INGERSOLL-RAND COMPANY
(a New Jersey Corporation)
INGERSOLL-RAND FINANCING I
(a Delaware Business Trust)
14,000,000 FELINE PRIDES
and
1,400,000 Capital Securities
UNDERWRITING AGREEMENT
Dated: March 17, 1998
Ingersoll-Rand Company
(a New Jersey Corporation)
INGERSOLL-RAND FINANCING I
(a Delaware Business Trust)
14,000,000 FELINE PRIDESSM
(Stated Amount of $25 per FELINE PRIDES),
consisting of
12,600,000 Income PRIDESsm
each consisting of
a Purchase Contract of Ingersoll-Rand Company Requiring the
Purchase on May 16, 2001 (or earlier) of certain Shares
of Common Stock of Ingersoll-Rand Company
and
a 6.22% Capital Security of Ingersoll-Rand Financing I
and
1,400,000 Growth PRIDESSM
each consisting of
a Purchase Contract of Ingersoll-Rand Company Requiring the
Purchase on May 16, 2001 (or earlier) of certain Shares
of Common Stock of Ingersoll-Rand Company
and
a 1/40 Undivided Beneficial Interest in a Zero-Coupon U.S.
Treasury Security Having a Principal Amount Equal
to $1,000 and maturing on May 15, 2001;
and
1,400,000 6.22% Capital Securities of
Ingersoll-Rand Financing I (Liquidation Amount $25 per
Capital Security)
UNDERWRITING AGREEMENT
March 17, 1998
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Merrill Lynch World Headquarters
World Financial Center
North Tower
New York, New York 10281-12091
Ladies and Gentlemen:
Ingersoll-Rand Company, a New Jersey corporation (the
"Company"), and Ingersoll-Rand Financing I, a Delaware statutory
business trust (the "Trust" and, together with the Company, the
"Offerors"), confirm their agreement with Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated (the "Under
writer"), with respect to the sale to the Underwriter of
14,000,000 FELINE PRIDES and 1,400,000 6.22% Capital Securities
(the "Capital Securities" and, together with the FELINE PRIDES,
the "Initial Securities") of the Trust. The FELINE PRIDES will
initially consist of (A) 12,600,000 units (referred to as "Income
PRIDES") with a Stated Amount, per Income PRIDES, of $25 (the
"Stated Amount") and (B) at least 1,400,000 units (referred to as
"Growth PRIDES") with a face amount, per Growth PRIDES, equal to
the Stated Amount. Each Income PRIDES will initially consist of
a unit comprised of (a) a stock purchase contract (a "Purchase
Contract") under which (i) the holder will purchase from the
Company on May 16, 2001 (the "Purchase Contract Settlement
Date"), for an amount of cash equal to the Stated Amount, a
number of newly issued shares of common stock, $2 par value per
share (the "Shares"), of the Company equal to the Settlement Rate
described herein, and (ii) the Company will pay the holder
unsecured contract adjustment payments ("Contract Adjustment
Payments") at the rate of 6.22% of the Stated Amount per annum
and (b) beneficial ownership of a Capital Security. Each Growth
PRIDES will initially consist of a unit comprised of (a) a
Purchase Contract under which (i) the holder will purchase from
the Company on the Purchase Contract Settlement Date, for an
amount in cash equal to the Stated Amount, the number of Shares
of Common Stock of the Company, equal to the Settlement Rate, and
(ii) the Company will pay the holder Contract Adjustment
Payments, at the rate of 6.22% of the Stated Amount per annum, and
(b) a 1/40 undivided beneficial interest in a zero-coupon U.S.
Treasury Security (CUSIP No. 912820 BAY) in an amount equal to
$1,000 payable on May 15, 2001 (the "Treasury Securities"). The
Company and the Trust also propose to grant to the Underwriter
options to purchase up to 1,890,000 additional Income PRIDES
210,000 additional Growth PRIDES and 210,000 additional Capital
Securities (the "Option Securities" and together with the Initial
Securities, the "Securities") as described in Section 2(b)
hereof. In accordance with the terms of the Purchase Contract
Agreement (as defined below), to be dated as of March 23, 1998,
between the Company and The Bank of New York, as Purchase
Contract Agent (the "Purchase Contract Agent"), the Capital
Securities constituting a part of the Income PRIDES, and the
Treasury Securities constituting a part of the Growth PRIDES,
will be pledged by the Purchase Contract Agent, on behalf of the
holders of the Securities, to the Chase Manhattan Bank, as Collateral
Agent, pursuant to the Pledge Agreement, to be dated as of
March 23, 1998 (the "Pledge Agreement"), among the Company, the
Purchase Contract Agent and the Collateral Agent, to secure the
holders' obligation to purchase Common Stock under the Purchase
Contracts. The rights and obligations of a holder of Securities
in respect of Capital Securities, subject to the pledge thereof,
and Purchase Contracts will be evidenced by Security Certificates
(the "Security Certificates") to be issued pursuant to the
Purchase Contract Agreement.
The Capital Securities and Common Securities (as defined
below) will be guaranteed by the Company with respect to
distributions and payments upon liquidation, redemption and
otherwise (the "Guarantee") pursuant to the Guarantee Agreement,
to be dated as of March 23, 1998 (the "Guarantee Agreement"),
executed and delivered by the Company and The First National Bank of
Chicago, as trustee (the "Guarantee Trustee"), for the benefit of
the holders from time to time of the Capital Securities and the
Common Securities, and certain back-up undertakings of the
Company. All of the net proceeds from the sale of the Capital
Securities will be combined with the entire net proceeds from the
sale by the Trust to the Company of its common securities (the
"Common Securities" and, together with the Capital Securities,
the "Trust Securities") will be used by the Trust to purchase the
% Debentures due May 16, 2003 (the "Debentures") of the Company.
The Trust Securities will be issued pursuant to the amended and
restated declaration of trust of the Trust, dated as of March 23,
1998 (the "Declaration"), among the Company, as Sponsor, Ronald
G. Heller, Nancy Casablanca and Patricia Nachtigal (the "Regular
Trustees"), and The First National Bank of Chicago, as the
institutional trustee (the "Institutional Trustee") and First Chicago
Delaware, Inc., as the Delaware trustee (the "Delaware Trustee"
and, together with the Institutional Trustee and the Regular
Trustees, the "Trustees"), and the holders from time to time of
undivided beneficial interests in the assets of the Trust. The
Debentures will be issued pursuant to the Indenture, dated as of
March 17, 1998 (the "Base Indenture"), between the Company and
The Bank of New York, as Trustee (the "Debt Trustee"), as supple
mented by the First Supplemental Indenture, dated March 23, 1998
(the Base Indenture, as supplemented and amended, being referred
to as the "Indenture"). Capitalized terms used
herein without definition shall be used as defined in the
Prospectus.
Prior to the purchase and public offering of the Securities
by the Underwriter, the Offerors and the Underwriter shall enter
into an agreement substantially in the form of Exhibit A hereto
(the "Pricing Agreement"). The Pricing Agreement may take the
form of an exchange of any standard form of written communication
between the Offerors and the Underwriter and shall specify such
applicable information as is indicated in Exhibit A hereto. The
offering of the Securities will be governed by this Agreement, as
supplemented by the Pricing Agreement. From and after the date
of the execution and delivery of the Pricing Agreement, this
Agreement shall be deemed to incorporate the Pricing Agreement.
Pursuant to a remarketing agreement (the "Remarketing
Agreement") to be dated as of March 23, 1998, among the Company,
the Trust, the Purchase Contract Agent and a nationally recognized
investment banking firm chosen by the Company, the Capital
Securities may be remarketed, subject to certain terms and
conditions.
The Company and the Trust have filed with the Securities and
Exchange Commission (the "Commission") a registration statement
on Form S-3 (No. 333-38367) and pre-effective amendment no. 1
thereto covering the registration of securities of the Company
and the Trust, including the Securities and the Purchase Contracts
and Capital Securities included in, and Shares underlying,
the Securities, under the Securities Act of 1933, as amended (the
"1933 Act"), including the related preliminary prospectus or
prospectuses, and the offering thereof from time to time in
accordance with the rules and regulations of the Commission under
the 1933 Act (the "1933 Act Regulations") and the Company has
filed such post-effective amendments thereto as may be required
prior to the execution of the Pricing Agreement. Such registration
statement, as so amended, has been declared effective by the
Commission. Such registration statement, as so amended, including
the exhibits and schedules thereto, if any, and the information,
if any, deemed to be a part thereof pursuant to Rule
430A(b) of the 1933 Act Regulations (the "Rule 430A Information")
or Rule 434(d) of the 1933 Act Regulations (the "Rule 434
Information"), is referred to herein as the "Registration Statement";
and the final prospectus relating to the offering of the Securities,
in the form first furnished to the Underwriter by the Company for
use in connection with the offering of the Securities, are collectively
referred to herein as the "Prospectus"; provided, however, that all
references to the "Registration Statement" and the "Prospectus"
shall be deemed to include all documents incorporated therein by
reference pursuant to the Securities Exchange Act of 1934, as amended
(the "1934 Act"), prior to the execution of the applicable Pricing
Agreement;provided, further, that if the Offerors file a registration
statement with the Commission pursuant to Section 462(b) of the
1933 Act Regulations (the "Rule 462(b) Registration Statement"),
then after such filing, all references to "Registration Statement"
shall be deemed to include the Rule 462(b) Registration
Statement; and provided, further, that if the Offerors elect to
rely upon Rule 434 of the 1933 Act Regulations, then all references
to "Prospectus" shall be deemed to include the final or
preliminary prospectus and the applicable term sheet or abbreviated
term sheet (the "Term Sheet"), as the case may be, in the form first
furnished to the Underwriter by the Company in reliance upon Rule
434 of the 1933 Act Regulations, and all references in this
Underwriting Agreement to the date of the Prospectus shall mean
the date of the Term Sheet. A "preliminary prospectus" shall be
deemed to refer to any prospectus used before the registration
statement became effective and any prospectus that omitted, as
applicable, the Rule 430A Information, the Rule 434 Information
or other information to be included upon pricing in a form of
prospectus filed with the Commission pursuant to Rule 424(b) of
the 1933 Act Regulations, that was used after such effectiveness
and prior to the execution and delivery of the applicable Pricing
Agreement. For purposes of this Agreement, all references to the
Registration Statement, any preliminary prospectus, the Prospectus
or any Term Sheet or any amendment or supplement to any of the
foregoing shall be deemed to include the electronically transmitted
copy thereof filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval system ("EDGAR").
All references in this Agreement to financial statements and
schedules and other information which is "contained," "included"
or "stated" in the Registration Statement, any preliminary
prospectus or the Prospectus (or other references of like import)
shall be deemed to mean and include all such financial statements
and schedules and other information which is incorporated by
reference in the Registration Statement, any preliminary prospectus
or the Prospectus, as the case may be; and all references in
this Agreement to amendments or supplements to the Registration
Statement, any preliminary prospectus or the Prospectus shall be
deemed to mean and include the filing of any document under the
1934 Act which is incorporated by reference in the Registration
Statement, such preliminary prospectus or the Prospectus, as the
case may be.
The Offerors understand that the Underwriter proposes to
make a public offering of the Securities as soon as the Under
writer deems advisable after the Pricing Agreement has been
executed and delivered and the Declaration, the Indenture and the
Guarantee Agreement have been qualified under the Trust Indenture
Act of 1939, as amended (the "1939 Act").
SECTION 1. Representations and Warranties.
(a) The Offerors represent and warrant to each Underwriter
as of the date hereof, as of the date of the Pricing Agreement
and as of each Date of Delivery (as defined) (such later date
being hereinafter referred to as the "Representation Date") that:
(i) No stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that
purpose has been initiated or, to the knowledge of the Offerors,
threatened by the Commission.
(ii) The Company and the Trust meet, and at the
respective times of the commencement and consummation of the
offering of the Securities will meet, the requirements for the
use of Form S-3 under the 1933 Act. Each of the Registration
Statement and any Rule 462(b) Registration Statement has become
effective under the 1933 Act. At the respective times the
Registration Statement, any Rule 462(b) Registration Statement
and any post-effective amendments thereto became effective and at
each Representation Date, the Registration Statement, any Rule
462 Registration Statement and any amendments or supplements
thereto complied and will comply in all material respects with
the requirements of the 1933 Act and the 1933 Act Regulations and
the 1939 Act and the rules and regulations of the Commission
under the 1939 Act (the "1939 Act Regulations") and did not and
will not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or
necessary to make the statements therein not misleading. At
the date of the Prospectus and at the Closing Time (as defined
herein), the Prospectus and any amendments and supplements thereto
did not and will 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 Offerors elect to rely
upon Rule 434 of the 1933 Act Regulations, the Offerors will
comply with the requirements of Rule 434. Notwithstanding the
foregoing, the representations and warranties in this subsection
shall not apply to (A) statements in or omissions from the
Registration Statement or the Prospectus made in reliance upon
and in conformity with information furnished to the Offerors in
writing by the Underwriter expressly for use in the Registration
Statement or the Prospectus or (B) the part of the Registration
Statement which shall constitute the Statement of Eligibility
(Form T-1) under the 1939 Act.
Each preliminary prospectus and prospectus filed as
part of the Registration Statement as originally filed or as part
of any amendment thereto, or filed pursuant to Rule 424 under the
1933 Act, complied as so filed in all material respects with the
1933 Act Regulations and, if applicable, each preliminary prospectus
and the Prospectus delivered to the Underwriter for use in connection
with the offering of the Securities will, at the time of such delivery,
be identical to the electronically transmitted copies thereof filed
with the Commission pursuant to EDGAR, except to the extent permitted
by Regulation S-T.
(iii) The documents incorporated or deemed to be
incorporated by reference in the Registration Statement or the
Prospectus, at the time they were or hereafter are filed or last
amended, as the case may be, with the Commission, complied and
will comply in all material respects with the requirements of the
1934 Act, and the rules and regulations of the Commission there
under (the "1934 Act Regulations"), and at the time of filing or
as of the time of any subsequent amendment, 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, in the light of the circumstances under which
they were or are made, not misleading; and any additional documents
deemed to be incorporated by reference in the Registration
Statement or the Prospectus will, if and when such documents are
filed with the Commission, or when amended, as appropriate,
comply in all material respects to the requirements of the 1934
Act and the 1934 Act Regulations and will not contain an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading; 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 Offerors by the Underwriter expressly for use in the
Registration Statement or the Prospectus.
(iv) The accountants who certified the financial statements
and supporting schedules included or incorporated by reference in
the Registration Statement and the Prospectus are independent public
accountants as required by the 1933 Act and the 1933 Act Regulations.
(v) The financial statements of the Company included
or incorporated by reference in the Registration Statement and
the Prospectus, together with the related schedules and notes,
present fairly the financial position of the Company and its
consolidated subsidiaries as at the dates indicated and the
results of their operations for the periods specified in all
material respects. Such financial statements have been prepared
in conformity with generally accepted accounting principles
("GAAP") applied on a consistent basis throughout the periods
involved. The supporting schedules, if any, included or
incorporated by reference in the Registration Statement and the
Prospectus present fairly in accordance with GAAP the information
required to be stated therein in all material respects. The
ratio of earnings to fixed charges included in the Prospectus has
been calculated in compliance with Item 503(d) of Regulation S-K
of the Commission. The selected financial information and the
summary financial data included in the Prospectus present fairly
in all material respects the information shown therein and have
been compiled on a basis consistent with that of the audited
financial statements included in the Registration Statement and
the Prospectus. The pro forma financial statements and the
related notes thereto included in the Registration Statement and
the Prospectus present fairly in all material respects the
information shown therein, have been prepared in accordance with
the Commission's rules and guidelines with respect to pro forma
financial statements and have been properly compiled on the bases
described therein, and the assumptions used in the preparation
thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions and circumstances
referred to therein.
(vi) Since the respective dates as of which information
is given in the Registration Statement and the Prospectus, and
except as otherwise stated therein, (A) there has been no material
adverse change and no development which could reasonably be expected
to result in a material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs of the Company and
its subsidiaries, considered as one enterprise whether or not arising
in the ordinary course of business (a "Material Adverse Effect"),
(B) there have been no transactions entered into by the Company or
any of its subsidiaries, other than those arising in the ordinary
course of business, which are material with respect to the Company
and its subsidiaries, considered as one enterprise, (C) except for
regular dividends on the Common Stock in amounts per share that are
consistent with past practice or the applicable charter document or
supplement thereto, respectively, there has been no dividend or
distribution of any kind declared, paid or made by the Company on
any class of its capital stock.
(vii) The Company has been incorporated, is validly
existing as a corporation and is in good standing under the laws
of the State of New Jersey, has the 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 to enter into and perform its obligations under, or as
contemplated under, this Agreement, the Pricing Agreement, the
Remarketing Agreement, the Purchase Contract Agreement, the
Pledge Agreement and the Guarantee Agreement. The Company is
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 or be in good standing would not have a Material
Adverse Effect.
(viii) Other than the Trust, each "Significant Subsidiary"
(as defined in Rule 1-02 of Regulation S-X of the 1933 Act) of the
Company is set forth on Schedule I hereto, has been incorporated and
is validly existing as a corporation in good standing under the laws
of the jurisdiction of its incorporation, has the 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 is 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 or be
in good standing would not have a Material Adverse Effect. Except as
otherwise stated in the Registration Statement and the Prospec-
tus, all of the issued and outstanding shares of capital stock of
each subsidiary of the Company have been authorized and validly
issued, are fully paid and non-assessable and all such shares are
owned by the Company, directly or through its subsidiaries, free
and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity. None of the outstanding shares of
capital stock of the subsidiaries was issued in violation of
preemptive or other similar rights arising by operation of law,
under the charter or by-laws of any subsidiary or under any
agreement to which the Company or any subsidiary is a party, or
otherwise.
(ix) The authorized, issued and outstanding capital
stock of the Company is as set forth in the Prospectus; since the
date indicated in the Prospectus there has been no change in the
consolidated capitalization of the Company and its subsidiaries
(other than changes in outstanding Common Stock resulting from em-
ployee benefit plan or dividend reinvestment and stock purchase
plan transactions); and all of the issued and outstanding capital
stock of the Company has been authorized and validly issued, is
fully paid and non-assessable and conforms to the descriptions
thereof contained in the Prospectus.
(x) The Trust has been created and is validly existing
in good standing as a business trust under the Delaware Business
Trust Act (the "Delaware Act") with the power and authority to
own property and to conduct its business as described in the
Registration Statement and Prospectus and to enter into and
perform its obligations under this Agreement, the Pricing Agree-
ment, the Remarketing Agreement, the Capital Securities and the
Declaration; the Trust is qualified to transact business as a
foreign company and is in good standing in each jurisdiction in
which such qualification is necessary, except where the failure
to so qualify or be in good standing would not have a Material
Adverse Effect on the Trust; the Trust is not a party to or
otherwise bound by any agreement other than those described in
the Prospectus; the Trust is and will, under current law, be
classified for United States federal income tax purposes as a
grantor trust and not as an association taxable as a corporation.
(xi) The Purchase Contract Agreement has been autho-
rized by the Company and, at the Closing Time, when validly
executed and delivered by the Company and assuming due authoriza-
tion, execution and delivery of the Purchase Contract Agreement
by the Purchase Contract Agent, will constitute a legal, valid
and binding obligation of the Company, enforceable against the
Company in accordance with its terms except to the extent that
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or
affecting creditors' rights generally, or by general equitable
principles (whether considered in a proceeding in equity or at
law) (the "Bankruptcy Exceptions"), and will conform in all
material respects to the description thereof contained in the
Prospectus.
(xii) The Pledge Agreement has been authorized by the
Company and, at the Closing Time, when validly executed and
delivered by the Company and assuming due authorization, execu-
tion and delivery of the Pledge Agreement by the Collateral Agent
and the Purchase Contract Agent, will constitute a legal, valid
and binding obligation of the Company, enforceable against the
Company in accordance with its terms except to the extent that
enforcement thereof may be limited by the Bankruptcy Exceptions,
and will conform in all material respects to the description
thereof contained in the Prospectus.
(xiii) The Common Securities have been authorized by
the Declaration and, when issued and delivered by the Trust to
the Company against payment therefor as described in the Regis-
tration Statement and Prospectus, will be validly issued, will
represent undivided beneficial interests in the assets of the
Trust and will conform in all material respects to the descrip-
tion thereof contained in the Prospectus; the issuance of the
Common Securities is not subject to preemptive or other similar
rights; and at the Closing Time all of the issued and outstanding
Common Securities of the Trust will be directly owned by the
Company free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equitable right.
(xiv) The Declaration has been authorized by the
Company and, at the Closing Time, will have been executed and
delivered by the Company and the Trustees, and assuming due
authorization, execution and delivery of the Declaration by the
Institutional Trustee and the Delaware Trustee, the Declaration
will, at the Closing Time, be a legal, valid and binding obliga-
tion of the Company and the Regular Trustees, enforceable against
the Company and the Regular Trustees in accordance with its
terms, except to the extent that enforcement thereof may be
limited by the Bankruptcy Exceptions, and will conform in all
material respects to the description thereof contained in the
Prospectus; and at the Closing Time, the Declaration will have
been duly qualified under the 1939 Act.
(xv) The Guarantee Agreement has been authorized by
the Company and, when validly executed and delivered by the
Company, and, assuming due authorization, execution and delivery
by the Guarantee Trustee, will constitute a legal, valid and
binding obligation of the Company, enforceable against the
Company in accordance with its terms except to the extent that
enforcement thereof may be limited by the Bankruptcy Exceptions,
and the Guarantee and the Guarantee Agreement will conform in all
material respects to the description thereof contained in the
Prospectus; and at the Closing Time, the Guarantee Agreement will
have been duly qualified under the 1939 Act.
(xvi) The Securities have been authorized for issuance
and sale to the Underwriter and, when issued and delivered
against payment therefor as provided herein, will be validly
issued and fully paid and non-assessable and will conform in all
material respects to the description thereof contained in the
Prospectus; the issuance of the Securities is not subject to
preemptive or other similar rights.
(xvii) The Shares, when issued and delivered in accor
dance with the provisions of the Purchase Contract Agreement and
the Pledge Agreement, will be authorized, validly issued and
fully paid and non-assessable and will conform in all material
respects to the description thereof contained in the Prospectus;
and the issuance of such Shares will not be subject to preemptive
or other similar rights.
(xviii) The Indenture has been authorized by the
Company and qualified under the 1939 Act and, at the Closing
Time, will have been executed and delivered and will constitute a
legal, valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms except to the
extent that enforcement thereof may be limited by the Bankruptcy
Exceptions; the Indenture will conform in all material respects
to the description thereof contained in the Prospectus.
(xix) The Debentures have been authorized by the
Company and, at the Closing Time, will have been executed by the
Company and, when authenticated in the manner provided for in the
Indenture and delivered against payment therefor as described in
the Prospectus, will constitute legal, valid and binding obliga-
tions of the Company, enforceable against the Company in accor
dance with their terms except to the extent that enforcement
thereof may be limited by the Bankruptcy Exceptions, and will be
in the form contemplated by, and entitled to the benefits of, the
Indenture and will conform in all material respects to the
description thereof contained in the Prospectus.
(xx) Each of the Regular Trustees of the Trust is an
employee of the Company and has been authorized by the Company to
execute and deliver the Declaration.
(xxi) Neither the Company nor any of its subsidiaries
is in violation of its articles of incorporation or by-laws. The
Trust is not in violation of the Declaration or its certificate
of trust filed with the State of Delaware on August 18, 1997 (the
"Certificate of Trust"); none of the Company, any of its subsid
iaries or the Trust is in default in the performance or obser-
vance of any obligation, agreement, covenant or condition con-
tained in any contract, indenture, mortgage, note, lease, loan or
credit agreement or any other agreement or instrument to which
the Company, any of its subsidiaries or the Trust is a party or
by which any of them may be bound, or to which any of the proper-
ty or assets of the Company, any subsidiary or the Trust is sub-
ject, or in violation of any applicable law, rule or regulation
or any judgment, order or decree of any government, governmental
instrumentality or court, domestic or foreign, having jurisdic-
tion over the Company or any of its subsidiaries or any of their
respective properties or assets, which violation or default
would, singly or in the aggregate, have a Material Adverse
Effect.
(xxii) The entry into the Purchase Contracts underly-
ing the Securities by the Company, the offer of the Securities as
contemplated herein and in the Prospectus, the issue of the
Shares and the sale of the Shares by the Company pursuant to the
Purchase Contracts, the execution, delivery and performance of
this Agreement, the Pricing Agreement, the Remarketing Agreement,
the Purchase Contracts, the Purchase Contract Agreement, the
Pledge Agreement, the Declaration, the Capital Securities, the
Common Securities, the Indenture, the Debentures, the Guarantee
Agreement and the Guarantees, and the consummation of the transac-
tions contemplated herein, therein and the Registration Statement
(including the issuance and sale of the Securities and the use of
proceeds from the sale of the Securities as described in the
prospectus under the caption "Use of Proceeds") and compliance by
the Offerors with their obligations hereunder and thereunder have
been authorized by all necessary action (corporate or otherwise)
and do not and will not, whether with or without the giving of
notice or passage of time or both, conflict with or constitute a
breach of any of the terms or provisions of, or constitute a
default or Repayment Event (as defined below) under, or result in
the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company, any subsidiary or the
Trust pursuant to any contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, lease or any other
agreement or instrument to which the Company, the Trust or any
subsidiary is a party or by which any of them may be bound, or to
which any of the Property of any of them is subject (the
"Agreements and Instruments") (except for such conflicts,
breaches or defaults or liens, charges or encumbrances that would
not result in a Material Adverse Effect), nor will such action
result in any violation of the provisions of the charter or
by-laws of the Company or any subsidiary or the Declaration or
Certificate of Trust or any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having
jurisdiction over the Company, any subsidiary or the Trust or any
of their assets, properties or operations. As used herein, a
"Repayment Event" means any event or condition which gives the
holder of any note, debenture or other evidence of indebtedness
(or any person acting on such holder's behalf) the right to
require the repurchase, redemption or repayment of all or a
portion of such indebtedness by the Company, any subsidiary or
the Trust.
(xxiii) There is no action, suit, proceeding, inquiry
or investigation before or by any court or governmental agency or
body, domestic or foreign, now pending or to the knowledge of the
Company threatened against or affecting the Trust, the Company or
any of its subsidiaries which is required to be disclosed in the
Registration Statement and the Prospectus (other than as stated
therein), or which might reasonably be expected to result in a
Material Adverse Effect, or which might be reasonably expected to
have a Material Adverse Effect on the assets, properties or opera-
tions thereof or the consummation of this Agreement, the Pricing
Agreement, the Remarketing Agreement, the Purchase Contracts, the
Purchase Contract Agreement, the Pledge Agreement, the Guarantee
Agreement, the Indenture or the transactions contemplated herein
or therein.
(xxiv) The Company and its subsidiaries have good and
marketable title to all material real and personal property owned
by them, in each case free and clear of all liens, encumbrances
and defects except such as are described in the Registration
Statement or the Prospectus or such as do not materially affect
the value of such property and do not materially interfere with
the use made and proposed to be made of such property by the
Company and its subsidiaries; and any material real property and
buildings held under lease by the Company and its subsidiaries
are held by them under valid, subsisting and enforceable leases
with such exceptions as are not material and do not materially
interfere with the use made and proposed to be made of such
property and buildings by the Company and its subsidiaries; the
Company and its subsidiaries possess all licenses, franchises,
permits, certificates, authorizations, approvals, consents and
orders of all governmental authorities or agencies which are
necessary for the ownership or lease of the material properties
owned or leased by each of them and for the operation of the
business now operated by each of them with such exceptions which,
singly or in the aggregate, are not material and do not material-
ly interfere with the conduct of the business of the Company and
its subsidiaries, considered as one enterprise; all such licens-
es, franchises, permits, certificates, orders, authorizations,
approvals and consents are in full force and effect and contain
no unduly burdensome provisions that would interfere with the
conduct of the business of the Company and its subsidiaries,
considered as one enterprise and, except as otherwise set forth
in the Registration Statement or the Prospectus, there are no
legal or governmental proceedings pending or threatened that
would result in a material modification, suspension or revocation
thereof.
(xxv) No authorization, approval, consent, order,
registration or qualification of or with any court or governmen-
tal authority or agency is required for the entry into the Pur
chase Contracts underlying the Securities, in connection with the
issuance and sale of the Common Securities, the offering of the
Securities and the issuance and sale of the Shares by the Company
pursuant to such Purchase Contracts, except such as have been
obtained and made under the federal securities laws and such as
may be required under state or foreign securities or Blue Sky
laws.
(xxvi) This Agreement, the Remarketing Agreement and
the Pricing Agreement have been authorized, executed and deliv-
ered by each of the Offerors.
(xxvii) None of the Trust nor the Company or any of
its subsidiaries is, and upon the issuance and sale of the Securi-
ties as herein contemplated and the application of the net
proceeds therefrom as described in the Prospectus will not be, an
"investment company" or an entity "controlled" by an "investment
company" as such terms are defined in the Investment Company Act
of 1940, as amended (the "1940 Act").
(xxviii) None of the Company, its subsidiaries or any
of their respective directors, officers or controlling persons,
has taken, directly or indirectly, any action resulting in a
violation of Regulation M under the 1934 Act, or designed to
cause or result in, or that has constituted or that reasonably
might be expected to constitute, the stabilization or manipula-
tion of the price of any security of the Company to facilitate
the sale or resale of the Securities or the Common Stock.
(xxix) No "forward looking statement" (as defined in
Rule 175 under the 1933 Act) contained in the Registration
Statement, any preliminary prospectus or the Prospectus was made
or reaffirmed without a reasonable basis or was disclosed other
than in good faith.
(b) Any certificate signed by any officer of the
Company or a Trustee of the Trust and delivered to the Underwrit-
er or to counsel for the Underwriter shall be deemed a repre-
sentation and warranty by the Company or the Trust, as the case
may be, to the Underwriter as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriter; Closing.
(a) On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein
set forth, the Offerors agree to sell to the Underwriter, and the
Underwriter agrees to purchase from the Offerors, at the price
per security set forth in the Pricing Agreement, 14,000,000
Initial Securities.
(1) If the Offerors have elected not to rely upon Rule
430A of the 1933 Act Regulations, the initial public offering
price per Security and the purchase price per Security to be paid
by the Underwriter for the Securities have each been determined
and set forth in the Pricing Agreement, dated the date hereof,
and any necessary amendments to the Registration Statement and
the Prospectus will be filed before the Registration Statement
becomes effective.
(2) If the Offerors have elected to rely upon Rule
430A of the 1933 Act Regulations, the purchase price per Security
to be paid by the Underwriter shall be an amount equal to the
initial public offering price per Security, less an amount per
Security to be determined by agreement between the Underwriter
and the Offerors. The initial public offering price per Security
shall be a fixed price to be determined by agreement between the
Underwriter and the Offerors. The initial public offering price
and the purchase price, when so determined, shall be set forth in
the Pricing Agreement. In the event that such prices have not
been agreed upon and the Pricing Agreement has not been executed
and delivered by all parties thereto by the close of business on
the fourth business day following the date of this Agreement,
this Agreement shall terminate forthwith, without liability of
any party to any other party, unless otherwise agreed to by the
Offerors and the Underwriter.
(b) In addition, on the basis of the representations and
warranties herein contained and subject to the terms and condi-
tions herein set forth, the Offerors hereby grant to the Under
writer the right to purchase at its election up to 1,890,000
Income PRIDES, 210,000 Growth PRIDES and 210,000 Capital Securi-
ties at the price per share set forth in the Pricing Agreement;
provided, that, pursuant to such options, the Underwriter shall
purchase, proportionately, at least as many Capital Securities as
Growth PRIDES and shall purchase proportionately, at least as
many Growth PRIDES as Income PRIDES. The option hereby granted
will expire automatically at the close of business on the 30th
calendar day after (i) the later of the date the Registration
Statement and any Rule 462(b) Registration Statement becomes
effective, if the Offerors have elected not to rely upon
Rule 430A under the 1933 Act Regulations, or (ii) the Representa-
tion Date, if the Offerors have elected to rely upon Rule 430A
under the 1933 Act Regulations, and may be exercised in whole or
in part from time to time only for the purpose of covering over-
allotments which may be made in connection with the offering and
distribution of the Initial Securities upon notice by the Under
writer to the Offerors setting forth the aggregate number of
additional Optional Securities to be purchased and the time and
date of delivery for the related Option Securities. Any such
time and date of delivery (a "Date of Delivery") shall be deter
mined by the Underwriter but shall not be later than seven full
business days after the exercise of such option, nor in any event
before the Closing Time, unless otherwise agreed upon by the
Underwriter and the Offerors.
(c) The Capital Securities and Treasury Securities underly-
ing the Securities will be pledged with the Collateral Agent to
secure the holders' obligations to purchase Common Stock under
the Purchase Contracts. Such pledge shall be effected by the
transfer to the Collateral Agent of the Capital Securities and
Treasury Securities to be pledged at the Closing Time and appro-
priate Date of Delivery, if any, in accordance with the Pledge
Agreement.
(d) Delivery of certificates for the Initial Securities and
the Option Securities (if the option provided for in Section 2(b)
hereof shall have been exercised on or before the first business
day prior to the Closing Time) shall be made at the offices of
the Underwriter in New York, against the delivery to the Collat-
eral Agent of the Capital Securities and Treasury Securities
relating to such Securities by such Underwriter or on its behalf,
and payment of the purchase price for such Securities shall be
made at the offices of Skadden, Arps, Slate, Meagher & Flom LLP,
919 Third Avenue, New York, New York 10022 or at such other place
as shall be agreed upon by the Underwriter and the Offerors, at
9:00 a.m. (New York time) on the third business day after the
date the Registration Statement becomes effective (or, if the
Offerors have elected to rely upon Rule 430A, the third full
business day after execution of the Pricing Agreement (or, if
pricing of the Securities occurs after 4:30 p.m., Eastern time,
on the fourth full business day thereafter)), or such other time
not later than ten business days after such date as shall be
agreed upon by the Underwriter and the Offerors (such time and
date of payment and delivery being referred to herein as the
"Closing Time"). Payment for the Securities purchased by the
Underwriter shall be made by wire transfer of immediately avail-
able funds, payable to the Company, against delivery to the
account of the Underwriter of the Securities to be purchased by
it. Delivery of, and payment for, the Securities shall be made
through the facilities of The Depository Trust Company. In
addition, if the Underwriter purchase any or all of the Option
Securities, payment of the purchase price and delivery of certif-
icates for such Option Securities shall be made at the offices of
Skadden, Arps, Slate, Meagher & Flom LLP set forth above, or at
such other place as shall be agreed upon by the Underwriter and
the Offerors, on each Date of Delivery as specified in the
relevant notice from the Underwriter to the Offerors.
Certificates for the Initial Securities and the Option
Securities, if any, shall be in such denominations and registered
in such names as the Underwriter may request in writing at least
two full business days before the Closing Time or any Date of
Delivery, as the case may be. The certificates for the Initial
Securities and the Option Securities, if any, will be made
available for examination by the Underwriter no later than
10:00 a.m. (New York City time) on the last business day prior to
the Closing Time or the Date of Delivery, as the case may be.
(e) If settlement for the Option Securities occurs after
the Closing Time, the Offerors will deliver to the Underwriter on
the relevant Date of Delivery, and the obligations of the Under
writer to purchase the Option Securities shall be conditioned
upon the receipt of, supplemental opinions, certificates and
letters confirming as of such date the opinions, certificates and
letters delivered at the Closing Time pursuant to Section 5(k)
hereof.
SECTION 3. Covenants of the Offerors. The Offerors agree
with the Underwriter as follows:
(a) Promptly following the execution of this Agreement, the
Offerors will cause the Prospectus to be filed with the Commis-
sion pursuant to Rule 424 of the 1933 Act Regulations and the
Offerors will promptly advise the Underwriter when such filing
has been made. Prior to the filing, the Offerors will cooperate
with the Underwriter in the preparation of such Prospectus to
assure that the Underwriter has no reasonable objection to the
form or content thereof when filed or mailed.
(b) The Offerors will comply with the requirements of Rule
430A of the 1933 Act Regulations and/or Rule 434 of the 1933 Act
Regulations if and as applicable, and will notify the Underwriter
immediately, and confirm the notice in writing, (i) of the
effectiveness of any post-effective amendment to the Registration
Statement or the filing of any supplement or amendment to the
Prospectus, (ii) the receipt of any comments from the Commission,
(iii) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the
Prospectus or for additional information, (iv) of the issuance by
the Commission of any stop order suspending the effectiveness of
the Registration Statement or the initiation of any proceedings
for that purpose and (v) of the issuance by any state securities
commission or other regulatory authority of any order suspending
the qualification or the exemption from qualification of the
Securities or the Shares under state securities or Blue Sky laws
or the initiation or threatening of any proceeding for such
purpose. The Offerors will make every reasonable effort to
prevent the issuance of any stop order and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible
moment.
(c) The Offerors will give the Underwriter notice of their
intention to file or prepare any amendment to the Registration
Statement (including any post-effective amendment and any filing
under Rule 462(b) of the 1933 Act Regulations), any Term Sheet or
any amendment, supplement or revision to either the prospectus
included in the Registration Statement at the time it became
effective or to the Prospectus, whether pursuant to the 1933 Act,
the 1934 Act or otherwise; will furnish the Underwriter with
copies of any such Rule 462(b) Registration Statement, Term
Sheet, amendment, supplement or revision a reasonable amount of
time prior to such proposed filing or use, as the case may be;
and will not file any such Rule 462(b) Registration Statement,
Term Sheet, amendment, supplement or revision to which the
Underwriter or counsel for the Underwriter shall object.
(d) The Company will deliver to the Underwriter and counsel
for the Underwriter, without charge, signed copies of the Regis-
tration Statement as originally filed and of each amendment
thereto (including exhibits filed therewith or incorporated by
reference therein and documents incorporated or deemed to be
incorporated by reference therein) and signed copies of all
consents and certificates of experts, and will also deliver to
the Underwriter, without charge, a conformed copy of the Registra-
tion Statement as originally filed and of each amendment thereto
(without exhibits). If applicable, the copies of the Registra-
tion Statement and each amendment thereto furnished to the
Underwriter will be identical to the electronically transmitted
copies thereof filed with the Commission pursuant to EDGAR,
except to the extent permitted by Regulation S-T.
(e) The Company has delivered to the Underwriter, without
charge, as many copies of each preliminary prospectus as the
Underwriter reasonably requested, and the Company hereby consents
to the use of such copies for purposes permitted by the 1933 Act.
The Company will furnish to the Underwriter, without charge,
during the period when the Prospectus is required to be delivered
under the 1933 Act or the 1934 Act, such number of copies of the
Prospectus (as amended or supplemented) as the Underwriter may
reasonably request. If applicable, the Prospectus and any
amendments or supplements thereto furnished to the Underwriter
will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to EDGAR, except to
the extent permitted by Regulation S-T.
(f) The Offerors will comply with the 1933 Act and the 1933
Act Regulations and the 1934 Act and the 1934 Act Regulations so
as to permit the completion of the distribution of the Securities
as contemplated in this Agreement and in the Registration State-
ment and the Prospectus. If at any time when the Prospectus is
required by the 1933 Act or the 1934 Act to be delivered in
connection with sales of the Securities, any event shall occur or
condition shall exist as a result of which it is necessary, in
the opinion of counsel for the Underwriter or for the Offerors,
to amend the Registration Statement in order that the Registra-
tion Statement will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not mislead-
ing or to amend or supplement the Prospectus in order that the
Prospectus will not include an untrue statement of a material
fact or omit to state a material fact necessary in order to make
the statements therein not misleading in the light of the circum-
stances existing at the time it is delivered to a purchaser, or
if it shall be necessary, in the opinion of such counsel, at any
such time to amend the Registration Statement or amend or supple-
ment the Prospectus in order to comply with the requirements of
the 1933 Act or the 1933 Act Regulations, the Offerors will
promptly prepare and file with the Commission, subject to Section
3(c), such amendment or supplement as may be necessary to correct
such statement or omission or to make the Registration Statement
or the Prospectus comply with such requirements, and the Offerors
will furnish to the Underwriter, without charge, such number of
copies of such amendment or supplement as the Underwriter may
reasonably request.
(g) The Offerors will use their best efforts, in coopera-
tion with the Underwriter, to qualify the Securities for offering
and sale under the applicable securities laws of such states and
other jurisdictions (domestic or foreign) as the Underwriter may
designate; provided, however, that the Company shall not be
obligated to qualify as a foreign corporation in any jurisdiction
in which it is not so qualified or 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 Securi
ties have been so qualified, the Offerors will file such state-
ments and reports as may be required by the laws of such juris-
diction to continue such qualification in effect for so long as
may be required in connection with distribution of the Securities
and the Shares.
(h) The Company will make generally available to its
securityholders as soon as practicable, but not later than 45
days (or 90 days, in the case of a period that is also the
Company's fiscal year) after the close of the period covered
thereby, an earnings statement of the Company and its subsidiar-
ies (in form complying with the provisions of Rule 158 of the
1933 Act Regulations).
(i) The Company will use the net proceeds received by it
from the sale of the Securities in the manner specified in the
Prospectus under "Use of Proceeds".
(j) If, at the time that the Registration Statement became
(or in the case of a post-effective amendment becomes) effective,
any information shall have been omitted therefrom in reliance
upon Rule 430A or Rule 434 of the 1933 Act Regulations, then
immediately following the execution of the Pricing Agreement, the
Offerors will prepare, and file or transmit for filing with the
Commission in accordance with such Rule 430A or Rule 434 and Rule
424(b) of the 1933 Act Regulations, copies of an amended Prospec
tus, or Term Sheet, or, if required by such Rule 430A, a
post-effective amendment to the Registration Statement (including
an amended Prospectus), containing all information so omitted.
(k) If the Offerors elect to rely upon Rule 462(b), the
Offerors shall file a Rule 462(b) Registration Statement with the
Commission in compliance with Rule 462(b) and pay the applicable
fees in accordance with Rule 111 of the 1933 Act Regulations by
the earlier of (i) 10:00 p.m. Eastern time on the date of the
Pricing Agreement and (ii) the time confirmations are sent or
given, as specified by Rule 462(b)(2).
(l) The Offerors, during the period when the Prospectus is
required to be delivered under the 1933 Act, will file all
documents required to be filed with the Commission pursuant to
Section 13, 14 or 15 of the 1934 Act within the time periods
required by the 1934 Act and the 1934 Act Regulations.
(m) The Offerors will use their best efforts to effect the
listing of the Income PRIDES and the Growth PRIDES on the New
York Stock Exchange and to cause the Securities to be registered
under the 1934 Act.
(n) During a period of 90 days from the date of the Pricing
Agreement, neither the Trust nor the Company will, without the
prior written consent of the Underwriter, directly or indirectly,
sell, offer to sell, grant any option for the sale of, or other-
wise dispose of, or enter into any agreement to sell, any Income
PRIDES, Growth PRIDES, Purchase Contracts, Capital Securities or
Common Stock, as the case may be, or any securities of the
Company similar to the Income PRIDES, Growth PRIDES, Purchase
Contracts, Capital Securities or Common Stock or any security
convertible into or exchangeable or exercisable for Income
PRIDES, Growth PRIDES, Purchase Contracts, Capital Securities or
Common Stock other than shares of Common Stock or options for
shares of Common Stock issued pursuant to or sold in connection
with any employee benefit, dividend reinvestment and stock option
and stock purchase plans of the Company and its subsidiaries and
other than the Growth PRIDES or Income PRIDES to be created or
recreated upon substitution of Pledged Securities, or shares of
Common Stock issuable upon early settlement of the Income PRIDES
or Growth PRIDES or upon exercise of stock options, or (B) enter
into any swap or any other agreement or any transaction that
transfers, in whole or in part, directly or indirectly, the
economic consequence of ownership of the Securities, any security
convertible into or exchangeable into or exercisable for the
Securities substantially similar to equity securities substantial-
ly similar to the Securities, whether any such swap or
transaction is to be settled by delivery of Securities, or other
securities, in cash or otherwise.
(o) For a period of three years from the Closing Time, the
Company will furnish to the Underwriter copies of all annual
reports, quarterly reports and current reports filed with the
Commission on Forms 10-K, 10-Q and 8-K, or such similar forms as
may be designated by the Commission, and such other documents,
reports and information as shall be furnished by the Company to
its stockholders or securityholders generally, provided, however,
that the Company shall not be required to provide the Underwriter
with any such reports or similar forms that have been filed with
the Commission by electronic transmission pursuant to EDGAR.
(p) The Company will reserve and keep available at all
times, free of preemptive or other similar rights and liens and
adverse claims, sufficient shares of Common Stock to satisfy any
obligations to issue Shares upon settlement of the Purchase
Contracts and shall take all actions necessary to keep effective
the Registration Statement with respect to the Shares.
(q) None of the Company, its subsidiaries or any of their
respective directors, officers or controlling persons, will take,
directly or indirectly, any action resulting in a violation of
Regulation M under the 1934 Act, or designed to cause or result
in, or that reasonably might 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 or the
Common Stock.
SECTION 4. Payment of Expenses. The Company will pay all
expenses incident to the performance of its obligations under
this Agreement, the Pricing Agreement, the Purchase Contracts,
the Purchase Contract Agreement and the Pledge Agreement, includ-
ing, without limitation, expenses related to the following, if
incurred: (i) the preparation, delivery, printing and filing of
the Registration Statement and Prospectus as originally filed
(including financial statements and exhibits) and of each amend-
ment thereto; (ii) the preparation, issuance and delivery of the
certificates for the Securities and the Shares; (iii) the fees
and disbursements of the Company's counsel, accountants and other
advisors or agents (including the transfer agents and regis
trars), as well as fees and disbursements of the Trustees, the
Purchase Contract Agent, the Collateral Agent and any Depositary,
and their respective counsel (except as provided for in the
Prospectus); (iv) the qualification of the Securities and the
Shares under securities laws in accordance with the provisions of
Section 3(g), including filing fees and the fees and disburse
ments of counsel for the Underwriter in connection therewith and
in connection with the preparation of the Blue Sky Survey; (v)
the printing and delivery to the Underwriter of copies of the
Registration Statement as originally filed and of each amendment
thereto, of each preliminary prospectus, any Term Sheet and of
the Prospectus and any amendments or supplements thereto;
(vi) any fees payable in connection with the rating of the
Securities by nationally recognized statistical rating organiza-
tions; and (vii) any fees payable or expenses incurred pursuant
to any Uniform Commercial Code related filings; and (viii) the
fees and expenses incurred in connection with the listing of the
Income PRIDES, the Growth PRIDES and the Shares on the New York
Stock Exchange.
If this Agreement is terminated by the Underwriter in
accordance with the provisions of Section 5 or Section 9(a)(i)
hereof with respect to the Initial Securities or the Option
Securities, as the case may be, the Company shall reimburse the
Underwriter for all of its reasonable out-of-pocket expenses
incurred in connection with the Initial Securities or Option
Securities, as the case may be, including the fees and disburse-
ments of Skadden, Arps, Slate, Meagher & Flom LLP, counsel for
the Underwriter.
SECTION 5. Conditions of Underwriter's Obligations. The
obligations of the Underwriter to purchase and pay for the
Securities pursuant to this Agreement are subject to the accuracy
of the representations and warranties of the Offerors herein
contained or in certificates of any officer of the Company or any
subsidiary or the trustees of the Trust delivered pursuant to the
provisions hereof, to the performance by the Offerors of their
obligations hereunder, and to the following further conditions:
(a) The Registration Statement, including any Rule 462(b)
Registration Statement, shall have become effective under the
1933 Act not later than 5:30 p.m., New York City time, on the
date hereof, and on the date hereof and at the Closing Time and
any Date of Delivery, no stop order suspending the effectiveness
of the Registration Statement or any part thereof shall have been
issued under the 1933 Act or proceedings therefor initiated or
threatened by the Commission, and any request on the part of the
Commission for additional information shall have been complied
with to the satisfaction of counsel to the Underwriter. A
prospectus containing information relating to the description of
the Securities, the specific method of distribution and similar
matters shall have been filed with the Commission in accordance
with Rule 424(b)(1), (2), (3), (4) or (5), as applicable (or any
required post-effective amendment providing such information
shall have been filed and declared effective in accordance with
the requirements of Rule 430A), or, if the Company has elected to
rely upon Rule 434 of the 1933 Act Regulations, a Term Sheet in-
cluding the Rule 434 Information shall have been filed with the
Commission in accordance with Rule 424(b)(7).
(b) At the Closing Time the Underwriter shall have re
ceived:
(1) The favorable opinion, dated as of the Closing
Time, of Patricia Nachtigal, Esq., Vice President and General
Counsel of the Company, in form and substance reasonably satisfac-
tory to counsel for the Underwriter, to the effect that:
(i) The Company has been incorporated, is valid-
ly existing as a corporation and is in good standing under
the laws of the State of New Jersey.
(ii) The Company has corporate power and author
ity to own, lease and operate its properties and to conduct
its business as described in the Prospectus.
(iii) The Company is qualified as a foreign
corporation to transact business and is in good standing in
each jurisdiction in which such qualification is required,
except where such failure to qualify or be in good standing
would not have a Material Adverse Effect.
(iv) The authorized, issued and outstanding
capital stock of the Company is as set forth in the Prospec-
tus (except for subsequent issuances, if any, pursuant to
incentive compensation plan, employee benefit plan or divi-
dend reinvestment and stock purchase plan transactions), and
the shares of issued and outstanding capital stock of the
Company have been authorized and validly issued and are
fully paid and non-assessable.
(v) Except for the Trust, each Significant
Subsidiary of the Company has been incorporated and is
validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation; to such
counsel's knowledge, each subsidiary of the Company has the
corporate power and authority to own, lease and operate its
properties and to conduct its business as presently con
ducted and as described in the Prospectus, and is 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 fail-
ure to so qualify or be in good standing would not have a
Material Adverse Effect; and to such Counsel's knowledge all
of the issued and outstanding capital stock of each subsid-
iary of the Company has been authorized and validly issued,
is fully paid and non-assessable and all shares owned by the
Company, directly or through its subsidiaries, are owned
free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity.
(vi) The Declaration has been authorized, exe
cuted and delivered by the Company and the Trustees and is a
legal, valid and binding obligation of the Company, enforce-
able against the Company and each of the Regular Trustees in
accordance with its terms, except as enforcement thereof may
be limited by the Bankruptcy Exceptions; and the Declaration
has been duly qualified under the 1939 Act.
(vii) All legally required proceedings in connec-
tion with the authorization, issuance and validity of the
Securities and the sale of the Securities in accordance with
this Agreement have been taken and all legally required
orders, consents or other authorizations or approvals of any
other public boards or bodies in connection with the autho-
rization, issuance and validity of the Securities and the
sale of the Securities in accordance with this Agreement
(other than in connection with or in compliance with the
provisions of the securities or Blue Sky laws of any juris
dictions, as to which no opinion need be expressed) have
been obtained and are in full force and effect.
(viii) The Registration Statement is effective
under the 1933 Act and, to the best knowledge of such coun-
sel, no stop order suspending the effectiveness of the
Registration Statement has been issued under the 1933 Act,
and no proceedings therefor have been initiated or threat
ened by the Commission.
(ix) Each of the documents incorporated by
reference in the Registration Statement or the Prospectus at
the time they were filed or last amended (other than the
financial statements and the notes thereto, the financial
schedules, and any other financial data included or incorpo
rated by reference therein, as to which such counsel need
express no belief), complied as to form in all material
respects with the requirements of the 1934 Act and the 1934
Act Regulations, as applicable; and such counsel has no
reason to believe that any of such documents, when such
documents became effective or were so filed, as the case may
be, contained, in the case of a registration statement which
became effective under the 1933 Act, an untrue statement of
a material fact, or omitted to state a material fact re-
quired to be stated therein or necessary to make the state-
ments therein not misleading, and, in the case of other
documents which were filed under the 1934 Act with the
Commission, an untrue statement of a material fact or omit-
ted to state a material fact necessary in order to make the
statements therein not misleading.
(x) The Company and the Trust meet the regis-
trant requirements for use of Form S-3 under the 1933 Act
Regulations.
(xi) The Income PRIDES and Growth PRIDES have
been duly authorized, executed and delivered by the Company,
and (assuming due execution by the Purchase Contract Agent
as attorney-in-fact of the holders thereof and due authenti-
cation by the Purchase Contract Agent) and upon payment
therefore as set forth herein, will be duly and validly
issued and outstanding, and will constitute valid and bind-
ing obligations of the Company entitled to the benefits of
the Purchase Contract Agreement and enforceable against the
Company in accordance with its terms, except to the extent
that enforcement thereof may be limited by the Bankruptcy
Exceptions. The Shares and the Securities are each regis
tered under the 1934 Act, and the Income PRIDES issuable at
the Closing Time and the Shares issuable by the Company
pursuant to the Purchase Contracts have been authorized for
listing on the New York Stock Exchange, upon official notice
of issuance.
(xii) The Shares subject to the Purchase Contract
Agreement have been validly authorized and reserved for
issuance and, when issued and delivered by the Company in
accordance with the provisions of the Purchase Contract
Agreement, the Purchase Contracts and the Pledge Agreement,
will be fully paid and non-assessable; the issuance of such
Shares will not be subject to preemptive or other similar
rights arising by law or, to the best of such counsel's
knowledge, otherwise.
(xiii) The issuance of the Securities is not
subject to preemptive or other similar rights arising by law
or, to the best of such counsel's knowledge, otherwise.
(xiv) All of the issued and outstanding Common
Securities of the Trust are directly owned by the Company
free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equitable right.
(xv) This Agreement, the Remarketing Agreement
and the Pricing Agreement have been duly authorized, exe
cuted and delivered by each of the Company and the Trust.
(xvi) The Purchase Contract Agreement has been
duly authorized, executed and delivered by the Company and,
assuming due authorization, execution and delivery by the
Purchase Contract Agent, constitutes a valid and binding
agreement of the Company, enforceable against the Company in
accordance with its terms except to the extent that enforce-
ment thereof may be limited by the Bankruptcy Exceptions.
(xvii) The Pledge Agreement has been duly autho-
rized, executed and delivered by the Company and, assuming
due authorization, execution and delivery by the Collateral
Agent and the Purchase Contract Agent, constitutes a legal,
valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms except to
the extent that enforcement thereof may be limited by the
Bankruptcy Exceptions.
(xviii) The Guarantee Agreement has been duly
authorized, executed and delivered by the Company; the
Guarantee Agreement, assuming it is duly authorized, exe-
cuted, and delivered by the Guarantee Trustee, constitutes a
valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms, except to
the extent that enforcement thereof may be limited by Bank-
ruptcy Exceptions.
(xix) The Indenture has been executed and deliv-
ered by the Company and, assuming authorization, execution,
and delivery thereof by the Debt Trustee, is a valid and
binding agreement of the Company, enforceable against the
Company in accordance with its terms, except to the extent
that enforcement thereof may be limited by the Bankruptcy
Exceptions.
(xx) The Debentures are in the form contemplated
by the Indenture, have been duly authorized, executed and
delivered by the Company and, when authenticated by the Debt
Trustee in the manner provided for in the Indenture and
delivered against payment therefor by the Trust, will con-
stitute valid and binding obligations of the Company, en-
forceable against the Company in accordance with their
terms, except to the extent that enforcement thereof may be
limited by the Bankruptcy Exceptions.
(xxi) The entry into the Purchase Contracts
underlying the Securities by the Company, the offer of the
Securities as contemplated herein and in the Prospectus, the
issuance of the Shares and the sale of the Shares by the
Company pursuant to the Purchase Contracts, the execution,
delivery and performance of this Agreement, the Pricing
Agreement, the Remarketing Agreement, the Purchase Con-
tracts, the Purchase Contract Agreement, the Pledge Agree-
ment, the Declaration, the Capital Securities, the Common
Securities, the Indenture, the Debentures, the Guarantee
Agreement and the Guarantees, and the consummation of the
transactions contemplated herein, therein and the Registra-
tion Statement (including the issuance and sale of the
Securities and the use of proceeds from the sale of the
Securities as described in the prospectus under the caption
"Use of Proceeds") and compliance by the Offerors with their
obligations hereunder and thereunder have been authorized by
all necessary action (corporate or otherwise) and do not and
will not, whether with or without the giving of notice or
passage of time or both, conflict with or constitute a
breach of any of the terms or provisions of, or constitute a
default or Repayment Event (as defined below) under, or
result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company, any
subsidiary or the Trust pursuant to, the Agreements and
Instruments (except for such conflicts, breaches or defaults
or liens, charges or encumbrances that would not result in a
Material Adverse Effect), nor will such action result in any
violation of the provisions of the charter or by-laws of the
Company or any Significant Subsidiary or the Declaration or
Certificate of Trust or any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any govern-
ment, government instrumentality or court, domestic or
foreign, having jurisdiction over the Company, any subsid-
iary or the Trust or any of their assets, properties or
operations. As used herein, a "Repayment Event" means any
event or condition which gives the holder of any note,
debenture or other evidence of indebtedness (or any person
acting on such holder's behalf) the right to require the
repurchase, redemption or repayment of all or a portion of
such indebtedness by the Company, any subsidiary or the
Trust.
(xxii) All conditions precedent provided for in
the Purchase Contract Agreement relating to the authentica-
tion and delivery of the Security Certificates have been
complied with and the Company is duly entitled to the au-
thentication and delivery of the Security Certificates in
accordance with the terms of the Purchase Contract Agree-
ment; the Security Certificates are in a form contemplated
by the Purchase Contract Agreement and comply with all
applicable statutory requirements and with the requirements
of the New York Stock Exchange.
(xxiii) There are no actions, suits or proceed-
ings before or by any court or governmental agency or body,
domestic or foreign, now pending or, to the best of such
counsel's knowledge, threatened, which are required to be
disclosed in the Registration Statement or the Prospectus,
other than those disclosed therein.
(xxiv) The information in the Prospectus under
the caption "Description of the Common Stock," to the extent
that it involves matters of law, summaries of legal matters,
documents or proceedings, or legal conclusions, has been
reviewed by such counsel and is correct in all material re
spects.
(xxv) To the best of such counsel's knowledge and
information, there are no contracts, indentures, mortgages,
agreements, notes, leases or other instruments required to
be described or referred to or incorporated by reference in
the Registration Statement or to be filed as exhibits there
to other than those described or referred to or incorporated
by reference therein or filed as exhibits thereto; the
descriptions thereof or references thereto are true and
correct in all material respects, and no default exists in
the due performance or observance of any material obliga-
tion, agreement, covenant or condition contained in any
contract, indenture, mortgage, agreement, note, lease or
other instrument so described, referred to, filed or incor-
porated by reference which would result in a Material Ad
verse Effect.
(xxvi) No authorization, approval, consent,
order, registration or qualification of or with any court or
federal or state governmental authority or agency is re-
quired for the issuance and sale of the Securities by the
Offerors to the Underwriter or the performance by the Trust
and the Company of their respective obligations in this
Agreement, the Remarketing Agreement, the Pricing Agreement,
the Purchase Contract Agreement, the Purchase Contracts, the
Pledge Agreement, the Indenture, the Debentures, the
Guarantee Agreement, the Declaration and the Securities
except such as has been obtained and made under the federal
securities laws or such as may be required under state or
foreign securities or Blue Sky laws.
(xxvii) The Company and its subsidiaries possess
all licenses, franchises, permits, certificates, authoriza-
tions, approvals, consents and orders of all governmental
authorities or agencies necessary for the ownership or lease
of the material properties owned or leased by each of them
and for the operation of the business carried on by each of
them as described in the Registration Statement and the
Prospectus with such exceptions as are not material and do
not materially interfere with the conduct of the business of
the Company and its subsidiaries, considered as one enter-
prise; all such licenses, franchises, permits, certificates,
authorizations, approvals, consents and orders are in full
force and effect and, except as otherwise set forth in the
Registration Statement or the Prospectus, there are no legal
or governmental proceedings pending or, to such counsel's
knowledge, threatened that would result in a material modi-
fication, suspension or revocation thereof.
Moreover, such counsel shall confirm that nothing has come
to such counsel's attention that would lead such counsel to
believe that the Registration Statement, including any
information provided pursuant to Rule 430A or Rule 434
(except for financial statements and the notes thereto, the
financial schedules and any other financial data included or
incorporated by reference therein, as to which counsel need
express no opinion), at the time it became effective or at
the Representation Date, 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 (except for
financial statements and the notes thereto, the financial
schedules, and any other financial data included or incorpo
rated by reference therein, as to which counsel need express
no opinion), at the Representation Date (unless the term
"Prospectus" refers to a prospectus which has been provided
to the Underwriter by the Company for use in connection with
the offering of the Securities which differs from the Pro-
spectus on file at the Commission at the time the Regis-
tration Statement became effective, in which case at the
time it is first provided to the Underwriter for such use)
or at the Closing Time, included (or includes) 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 the light of the circumstances under which they
were made, not misleading.
In giving such opinion, such counsel may rely, as to
matters of Delaware law, upon the opinion of Richards, Layton &
Finger, P.A., special Delaware counsel to the Offerors, in which
case the opinion shall state that such counsel believes that you
and such counsel are entitled to so rely.
(2) The favorable opinion, dated as of the Closing
Time, of Simpson Thacher & Bartlett, special counsel to the Offer-
ors, in form and substance satisfactory to counsel for the
Underwriter and subject to the qualifications and assumptions
stated therein, to the effect that:
(i) The Registration Statement has become
effective under the 1993 Act and the Prospectus was filed on
March 19, 1998 pursuant to Rule 424(b) of the 1933 Act
Regulations and, to our knowledge, no stop order suspending
the effectiveness of the Registration Statement has been
issued or proceeding for that purpose has been instituted or
threatened by the Commission.
(ii) The Registration Statement, as of its
effective date, and the Prospectus, as of its issue date
complied as to form in all material respects with the re
quirements of the 1933 Act, the Trust Indenture Act of 1939,
as amended (the "Trust Indenture Act"), and the applicable
rules and regulations of the Commission thereunder, except
that in each case we express no opinion with respect to the
financial statements or other financial data contained or
incorporated by reference in the Registration Statement or
the Prospectus.
(iii) The statements made in Prospectus under the
captions "Description of the FELINE PRIDES," "Description of
the Purchase Contracts," "Certain Provisions of the Purchase
Contract Agreement and the Pledge Agreement," "Description
of the Guarantee," "Description of the Debentures," and
"Effect of Obligations Under the Debentures and the Guaran-
tee," insofar as they purport to constitute summaries of the
certain terms of the documents referred to therein, consti-
tute accurate summaries of the terms of such documents in
all material respects.
(iv) The Purchase Contract Agreement and the
Pledge Agreement have been duly authorized, executed and
delivered by the Company and (assuming due execution and
delivery by the Purchase Contract Agent) constitute valid
and binding agreements of the Company enforceable against
the Company in accordance with their respective terms,
subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally,
general equitable principles (whether considered in a pro-
ceeding in equity or at law); provided, however, that upon
the occurrence of a Termination Event, Section 365(e)(1) of
the Bankruptcy Code (11 U.S.C. 101-1330, as amended)
should not invalidate or nulify the provisions of Sections
3.15 and 5.8 of the Purchase Contract Agreement and of
Section 4.3 of the Pledge Agreement that require termination
of the Purchase Contracts and release of the Collateral
Agent's security interest in the Capital Securities, the
Debentures, the Applicable Ownership Interest in the Trea-
sury Portfolio or the Treasury Securities; provided, fur-
ther, that the automatic stay under Section 362 of the
Bankruptcy Code may preclude such termination for a period
of time and the procedures for obtaining relief from such
stay may delay exercise of such termination rights.
(v) The Income PRIDES and the Growth PRIDES have
each been duly authorized, executed and delivered by the
Company and (assuming due execution by the Purchase Contract
Agent as attorney-in-fact of the holders thereof and due
authentication by the Purchase Contract Agent) and upon
payment therefor as set forth in the Underwriting Agreement,
will be duly and validly issued and outstanding, and will
constitute valid and binding obligations of the Company
entitled to the benefits of the Purchase Contract Agreement
and enforceable against the Company in accordance with their
terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganizations, moratorium and other
similar laws relating to or affecting creditors' rights
generally, and general equitable principles (whether
considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
(vi) The provisions of the Pledge Agreement are
effective to create in favor of the Collateral Agent for the
benefit of the Company, a valid and perfected security
interest under the Uniform Commercial Code as in effect on
the date of such opinion in the State of New York in the
Pledged Capital Securities, Pledged Debentures, Applicable
Ownership Interests (as specified in clause (A) of the
definition thereof in the Declaration) of the Treasury
Portfolio and the Pledged Treasury Securities from time to
time credited to the Collateral Account.
(vii) The Guarantee Agreement has been duly
authorized, executed and delivered by the Company and duly
qualified under the Trust Indenture Act and (assuming due
execution and delivery by the Guarantee Trustee) constitutes
a valid and binding agreement of the Company enforceable
against the Company in accordance with its terms, subject to
the effects of bankruptcy, insolvency, fraudulent convey-
ance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, gen-
eral equitable principles (whether considered in a proceed-
ing in equity or at law) and an implied covenant of good
faith and fair dealing.
(viii) The Indenture has been duly authorized,
executed and delivered by the Company and duly qualified
under the Trust Indenture Act, and (assuming due authentica-
tion, execution and delivery by the Debt Trustee) consti-
tutes valid and binding agreement of the Company enforceable
against the Company in accordance with its terms, subject to
the effect of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating
to or affecting creditors' rights generally, and general
equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and
fair dealing.
(ix) The Debentures have been duly authorized,
executed and delivered by the Company and (assuming due
authentication by the Debt Trustee) and upon payment there
for as set forth herein, will constitute valid and binding
obligations of the Company entitled to the benefits of the
Indenture and enforceable in accordance with their terms,
subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally,
general equitable principles (whether considered in a pro-
ceeding in equity or at law) and an implied covenant of good
faith and fair dealing.
(x) The issuance and sale of the Income PRIDES
and Growth PRIDES in accordance with this Agreement do not
contravene the Commodity Exchange Act or the regulations of
the Commodity Futures Trading Commission.
(xi) None of the Trust nor the Company is, and
upon the issuance and sale of the Income PRIDES and Growth
PRIDES as herein contemplated and the application of the net
proceeds therefrom as described in the Prospectus will not
be, an "investment company" or an entity "controlled" by an
"investment company" as such terms are defined within the
meaning of and subject to registration under the Investment
Company Act of 1940, as amended.
(xii) Based upon current law and the assumptions
stated or referred to therein, under current United States
Federal income tax law: (i) the Trust will be classified as
a grantor trust and not as an association taxable as a
corporation; (ii) the Debentures will be classified as
indebtedness of the Company and (iii) the discussion in the
Prospectus unde the caption "Certain Federal Income Tax
Consequences" is a fair and accurate summary of the matters
addressed therein.
Moreover, such counsel shall confirm that based upon
their examination of the Registration Statement and the
Prospectus and their investigations made in connection with
the preparation of the Registration Statement and the Pro-
spectus (excluding any documents incorporated therein) and
their participations in conferences with certain officers
and employees of the Company, with representatives of Price
Waterhouse LLP and counsel to the Company such counsel has
no reason to believe that the Registration Statement, as of
its effective date (including any documents incorporated
therein on file with Commission on such effective date),
contained any untrue statement of a material fact or omitted
to state any material fact required to be stated therein or
necessary in order to make the statements therein not mis
leading or that the Prospectus as of its date or as of the
Date of Delivery (including the documents incorporated
therein by reference) contains any untrue statement of a
material fact or omits to state any material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading,
except that in each case such counsel need express no belief
with respect to the financial statements or other financial
data contained or incorporated by reference in the Registra-
tion Statement, the Prospectus or the documents incorporated
therein.
In giving such opinion, such counsel may rely, as to
matters of New Jersey law, upon the opinion of Patricia
Nachtigal, Esq. Vice President and General Counsel of the Com
pany.
(3) The favorable opinion, dated as of the Closing
Time, of Richards, Layton & Finger, P.A., special Delaware
counsel to the Offerors, in form and substance satisfactory to
counsel for the Underwriter, to the effect that:
(i) The Trust has been created and is validly
existing in good standing as a business trust under the
Delaware Act, and has the trust power and authority to
conduct its business as described in the Prospectus.
(ii) The Declaration constitutes a legal, valid
and binding obligation of the Company and is enforceable
against the Company in accordance with its terms, except
that to the extent enforceability thereof may be limited by
the (i) bankruptcy, insolvency, moratorium, receivership,
reorganization, liquidation, fraudulent conveyance and
transfer, and other similar laws relating to or affecting
the rights and remedies of creditors generally, (ii) princi-
ples of equity, including applicable law relating to fidu-
ciary duties (regardless of whether considered and applied
in a proceeding in equity or at law), and (iii) the effect
of applicable public policy on the enforcement of provisions
related to indemnification.
(iii) Under the Delaware Act and the Declaration,
the Trust has the trust power and authority to (i) execute
and deliver, and to perform its obligations under, this
Agreement and the Pricing Agreement and (ii) issue, and
perform its obligations under, the Trust Securities.
(iv) Under the Delaware Act and the Declaration,
the execution and delivery by the Trust of this Agreement
and the Pricing Agreement, and the performance by the Trust
of its obligations hereunder and under the Pricing Agree-
ment, have been authorized by all necessary trust action on
the part of the Trust.
(v) The Capital Securities have been authorized
by the Declaration and, when executed by the Trust and
authenticated by the Institutional Trustee in accordance
with the Declaration and delivered against payment therefor
in accordance with the terms of this Agreement, will be
validly issued and, subject to qualifications hereinafter
expressed, fully paid and nonassessable undivided beneficial
interests in the assets of the Trust; the Holders of the
Capital Securities, as beneficial owners of the Trust, will
be entitled to the same limitation of personal liability ex
tended to stockholders of private corporations for profit
organized under the General Corporation Law of the State of
Delaware; said counsel may note that the holders of the
Capital Securities may be obligated to make payments as set
forth in the Declaration.
(vi) The Common Securities have been authorized
by the Declaration and, when issued, executed and authenti-
cated in accordance with the terms of the Declaration, and
delivered and paid for as set forth in the Prospectus, will
be validly issued, undivided beneficial interests in the
assets of the Trust.
(vii) Under the Delaware Act and the Declaration,
the issuance of the Trust Securities is not subject to
preemptive or other similar rights.
(viii) None of the execution and delivery by
the Trust of, or the performance by the Trust of its
obligations under, this Agreement, the issuance and sale of
the Capital Securities by the Trust in accordance with the
terms of this Agreement and the Pricing Agreement, or the
consummation by the Trust of the other transactions
contemplated thereby, will contravene any provisions of
applicable Delaware law or Delaware administrative
regulations or the Certificate of Trust or the Declaration.
(ix) No authorization, approval, consent, order,
registration or qualification of or with any Delaware state
governmental authority or Delaware state agency is required
for the entry into the Purchase Contracts underlying the
Securities, the issuance and sale by the Trust of the Capi-
tal Securities to the Underwriter, or the performance by the
Company and the Trust of their respective obligations under
this Agreement, the Pricing Agreement, the Purchase Con-
tracts, the Purchase Contract Agreement, the Pledge Agree-
ment, the Indenture, the Debentures, the Capital Securities
Guarantee Agreement, the Capital Securities Guarantee, the
Declaration and the Trust Securities, except such counsel
need not express any opinion regarding any securities laws.
(4) The favorable opinion, dated as of the Closing
Pepper Hamilton LLP, counsel to First National Bank of Chicago,
as Institutional Trustee under the Declaration, and Guarantee
Trustee under the Guarantee Agreement, and to First Chicago
Delaware Inc., as Delaware Trustee, in form and substance
satisfactory to counsel for the Underwriter, to the effect that:
(i) The Institutional Trustee is a national
banking association with trust powers, duly organized,
validly existing and in good standing under the laws of the
United States with all necessary corporate power and author-
ity to execute, deliver, and to carry out and perform its
obligations under the terms of, the Declaration and the
Guarantee.
(ii) The Delaware Trustee is a Delaware corpora-
tion, duly organized, validly existing and in good standing,
with full corporate power and authority to execute and
deliver, and to carry out and perform its obligations under
the terms of, the Declaration.
(iii) The execution, delivery and performance by
each of the Institutional Trustee and the Delaware Trustee
of the Declaration, and the execution, delivery and perfor-
mance by Guarantee Trustee of the Guarantee, have been duly
authorized by all necessary corporate action on the part of
the Institutional Trustee and the Delaware Trustee, respec-
tively, in the case of the Declaration, and by the Guarantee
Trustee, in the case of the Guarantee. The Declaration and
the Guarantee have been duly executed and delivered by the
Institutional Trustee and the Delaware Trustee, respec-
tively, in the case of the Declaration, and by the Guarantee
Trustee, in the case of the Guarantee, and constitute the
legal, valid and binding obligation of the Institutional
Trustee and the Delaware Trustee, in the case of the Decla-
ration, and of the Guarantee Trustee, in the case of the
Guarantee, enforceable against the Institutional Trustee and
the Delaware Trustee in the case of the Declaration, and
against the Guarantee Trustee, in the case of the Guarantee,
in accordance with their terms. Such opinions may be lim-
ited by (i) public policy considerations; (ii) applicable
bankruptcy, solvency, reorganization, moratorium, fraudulent
conveyance or other laws affecting the enforcement of credi-
tors' rights generally, as well as awards by courts of
relief in lieu of the remedy of specific performance of
contractual provisions; and (iii) general principles of
equity (regardless of whether such enforceability is consid-
ered a proceeding in equity or at law) as a court having
jurisdiction may impose.
(iv) The execution, delivery and performance by
each of the Institutional Trustee and the Delaware Trustee
of the Declaration, and the execution, delivery and perfor-
mance by the Guarantee Trustee of the Guarantee, do not
conflict with, or constitute a breach of, the Institutional
Trustee's, the Delaware Trustee's or the Guarantee Trustee's
respective charter or bylaws.
(5) The favorable opinion, dated as of the Closing
Time, of Emmet, Marvin & Martin, counsel to The Bank of New York,
as Purchase Contract Agent, in form and substance satisfactory to
counsel for the Underwriter, to the effect that:
(i) The Bank of New York, is duly incorporated
and is validly existing as a banking corporation with trust
powers under the laws of the United States with all neces-
sary power and authority to execute, deliver and perform its
obligations under the Purchase Contract Agreement and the
Pledge Agreement.
(ii) The execution, delivery and performance by
the Purchase Contract Agent of the Purchase Contract Agree-
ment and the Pledge Agreement, and the authentication and
delivery of the Securities have been duly authorized by all
necessary corporate action on the part of the Purchase
Contract Agent. The Purchase Contract Agreement and the
Pledge Agreement have been duly executed and delivered by
the Purchase Contract Agent, and constitute the legal, valid
and binding obligations of the Purchase Contract Agent,
enforceable against the Purchase Contract Agent in accor
dance with its terms, except to the extent that enforcement
thereof may be limited by the Bankruptcy Exceptions.
(iii) the execution, delivery and performance of
the Purchase Contract Agreement and the Pledge Agreement by
the Purchase Contract Agent does not conflict with or con-
stitute a breach of the charter or by-laws of the Purchase
Contract Agent.
(iv) No consent, approval or authorization of, or
registration with or notice to, any New York or federal gov-
ernmental authority or agency is required for the execution,
delivery or performance by the Purchase Contract Agent of
the Purchase Contract Agreement and the Pledge Agreement.
(6) The favorable opinion, dated as of the Closing
Time, of Skadden, Arps, Slate, Meagher & Flom LLP, counsel for
the Underwriter, in form and substance satisfactory to the Under
writer, with respect to the issuance and sale of the Securities,
and other related matters as the Underwriter may reasonably
require, and the Company shall have furnished to such counsel
such documents as they request for the purpose of enabling them
to pass upon such matters.
(c) Between the date of this Agreement and prior to
the Closing Time, no material adverse change shall have occurred
in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Trust or the
Company and its subsidiaries, considered as one enterprise,
whether or not in the ordinary course of business.
(d) At the Closing Time, the Underwriter shall have re-
ceived a certificate of the President or a Vice-President of the
Company and of the Chief Financial Officer or Chief Accounting
Officer of the Company and a certificate of a Regular Trustee of
the Trust, and dated as of the Closing Time, to the effect that
(i) there has been no material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or
business prospects of the Trust or the Company and its subsidiar-
ies considered as one enterprise, whether or not in the ordinary
course of business, (ii) the representations and warranties in
Section 1 hereof are true and correct as though expressly made at
and as of the Closing Time, (iii) the Company and the Trust have
complied with all agreements and satisfied all conditions on
their part to be performed or satisfied at or prior to the
Closing Time, and (iv) no stop order suspending the effectiveness
of the Registration Statement has been issued and no proceedings
for that purpose have been initiated or threatened by the Commis-
sion.
(e) At the time of the execution of this Agreement, the
Underwriter shall have received from Price Waterhouse LLP a
letter dated such date in form and substance satisfactory to the
Underwriter, to the effect set forth below and as to such other
matters as the Underwriter may reasonably request, that:
(i) They are independent accountants with respect to
the Company within the meaning of the Act and the applicable
published rules and regulations thereunder.
(ii) In their opinion, the consolidated financial
statements audited by them and incorporated by reference in
the Registration Statement comply as to form in all material
respects with the applicable accounting requirements of the
1933 Act and the 1934 Act and the published rules and regu-
lations thereunder with respect to registration statements
on Form S-3.
(iii) They have not audited any financial statements
of the Company as of any date or for any period subsequent
to December 31, 1997. Therefore, they are unable to and do
not express any opinion on the financial position, results
of operations or cash flows as of any date or for any period
subsequent to December 31, 1997.
(iv) For purposes of such letter, they have read the
minutes of the 1998 meetings of the Board of Directors and
the Board Committees (Compensation and Nominating, Corporate
Affairs, Audit and Finance) of the Company as set forth in
the minute books at March 13, 1998, officials of the Company
having advised them that the minutes of all such meetings
through that date were set forth therein (except for the
minutes of the February 3, 1998 Audit Committee meeting, the
March 3, 1998 Finance Committee meeting and the March 3,
1998 Corporate Affairs Committee meeting which were not
approved in final form, for which drafts were provided to
them; and except for the February 3, 1998 Compensation and
Nominating Committee meeting and the March 4, 1998 Board of
Directors meeting for which no minutes were available and
for which an agenda for the meeting was provided to them;
the officials of the Company have represented that such
drafts and agenda include all substantive actions taken at
such meetings), and have carried out other procedures to
March 13, 1998 (their work did not extend to the period from
March 14, 1998 to March 17, 1998, inclusive), as follows:
a. With respect to the period from January 1,
1998 to February 28, 1998 they have:
(1) read the unaudited consolidated finan-
cial data of the Company and subsidiaries for
January of both 1997 and 1998 furnished them by
the Company, officials of the Company having ad-
vised them that no such financial data as of any
date or for any period subsequent to January 31,
1998 were available; and
(2) inquired of certain officials of the
Company who have responsibility for financial and
accounting matters as to whether the unaudited
financial data referred to in 4.a.(1) above are
stated on a basis substantially consistent with
that of the audited financial statements included
in the Registration Statement.
The foregoing procedures do not constitute an audit made in
accordance with generally accepted auditing standards. Also,
they would not necessarily reveal matters of significance
with respect to the comments in the following paragraph.
Accordingly, they make no representations as to the suffi-
ciency of the foregoing procedures for the Underwriter's
purposes.
(v) Nothing came to their attention as a result of the
foregoing procedures, however, that caused them to believe
that:
a. (i) At January 31, 1998 there was any change
in the capital stock (except for any increases in the
capital stock in connection with any employee benefit,
dividend reinvestment or stock purchase plan of the
Company), increase in long-term debt or any decreases
in consolidated net current assets (working capital) or
shareholders' equity of the Company and consolidated
subsidiaries as compared with amounts shown in the
December 31, 1997 audited consolidated balance sheet
incorporated by reference in the Registration Statement
or (ii) for the period from January 1, 1998 to January
31, 1998, there were any decreases, as compared with
the corresponding period in the preceding year, in
consolidated net sales or in the total or per share
amounts of net income, except in all instances for
changes, increases, or decreases that the Registration
Statement discloses have occurred or may occur.
(vi) As mentioned under (iv)a, Company officials have
advised them that no consolidated financial data as of any
date or for any period subsequent to February 28, 1998 are
available; accordingly, the procedures carried out by them
with respect to changes in financial statement items after
February 28, 1998 have been, of necessity, even more limited
than those with respect to the period referred to in (iv).
They have made inquiries of certain officials of the Company
who have responsibility for financial and accounting matters
as to whether there was any increase in long-term debt or
any decrease in shareholders' equity of the Company and
consolidated subsidiaries at March 13, 1998 as compared with
amounts shown on the December 31, 1997 audited consolidated
balance sheet incorporated by reference in the Registration
Statement. On the basis of these inquiries and their reading
of the minutes as described in (iv), nothing came to their
attention that caused them to believe that there was any
such change, increase or decrease, except in all instances
for increases or decreases which the Registration Statement
discloses have occurred or may occur.
(vii) For purposes of such letter, they have also read
the items identified by the Underwriter on the Form 10-K
forming part of the Registration Statement incorporated by
reference thereto and have performed the procedures de
scribed in such letter.
(viii) Their audit of the consolidated financial
statements for the period referred to in the introductory
paragraph of such letter comprised audit tests and proce-
dures deemed necessary for the purpose of expressing an
opinion on such consolidated financial statements taken as a
whole. For neither the periods referred to therein nor any
other period did they perform audit tests for the purpose of
expressing an opinion on individual balances of accounts or
summaries of selected transactions such as those enumerated
in such letter and, accordingly, they express no opinion
thereon.
(ix) They have:
a. Read the unaudited pro forma condensed consol-
idated statement of income for the year ended December
31, 1997, incorporated by reference in the Registration
Statement.
b. Inquired of certain officials of the Company
who have responsibility for financial and accounting
matters about:
(1 The basis for their determination of the
pro forma adjustments, and
(2 Whether the unaudited pro forma con-
densed consolidated financial statement referred
to in 9.a. complies as to form in all material
respects with the applicable accounting require-
ments of Rule 11-02 of Regulation S-X.
c. Proved the arithmetic accuracy of the applica-
tion of the pro forma adjustments to the historical
amounts in the unaudited pro forma condensed consoli
dated financial statement.
The foregoing procedures are substantially less in scope
than an examination, the objective of which is the expres-
sion of an opinion on management's assumptions, the pro
forma adjustments, and the application of those adjustments
to historical financial information. Accordingly, they do
not express such an opinion. The foregoing procedures would
not necessarily reveal matters of significance with respect
to the comments in the following paragraph. Accordingly,
they make no representation about the sufficiency of such
procedures for the Underwriter's purposes.
(x) Nothing came to their attention as a result of the
procedures specified in paragraph (ix), however, that caused
them to believe that the unaudited pro forma condensed
consolidated financial statement referred to in (ix)a.
incorporated by reference in the Registration Statement does
not comply as to form in all material respects with the
applicable accounting requirements of Rule 11-02 of Regula-
tion S-X and that the pro forma adjustments have not been
properly applied to the historical amounts in the compila-
tion of those statements. Had they performed additional
procedures or had they made an examination of the condensed
consolidated pro forma financial statement, other matters
might have come to their attention that would have been
reported to the Underwriter.
(f at the time of the execution of this Agreement, the
Underwriter shall have received from KPMG Peat Marwick LLP
independent certified public accountants to Thermo King Corpora-
tion ("Thermo King"), a letter dated such date in form and
substance satisfactory to the Underwriter, to the effect set
forth below and as to such other matters as the Underwriter may
reasonably request, that:
(i) They are independent certified public accountants
with respect to Thermo King within the meaning of the Act
and the applicable published rules and regulations thereun-
der.
(ii) In their opinion, the combined financial state-
ments audited by them and incorporated by reference in the
Registration Statement comply as to form in all material
respects with the applicable accounting requirements of the
1933 Act and the related published rules and regulations
thereunder with respect to a registration statement on Form
S-3.
(iii) They have not audited any financial statements
of Thermo King as of any date or for any period subsequent
to December 31, 1996; although they have conducted an audit
for the year ended December 31, 1996, the purpose (and
therefore the scope) of the audit was to enable them to
express their opinion on the combined financial statements
as of December 31, 1996, and for the year then ended, but
not on the financial statement for any interim period within
that year. Therefore, they are unable to and do not express
any opinion on the unaudited combined balance sheet as of
September 30, 1997 and 1996, and the unaudited combined
statements of income and cash flows for the nine-month
periods ended September 30, 1996 and 1997, incorporated by
reference in the registration statement, or on the financial
position or results of operations as of any date or for any
period subsequent to December 31, 1996.
(iv) Thermo King was acquired by the Company effective
October 31, 1997. They have performed no procedures since
that date. For purposes of such letter they have read the
minutes of the meetings of the Board of Directors of Thermo
King as set forth in the minute books at October 31, 1997,
officials of Thermo King having advised them that the min-
utes of all such meetings through that date were set forth
therein; they have carried out other procedures to October
31, 1997, as follows (their work did not extend to the
period from November 1, 1997, to March 17, 1998, inclusive:
a. With respect to the nine-month period ended
September 30, 1997 they have:
(1 Performed the procedures specified by
the American Institute of Certified Public Accoun-
tants for a review of interim financial informa-
tion as described in SAS No. 71, Interim Financial
Information, on the unaudited combined balance
sheet as of September 30, 1997, and the unaudited
combined statement of income and cash flows for
the nine-month period ended September 30, 1997,
incorporated by reference in the Registration
Statement.
(2 Inquired of certain officials of Thermo
King who have responsibility for financial sand
accounting matters whether the unaudited combined
financials statements referred to in 4.a.(i) com-
ply as to form in all material respects with the
applicable accounting requirements of the Act and
the related published rules and regulations.
The foregoing procedures do not constitute an audit
conducted in accordance with generally accepted audit-
ing standards. Also, they would not necessarily reveal
matters of significance with respect to the comments in
the following paragraph. Accordingly, they make no
representations regarding the sufficiency of the fore
going procedures of the Underwriter's purposes.
(v) Nothing came to their attention as a result of
the foregoing procedures, however, that caused them to
believe that:
a. (1) Any material modifications should be made
to the unaudited combined financial statements de-
scribed in 4.a.(i), incorporated by reference in the
registration statement, for them to be in conformity
with generally accepted accounting principles.
(vi) The Company was acquired by Ingersoll-Rand Com-
pany effective October 31, 1997. They have performed no
procedures since that date. They have inquired of certain
officials of Thermo King who have responsibility for finan-
cial and accounting matters whether (a) at October 31, 1997,
there was any increase in long-term debt or any decreases in
combined net current assets of the combined companies as
compared with amounts shown on the September 30, 1997,
unaudited combined balance sheet incorporated by reference
in the registration statement and (b) for the period from
October 1, 1997, to October 31, 1997, there were any de-
creases, as compared with the corresponding period in the
preceding year, in combined net sales or in the amount of
income before interest and taxes. On the basis of these
inquiries and their reading of the minutes as described in
4, nothing came to their attention that caused them to
believe that there was any such change, increase, or de-
crease, except in all instances for increases, or decreases
that the Registration Statement discloses have occurred or
may occur.
(g At the Closing Time, the Underwriter shall have re-
ceived from Price Waterhouse, LLP a letter, dated as of the
Closing Time, to the effect that they reaffirm the statements
made in the letter furnished pursuant to subsection (e) of this
Section, except that the specified date referred to shall be a
date not more than five days prior to the Closing Time.
(h At the Closing Time, and at each Date of Delivery, if
any, counsel for the Underwriter shall have been furnished with
such documents and opinions as they may require for the purpose
of enabling them to pass upon the issuance and sale of the
Securities as herein contemplated and related proceedings, 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 Offerors in connec-
tion with the issuance and sale of the Securities as herein
contemplated shall be satisfactory in form and substance to the
Underwriter and counsel for the Underwriter.
(i At the Closing Time, (i) the Securities shall be rated
Investment Grade by any nationally recognized statistical rating
agency, and the Offerors shall have delivered to the Underwriter
a letter, from such nationally recognized statistical rating
agency, or other evidence satisfactory to the Underwriter,
confirming that the Securities have Investment Grade ratings;
(ii) there shall not have occurred any decrease in the rating
assigned to the Securities or any other securities of the Company
or of the financial condition of the Company by any "nationally
recognized statistical rating organization," as defined for
purposes of Rule 436(g)(2) under the 1933 Act Regulations, and
(iii) no such organization shall have publicly announced that it
has under surveillance or review its rating of the Securities or
any other securities of the Company or of the financial condition
of the Company.
(j At the Closing Time, the Income PRIDES, the Growth
PRIDES and the Shares shall have been approved for listing on the
New York Stock Exchange upon notice of issuance.
(k In the event that the Underwriter exercises the options
provided in Section 2(b) hereof to purchase all or any portion of
the Option Securities, the representations and warranties of the
Offerors contained herein and the statements in any certificates
furnished by the Offerors hereunder shall be true and correct as
of, and as if made on, each Date of Delivery, and at the relevant
Date of Delivery, the Underwriter shall have received:
(1 A certificate, dated such Date of Delivery, of the
President or a Vice-President of the Company and the Chief
Financial Officer or Chief Accounting Officer of the Company
and a certificate of a Regular Trustee of the Trust confirm-
ing that the certificate delivered at the Closing Time pursu-
ant to Section 5(d) hereof is true and correct as of, and as
if made on, such Date of Delivery.
(2 The favorable opinion of Patricia Nachtigal, Esq.,
Vice President and General Counsel for the Company, in form
and substance satisfactory to counsel for the Underwriter,
dated such Date of Delivery, relating to the Option Securi-
ties and otherwise to the same effect as the opinion re-
quired by Section 5(b)(1) hereof.
(3 The favorable opinion of Simpson Thacher & Bart-
lett, special counsel and special tax counsel for the Offer-
ors, in form and substance satisfactory to counsel for the
Underwriter, dated such Date of Delivery, relating to the
Option Securities and otherwise to the same effect as the
opinion required by Sections 5(b)(2) and 5(b)(6) hereof.
(4 The favorable opinion of Richards, Layton & Fin-
ger, P.A., special Delaware counsel for the Offerors, in
form and substance satisfactory to counsel for the Under
writer, dated such Date of Delivery, relating to the Option
Securities and otherwise to the same effect as the opinion
required by Section 5(b)(3) hereof.
(5 The favorable opinion of Pepper Hamilton LLP coun-
sel to The First National Bank of Chicago, in form and sub-
stance satisfactory to counsel for the Underwriter, dated
such Date of Delivery, relating to the Option Securities and
otherwise to the same effect as the opinion required by
Section 5(b)(4) hereof.
(6 The favorable opinion of Emmet, Marvin and Martin,
counsel to The Bank of New York, as Purchase Contract Agent,
in form and substance satisfactory to counsel for the Under
writer, dated such Date of Delivery, relating to the Option
Securities and otherwise to the same effect as the opinion
required by Section 5(b)(5) hereof.
(7 The favorable opinion of Skadden, Arps, Slate,
Meagher & Flom LLP, counsel for the Underwriter, dated such
Date of Delivery, relating to the Option Securities and
otherwise to the same effect as the opinion required by
Section 5(b)(7) hereof.
(8 A letter from Price Waterhouse LLP in form and sub
stance satisfactory to the Underwriter and dated such Date
of Delivery, substantially the same in form and substance as
the letter furnished to the Underwriter pursuant to Sec-
tion 5(e) hereof, except that the "specified date" in the
letter furnished pursuant to this Section shall be a date
not more than five days prior to such Date of Delivery.
(9 At such Date of Delivery, (i) the Securities shall
be rated Investment Grade by any nationally recognized
statistical rating agency, and the Offerors shall have
delivered to the Underwriter a letter from such nationally
recognized statistical rating agency, or other evidence
satisfactory to the Underwriter, confirming that the Securi-
ties have Investment Grade ratings; (ii) there shall not
have occurred any decrease in the rating assigned to the
Securities or any other securities of the Company or of the
financial condition of the Company by any "nationally recog-
nized statistical rating organization," as defined for
purposes of Rule 436(g)(2) under the 1933 Act Regulations,
and (iii) no such organization shall have publicly announced
that it has under surveillance or review its rating of the
Securities or any other securities of the Company or of the
financial condition of the Company.
If any condition specified in this Section 5 shall not have
been fulfilled when and as required to be fulfilled, this Agree-
ment, or, in the case of any condition to the purchase of Option
Securities on a Date of Delivery which is after the Closing Time,
the obligations of the Underwriter to purchase the relevant
Option Securities may be terminated by the Underwriter by notice
to the Company at any time at or prior to the Closing Time, or
such Date of Delivery, as the case may be, 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.
SECTION 6. Indemnification.
(a The Offerors agree to jointly and severally indemnify
and hold harmless the Underwriter and each person, if any, who
controls the Underwriter within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 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), including the Rule 430A Information
and the Rule 434 Information deemed to be part thereof, if
applicable, or the omission or alleged omission therefrom of
a material fact required to be stated therein or necessary
to make the statements therein not misleading or arising out
of any untrue statement or alleged untrue statement of a
material fact included in any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading;
(ii) against any and all loss, liability,
claim, damage and expense whatsoever, as incurred, to the
extent of the aggregate amount paid in settlement of any
litigation, or any investigation or proceeding by any gov-
ernmental 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
Offerors; and
(iii) against any and all expense whatsoever,
as incurred (including the fees and disbursements of counsel
chosen by the Underwriter), reasonably incurred in inves-
tigating, 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 the foregoing 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 confor-
mity with written information furnished to the Offerors by the
Underwriter expressly for use in the Registration Statement (or
any amendment thereto), including the Rule 430A Information and
the Rule 434 Information deemed to be a part thereof, if applica-
ble, or any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto).
(b The Underwriter agrees to indemnify and hold harmless
the Company, its directors, each of its officers who signed the
Registration Statement, the Trust and each of its Trustees 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 this Section, as incurred, but
only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration State-
ment (or any amendment thereto), including the Rule 430A Informa-
tion and the Rule 434 Information deemed to be a part thereof, if
applicable, or any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Offerors by
the Underwriter expressly for use in the Registration Statement
(or any amendment thereto) or such preliminary prospectus or the
Prospectus (or any amendment or supplement thereto).
(c 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 6(b) above, counsel to the indemnified parties shall
be selected by the Company. An indemnifying party may partici-
pate at its own expense in the defense of any such action;
provided, however, that counsel to the indemnifying party shall
not (except with the consent of the indemnified party) also be
counsel to the indemnified party. In no event shall the indemni-
fying parties be liable for fees and expenses of more than one
counsel (in addition to any local counsel) separate from their
own counsel for all indemnified parties in connection with any
one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or
circumstances. 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 governmen-
tal agency or body, commenced or threatened, or any claim whatso-
ever in respect of which indemnification or contribution could be
sought under this Section 6 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 liabili-
ty 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 If at any time an indemnified party shall have request-
ed 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 settle-
ment 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 bene-
fits received by the Offerors on the one hand, and the Underwrit-
er, 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 Offerors on the one hand, and the Underwriter, on the other
hand, in connection with the statements or omissions which
resulted in such losses, liabilities, claims, damages or expens-
es, as well as any other relevant equitable considerations.
The relative benefits received by Offerors 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 such Securities (before deducting
expenses) received by the Offerors and the total underwriting
discount received by the Underwriter, in each case as set forth
on the cover of the Prospectus, or, if Rule 434 is used, the
corresponding location on the Term Sheet bear to the aggregate
initial public offering price of such Securities as set forth on
such cover.
The relative fault of the Offerors, on the one hand, and the
Underwriter, on the other hand, 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
Offerors or by the Underwriter and the parties' relative intent,
knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Offerors 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 consider-
ations 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 pro-
ceeding by any governmental agency or body, commenced or threat-
ened, 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 Under
writer shall not be required to contribute any amount in excess
of the amount by which the total price at which the Securities
underwritten by it and distributed to the public were offered to
the public exceeds the amount of any damages which the Under
writer has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omis-
sion.
No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 1933 Act) shall be entitled to
contribution from any person who was not guilty of such fraudu-
lent misrepresentation.
For purposes of this Section 7, each person, if any, who
controls the 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 the Underwriter, and each director of the
Company, each officer of the Company and each Trustee of the
Trust who signed the Registration Statement, and each person, if-
any, who controls the Company and the Trust 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 Offerors.
SECTION 8. Representations, Warranties and Agreements to
Survive Delivery. All representations, warranties and agreements
contained in this Agreement and the Pricing Agreement, or con-
tained in certificates of officers of the Company or trustees of
the Trust 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 and
payment for the Securities to the Underwriter.
SECTION 9. Termination of Agreement.
(a The Underwriter may terminate this Agreement, by notice
to the Company at any time at or prior to the Closing Time, if
(i) there has been, since the date of this Agreement or since the
respective dates as of which information is given in the Prospec-
tus, any material adverse change or any development which could
reasonably be expected to result in a prospective material
adverse change, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising
in the ordinary course of business, or (ii) there has occurred
any material adverse change in the financial markets in the
United States or any outbreak of hostilities or escalation of
hostilities or other calamity or crisis, or any change or devel-
opment involving a prospective change in national or interna-
tional political, financial or economic conditions the effect of
which is such as to make it, in the judgment of the Underwriter
impracticable to market the Securities or to enforce contracts
for the sale of the Securities, or (iii) if trading in the Common
Stock or any other security of the Company has been suspended or
limited by the Commission, NASD or the New York Stock Exchange,
or if trading generally on either the American Stock Exchange,
the New York Stock Exchange or in the over-the-counter market has
been suspended or limited, or minimum or maximum prices for
trading have been fixed, or maximum ranges for prices for securi-
ties have been required, by either of said exchanges or by such
system or by order of the Commission, NASD or any other govern-
mental authority, or (iv) if a banking moratorium has been
declared by either Federal, New York or New Jersey authorities.
(b If this Agreement and the Pricing Agreement are termi-
nated pursuant to this Section 9, such termination shall be
without liability of any party to any other party except as
provided in Section 4, 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 the Underwriter c/o Merrill Lynch at Merrill Lynch World Head
quarters, World Financial Center, North Tower, New York, New
York 10281, Attention of Huston McCollough, Managing Director,
with a copy to Skadden, Arps, Slate, Meagher & Flom LLP, Atten-
tion of John Osborn, Esq.; notices to the Offerors shall be
directed to it at Ingersoll-Rand Company, 200 Chestnut Ridge
Road, Woodcliff Lake, New Jersey 07675, Attention of Patricia
Nachtigal, Esq., Vice President and General Counsel.
SECTION 11. Parties. This Agreement and the Pricing Agree-
ment shall each inure to the benefit of and be binding upon the
Offerors and the Underwriter and their respective successors.
Nothing expressed or mentioned in this Agreement or the Pricing
Agreement is intended or shall be construed to give any person,
firm or corporation, other than the Underwriter and the Offerors
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 the
Pricing Agreement or any provision herein or therein contained.
This Agreement and the Pricing Agreement and all conditions and
provisions hereof and thereof are intended to be for the sole and
exclusive benefit of the parties hereto and thereto and their
respective successors and legal representatives, and said con-
trolling 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 Under
writer shall be deemed to be a successor by reason merely of such
purchase.
SECTION 12. GOVERNING LAW AND TIME. THIS AGREEMENT AND THE
PRICING AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORD
ANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED TIMES OF
DAY REFER TO NEW YORK CITY TIME UNLESS OTHERWISE INDICATED.
SECTION 13. Effect of Headings. The Article and Section
headings herein are for convenience only and shall not affect the
construction hereof.
If the foregoing is in accordance with your under-
standing of our agreement, please sign and return to the Company
a counterpart hereof, whereupon this instrument, along with all
counterparts, shall become a binding agreement among the Company,
the Trust and the Underwriter in accordance with its terms.
Very truly yours,
INGERSOLL-RAND COMPANY
By:
Name:
Title:
INGERSOLL-RAND FINANCING I
By: INGERSOLL-RAND COMPANY
as Depositor
By:
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:
Name:
Authorized Signatory:
Schedule I
Significant Subsidiaries
Clark Equipment Company
Thermo King Corporation
The Torrington Company
Schlage Lock Company
Ingersoll-Rand Company
(a New Jersey Corporation)
Ingersoll-Rand Financing I
(a Delaware Business Trust)
14,000,000 FELINE PRIDES_
(Stated Amount of $25 per Security)
Consisting of
12,600,000 Income PRIDES_
each consisting of
a Purchase Contract of Ingersoll-Rand Company Requiring the
Purchase on May 16, 2001 (or earlier) of certain Shares of Common
Stock of Ingersoll-Rand Company
and
a 6.22% Capital Security of Ingersoll-Rand Financing I
and
1,400,000 Growth PRIDES_
each consisting of
a Purchase Contract of Ingersoll-Rand Company Requiring the
Purchase on May 16, 2001 (or earlier) of certain shares of Common
Stock of Ingersoll-Rand Company
and
a 1/40 Undivided Beneficial Interest in a Zero-Coupon U.S.
Treasury Security having a Principal Amount equal to $1,000 and
maturing on May 15, 2001
and
1,400,000 6.22% Capital Securities of Ingersoll-Rand Financing I
(Liquidation Amount $25 per Capital Security)
PRICING AGREEMENT
_____________________
"FELINE PRIDES," "Income PRIDES" and "Growth PRIDES"
are service marks of Merrill Lynch & Co., Inc.
March 17, 1998
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED,
Merrill Lynch World Headquarters
World Financial Center
North Tower
New York, New York 10281
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement, dated
March 17, 1998 (the "Underwriting Agreement"), relating to the
purchase by the Underwriter named therein of the above Income
PRIDES (the "Income PRIDES"), Growth PRIDES (The "Growth PRIDES")
and Capital Securities (the "Capital Securities" and, together
with the Income PRIDES and Growth PRIDES, the "Securities") of
Ingersoll-Rand Company (the "Company"), and Ingersoll-Rand
Financing I (the "Trust"). The Securities are being issued and
sold by the Company and the Trust to the Underwritier on the
terms and conditions set forth in the Underwriting Agreement.
Pursuant to Section 2 of the Underwriting Agreement,
the Company and the Trust agree with the Underwriter as follows:
1. The initial public offering price, and the aggre
gate interest rate to be paid by the Offerors, per security
for the Securities, determined as provided in said Section
2, shall be (a) in the case of each Income PRIDES, $25.00
and 6.75%, (b) in the case of each Growth PRIDES, $21.13 and
.78% and (c) in the case of each separately offered Capital
Security, $25.00 and 6.22%.
2. The respective purchase prices per security for the
Securities to be paid by the several Underwriters shall be
equal to the initial public offering prices set forth in
paragraph 1. above. The Company shall pay a commission to
the Underwriters equal, in the case of the Initial Securi
ties, to $10,500,000 and, with respect to the Option Securi
ties, $.75 per security in the case of Income PRIDES, $.575
per security in the case of Growth PRIDES and $.175 per
security in the case of separately offered Capital Securi
ties.
If the foregoing is in accordance with your under
standing of our agreement, please sign and return to the Company
a counterpart hereof, whereupon this instrument, along with all
counterparts, shall become a binding agreement among the Company,
the Trust and the Underwriter in accordance with its terms.
Very truly yours,
INGERSOLL-RAND COMPANY
By:
Name:
Title:
INGERSOLL-RAND FINANCING I
By: INGERSOLL-RAND COMPANY
as Depositor
By:
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:
Name:
Authorized Signatory: