by such exchange or
by order of the Commission or any other governmental authority, or if a banking
moratorium has been declared by either Federal or New York authorities or if a
banking moratorium has been declared by the relevant authorities in the country
or countries of origin of any foreign currency or currencies in which the Debt
Securities are denominated or payable or (v) after the date of the Underwriting
Agreement, the rating assigned by any nationally recognized securities rating
agency to any debt securities of the Company or its Significant Subsidiaries as
of the date of the Underwriting Agreement shall have been lowered or any such
rating agency shall have publicly announced that it has placed any debt
securities of the Company or its Significant Subsidiaries on what is commonly
termed a "watch list" with negative implications.
In the event of any such termination, no party will have any liability to
any other party hereto, except that (i) the covenants set forth in Section 6(f)
hereof, the indemnity and contribution agreement set forth in Sections 7, 8, 9
and 10 hereof and the provisions of Section 18 hereof shall remain in effect and
(ii) if the Underwriting Agreement is terminated by the Underwriters in
accordance with the provisions of Section 11(i) hereof, the Company shall
15
reimburse the Underwriters for all of their out-of-pocket expenses, including
the reasonable fees and disbursements of counsel for the Underwriters.
12. 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 Representatives 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
Representatives and the Company for the purchase of such Debt Securities are not
made within 36 hours after such default, this Agreement shall terminate without
liability on the part of any non-defaulting Underwriter or the Company. In any
such case either the Representative 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.
13. SELLING AND OTHER RESTRICTIONS. (a) Each Underwriter, on behalf of
itself and each of its affiliates that participates in the initial distribution
of the Debt Securities, severally represents to and agrees with the Company
that:
(i) (a) it has not offered or sold and will not offer or sell any
of the Debt Securities to persons in the United Kingdom (the "U.K.")
except to persons whose ordinary activities involve them in acquiring,
holding, managing or disposing of investments (as principal or agent)
for the purposes of their businesses or otherwise in circumstances
which have not resulted and will not result in an offer to the public
in the U.K. within the meaning of the Public Offers of Securities
Regulation 1995; (b) it has complied and will comply with all
applicable provisions of the Financial Services Act 1986 with respect
to anything done by it in relation to the Debt Securities in, from or
otherwise involving the U.K.; and (c) it has only issued or passed on,
and will only issue or pass on, in the U.K. any document received by
it in connection with the issue of the Debt Securities to a person who
is of a kind described in Article 11(3) of the Financial Services Act
1986 (Investment Advertisement) (Exemptions) Order 1995 or is a person
to whom the document may otherwise lawfully be issued or passed on.
(ii) it will not offer or sell any Debt Securities directly or
indirectly in Japan or to or for the benefit of any Japanese person or
to others, for re-offering or re-sale directly or indirectly in Japan
or to any Japanese person except under circumstances which will result
in compliance with all applicable laws, regulations and guidelines
promulgated by the relevant governmental and regulatory authorities in
effect at the relevant time. For purposes of this subparagraph (ii),
16
"Japanese person" shall mean any person resident in Japan, including
any corporation or other entity organized under the laws of Japan.
(iii) it has not distributed and will not distribute the preliminary
prospectus or the Prospectus in Hong Kong other than to persons whose
business involves the acquisition, disposal or holding of securities,
whether as principal or as agent, unless such Underwriter is a person
permitted to do so under the securities laws of Hong Kong.
(b) In addition to the provisions of subparagraph (a)(i), (ii) and (iii)
of this Section 13, each Underwriter severally represents to and agrees
with the Company that it has not offered, sold or delivered and that it
will not offer, sell or deliver, directly or indirectly, any of the Debt
Securities or distribute the Prospectus, any preliminary prospectus or any
other material relating to the Debt Securities, in or from any jurisdiction
except under circumstances that will, to the best of its knowledge and
belief, result in compliance with the applicable laws and regulations
thereof and which will not impose any obligations on the Company except as
contained in this Agreement.
(c) Without prejudice to the other provisions of this Section 13 and
except for registration under the 1933 Act and compliance with the 1933 Act
Regulations and the qualification of the Debt Securities for offer and sale
under the applicable securities laws of such jurisdictions within the
United States as the Representatives may designate pursuant to Section
6(g), the Company shall not have any responsibility for, and each
Underwriter severally agrees with the Company that each such Underwriter
and its respective affiliates will obtain, any consent, approval or
authorization required by them for the subscription, offer, sale or
delivery by them of any of the Debt Securities under the laws and
regulations in force in any jurisdiction to which they are subject or in or
from which they make such subscription, offer, sale or delivery of any of
the Debt Securities.
14. 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.
15. PARTIES. This Agreement shall inure to the benefit of and be binding
upon the Company and the Underwriters 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 Underwriters and the
Company and their respective successors and the controlling persons and officers
and directors referred to in Sections 7 and 8 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 parties hereto 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 Debt Securities from any Underwriter shall be deemed to be a
successor by reason merely of such purchase.
16. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company submitted pursuant hereto shall remain
operative and in full force and effect, regardless of any investigation made by
or on behalf of any Underwriter or controlling
17
person, or by or on behalf of the Company, and shall survive delivery of and
payment for the Debt Securities.
17. MISCELLANEOUS. The Underwriting Agreement may be signed in any number
of counterparts, each of which shall be an original, with the same effect as if
the signatures thereto were upon the same instrument.
18. CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK WITH RESPECT TO CONTRACTS MADE IN AND TO BE PERFORMED WHOLLY
WITHIN THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES
THEREOF.
19. HEADINGS. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
18