EXHIBIT 1.1
FRANKLIN RESOURCES, INC.
3.700% SENIOR NOTES DUE 2008
----------
UNDERWRITING AGREEMENT
----------------------
April 3, 2003
Goldman, Sachs & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated,
As Representatives of the several Underwriters
named in Schedule I hereto,
c/o Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004.
Ladies and Gentlemen:
Franklin Resources, Inc., a Delaware corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the Underwriters named in Schedule I hereto (the "Underwriters") an aggregate
of $420 million principal amount of 3.700% Senior Notes due 2008 specified above
(the "Securities").
1. The Company represents and warrants to, and agrees with, each of
the Underwriters that:
(a) A registration statement on Form S-3 (File No. 333-12101),
as amended by Amendment No. 1 thereto (the "Initial Registration
Statement"), in respect of the Securities has been filed with the
Securities and Exchange Commission (the "Commission"); the Initial
Registration Statement and any post-effective amendment thereto, each
in the form heretofore delivered to you, and, excluding exhibits
thereto but including all documents incorporated by reference in the
prospectus contained therein, to you for each of the other
Underwriters, have been declared effective by the Commission in such
form; other than a registration statement, if any, increasing the
size of the offering (a "Rule 462(b) Registration Statement"), filed
pursuant to Rule 462(b) under the Securities Act of 1933, as amended
(the "Act"), which became effective upon filing, no other document
with respect to the Initial Registration Statement or document
incorporated by reference therein has heretofore been filed with the
Commission (other than prospectuses filed pursuant to Rule 424(b) of
the rules and regulations of the Commission under the Act, each in
the form heretofore delivered to you; and no stop order suspending
the effectiveness of the Initial Registration Statement, any
post-effective amendment thereto or the Rule 462(b) Registration
Statement, if any, has been issued and no proceeding for that purpose
has been initiated or threatened by the Commission (any preliminary
prospectus included in the Initial Registration Statement or filed
with the Commission pursuant to Rule 424(a) of the rules and
regulations of the Commission under the Act is hereinafter called a
"Preliminary Prospectus"; the various parts of the Initial
Registration Statement, any post-effective amendment thereto and the
Rule 462(b) Registration Statement, if any, including all exhibits
thereto but excluding Form T-1 and including (i) the information
contained in the form of final prospectus filed with the Commission
pursuant to Rule 424(b) under the Act in accordance with Section 5(a)
hereof and deemed by virtue of Rule 430A under the Act to be part of
the Initial Registration Statement at the time it was declared
effective and (ii) the documents incorporated by reference in the
prospectus contained in the Initial Registration Statement at the
time such part of the Initial Registration Statement became
effective, each as amended at the time such part of the Initial
Registration Statement became effective or such part of the Rule
462(b) Registration Statement, if any, became or hereafter becomes
effective, are hereinafter collectively called the "Registration
Statement"; such final prospectus, in the form first filed pursuant
to Rule 424(b) under the Act, is hereinafter called the "Prospectus";
any reference herein to any Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the Act, as
of the date of such Preliminary Prospectus or Prospectus, as the case
may be; any reference to any amendment or supplement to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to
and include any documents filed after the date of such Preliminary
Prospectus or Prospectus, as the case may be, under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated by reference in such Preliminary Prospectus or
Prospectus, as the case may be; and any reference to any amendment to
the Registration Statement shall be deemed to refer to and include
any annual report of the Company filed pursuant to Section 13(a) or
15(d) of the Exchange Act after the effective date of the Initial
Registration Statement that is incorporated by reference in the
Registration Statement;
(b) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission, and each
Preliminary Prospectus, at the time of filing thereof, conformed in
all material respects to the requirements of the Act and the rules
and regulations of the Commission thereunder, and did not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in writing
to the Company by an Underwriter through the Representatives
expressly for use therein;
(c) The documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the
case may be, conformed in all material respects to the requirements
of the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder, and none of such documents
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; and any further documents so
filed and incorporated by reference in the Prospectus or any further
amendment or supplement thereto, when such documents become effective
or are filed with the Commission, as the case may be, will conform in
all material respects to the requirements of the Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission
thereunder 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;
(d) The Registration Statement conforms, and any further
amendments or supplements to the Registration Statement will conform,
in all material respects to the requirements of the Act and the Trust
Indenture Act (the "TIA") and the rules and regulations of the
Commission thereunder and do not and will not, as of the applicable
effective date of the Registration Statement and any amendment
thereto, contain an untrue statement of a material fact or omit to
2
state a material fact required to be stated therein or necessary to
make the statements therein not misleading; the Prospectus and any
further amendments or supplements to the Prospectus will conform, in
all material respects to the requirements of the Act and the rules
and regulations of the Commission thereunder and will not, as of the
applicable filing date of the Prospectus and any amendment or
supplement thereto, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein in light of the
circumstances in which they were made not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter
through the Representatives expressly for use therein;
(e) Neither the Company nor any subsidiary of the Company which
is a "significant subsidiary" within the meaning of Regulation S-X
promulgated under the Act (each, a "Significant Subsidiary") has
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus any material
loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any
labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Prospectus; and,
since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there has not been any
change in the capital stock or long-term debt of the Company or any
of its subsidiaries or any material adverse change, or any
development involving a prospective material adverse change, in or
affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the
Prospectus;
(f) The Company and its Significant Subsidiaries have good and
marketable title in fee simple to all real property and good and
marketable title to all personal property owned by them, in each case
free and clear of all liens, encumbrances and defects except such as
are described in the Prospectus or such as do not materially affect
the value of such property and do not interfere with the use made and
proposed to be made of such property by the Company and its
Significant Subsidiaries; and any real property and buildings held
under lease by the Company and its Significant Subsidiaries are held
by them under valid, subsisting and enforceable leases with such
exceptions as are not material and do not interfere with the use made
and proposed to be made of such property and buildings by the Company
and its Significant Subsidiaries;
(g) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Delaware, with power and authority (corporate and other) to
own its properties and conduct its business as described in the
Prospectus, and has been duly qualified as a foreign corporation for
the transaction of business and is in good standing under the laws of
each other jurisdiction in which it owns or leases properties or
conducts any business so as to require such qualification, except
where the failure to so qualify and be in good standing would not
have, individually or in the aggregate, a material adverse effect on
the financial condition or earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one
enterprise (a "Material Adverse Effect"); and each Significant
Subsidiary has been duly incorporated and is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation except where the failure to so qualify and be in good
standing would not have a Material Adverse Effect;
3
(h) The Company has an authorized capitalization as set forth
in the Prospectus under "Actual" in the section entitled
"Capitalization," and all of the issued shares of capital stock of
the Company have been duly and validly authorized and issued, are
fully paid and non-assessable ; and all of the issued shares of
capital stock of each subsidiary of the Company have been duly and
validly authorized and issued, are fully paid and non-assessable; all
shares of capital stock of each subsidiary of the Company (except for
directors' qualifying shares) owned directly or indirectly by the
Company, are owned free and clear of all liens, encumbrances,
equities or claims;
(i) The Securities have been duly authorized and, when executed
and authenticated in accordance with the provisions of the Indenture
(as defined below) and delivered to and paid for by the Underwriters
pursuant to this Agreement, will have been duly executed and
delivered by the Company and will constitute the legal, valid and
binding obligations of the Company entitled to the benefits provided
by the indenture dated as of May 19, 1994, as supplemented as of
October 9, 1996 (as supplemented, the "Indenture"), between the
Company and JPMorgan Chase Bank, as Trustee (the "Trustee"), under
which they are to be issued, which is substantially in the form filed
as an exhibit to the Registration Statement; the Indenture has been
duly authorized and constitutes the legal, valid and binding
enforceable in accordance with its terms, subject, as to the
enforcement of remedies, to applicable bankruptcy, reorganization,
insolvency, moratorium, fraudulent conveyance, preference or other
laws affecting creditors' rights generally from time to time in
effect and to general principles of equity , regardless of whether
enforcement is sought in a proceeding at law or in equity; the
Securities and the Indenture will conform to the descriptions thereof
in the Prospectus; and the Indenture is duly qualified under the
requirements of the TIA;
(j) The issuance and sale of the Securities and the compliance
by the Company with all of the provisions of the Securities, the
Indenture and this Agreement and the consummation of the transactions
herein and therein contemplated will not conflict with or result in a
breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other material agreement or instrument to which the
Company or any of its Significant Subsidiaries is a party or by which
the Company or any of its Significant Subsidiaries is bound or to
which any of the property or assets of the Company or any of its
Significant Subsidiaries is subject, nor will such action result in
any violation of the provisions of the Certificate of Incorporation
or by-laws of the Company or any statute or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of
their properties; and no consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental agency or body is required for the issuance and sale of
the Securities or the consummation by the Company of the transactions
contemplated by this Agreement or the Indenture, except the
registration under the Act of the Securities, such as have been
obtained under the TIA and such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and
distribution of the Securities by the Underwriters and except where
the failure to obtain such consent, approval, authorization, order,
registration or qualification would not, individually or in the
aggregate, have a Material Adverse Effect;
(k) Neither the Company nor any of its Significant Subsidiaries
is in violation of its Certificate of Incorporation or by-laws or in
default in the performance or observance of any material obligation,
agreement, covenant or condition contained in any indenture,
4
mortgage, deed of trust, loan agreement, lease or other agreement or
instrument to which it is a party or by which it or any of its
properties may be bound, which violation or default would have a
Material Adverse Effect;
(l) The statements set forth in the Prospectus under the
captions "Description of the Notes" and "Description of Debt
Securities", insofar as they purport to constitute a summary of the
terms of the Securities, and under the captions "Underwriting", "Plan
of Distribution" and "ERISA Considerations", insofar as they purport
to describe the provisions of the laws and documents referred to
therein, are accurate and complete in all material respects;
(m) Other than as set forth in the Prospectus, there are no
legal or governmental proceedings pending to which the Company or any
of its subsidiaries is a party or of which any property of the
Company or any of its subsidiaries is the subject which, if
determined adversely to the Company or any of its subsidiaries, would
have a Material Adverse Effect; and, to the best of the Company's
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(n) The Company is not and, after giving effect to the offering
and sale of the Securities, will not be an "investment company", as
such term is defined in the Investment Company Act of 1940, as
amended (the "Investment Company Act"); and the Company is not
required to register as an investment adviser with the Commission
under the Investment Advisers Act of 1940, as amended (the "Advisers
Act") and is not required to register as a broker-dealer with the
Commission under the Exchange Act;
(o) PricewaterhouseCoopers LLP, who have certified certain
financial statements of the Company and its subsidiaries, are
independent public accountants as required by the Act and the rules
and regulations of the Commission thereunder;
(p) The Company is registered as a bank holding company and a
financial holding company under the Bank Holding Company Act of 1956,
as amended; and each of the Company's bank subsidiaries has been duly
organized and is validly existing and in good standing, as
applicable, as a commercial bank under the laws of the United States
or as a state-chartered or foreign bank or banking corporation under
the laws of such subsidiary's jurisdiction of incorporation, as the
case may be;
(q) Each subsidiary of the Company required to be registered
under the Advisers Act is duly registered as an investment adviser
with the Commission under the Advisers Act, and in each jurisdiction
where the conduct of its business requires such registration, and
such subsidiary is not prohibited from acting as an investment
adviser or carrying on its business as now conducted or as
contemplated in the Registration Statement by any applicable laws,
rules, regulations, orders, by-laws or similar requirements except as
would not have a Material Adverse Effect;
(r) Each investment company or account for which the Company or
any of its subsidiaries acts as investment adviser and which is
required to be registered with the Commission as an investment
company under the Investment Company Act is duly registered with the
Commission as an investment company under the Investment Company Act
except as would not have a Material Adverse Effect; and
(s) Each subsidiary of the Company required to be registered as
a broker-dealer with the Commission under the Exchange Act is duly
registered as a broker-dealer with the Commission under the Exchange
Act, and such subsidiary is not prohibited from acting as
5
broker-dealer or carrying on its business as now conducted or as
contemplated in the Registration Statement by any applicable laws,
rules, regulations, orders, by-laws or similar requirements except as
would not have a Material Adverse Effect.
2. Subject to the terms and conditions herein set forth, the Company
agrees to sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company, at a purchase price of
99.377% of the principal amount thereof, plus accrued interest, if any, from
April 8, 2003 to the Time of Delivery (as defined herein), the principal amount
of Securities set forth opposite the name of such Underwriter in Schedule I
hereto.
3. Upon the authorization by you of the release of the Securities,
the several Underwriters propose to offer the Securities for sale upon the terms
and conditions set forth in the Prospectus.
4. (a) The Securities to be purchased by each Underwriter hereunder
will be represented by one or more definitive global Securities in book-entry
form which will be deposited by or on behalf of the Company with The Depository
Trust Company ("DTC") or its designated custodian. The Company will deliver the
Securities to Goldman, Sachs & Co., for the account of each Underwriter, against
payment by or on behalf of such Underwriter of the purchase price therefor by
wire transfer of Federal (same-day) funds to the account specified by the
Company to the Representatives at least forty eight hours in advance by causing
DTC to credit the Securities to the account of Goldman, Sachs & Co. The Company
will cause the certificates representing the Securities to be made available to
the Representatives for checking at least twenty-four hours prior to the Time of
Delivery (as defined below) at the office of DTC or its designated custodian
(the "Designated Office"). The time and date of such delivery and payment shall
be 9:30 A.M., New York City time, on April 8, 2003 or such other time and date
as the Representatives and the Company may agree upon in writing. Such time and
date are herein called the "Time of Delivery".
(b) The documents to be delivered at the Time of Delivery by or on
behalf of the parties hereto pursuant to Section 7 hereof, including the
cross-receipt for the Securities and any additional documents requested by the
Underwriters pursuant to Section 7(j) hereof, will be delivered at the offices
of Sullivan & Cromwell LLP, 1888 Century Park East, Los Angeles, California
90067 (the "Closing Location"), and the Securities will be delivered at the
Designated Office, all at the Time of Delivery. A meeting will be held at the
Closing Location at 2:00 P.M., Los Angeles time, on the New York Business Day
next preceding such Time of Delivery, at which meeting the final drafts of the
documents to be delivered pursuant to the preceding sentence will be available
for review by the parties hereto. For the purposes of this Section 4, "New York
Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in New York are generally
authorized or obligated by law or executive order to close.
5. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you and to
file such Prospectus pursuant to Rule 424(b) under the Act not later
than the Commission's close of business on the second business day
following the execution and delivery of this Agreement, or, if
applicable, such earlier time as may be required by Rule 424(b)(3)
under the Act; to make no further amendment or any supplement to the
Registration Statement or Prospectus prior to the Time of Delivery
which shall be disapproved by you promptly after reasonable notice
thereof; to advise you, promptly after it receives notice thereof, of
the time when any amendment to the Registration Statement has been
filed or becomes effective or any supplement to the Prospectus or any
amended Prospectus has been filed and to furnish you with copies
thereof; to file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the
6
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of the Prospectus and for so long
as the delivery of a prospectus is required in connection with the
offering or sale of the Securities; to advise you, promptly after it
receives notice thereof, of the issuance by the Commission of any
stop order or of any order preventing or suspending the use of any
Preliminary Prospectus or prospectus, of the suspension of the
qualification of the Securities for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for
any such purpose, or of any request by the Commission for the
amending or supplementing of the Registration Statement or Prospectus
or for additional information; and, in the event of the issuance of
any stop order or of any order preventing or suspending the use of
any Preliminary Prospectus or prospectus or suspending any such
qualification, promptly to use its best efforts to obtain the
withdrawal of such order;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Securities for offering and sale
under the securities laws of such jurisdictions as you may request
and to comply with such laws so as to permit the continuance of sales
and dealings therein in such jurisdictions for as long as may be
necessary to complete the distribution of the Securities, provided
that in connection therewith the Company shall not be required to
qualify as a foreign corporation or to file a general consent to
service of process in any jurisdiction;
(c) Prior to 10:00 A.M., New York City time, on the New York
Business Day next succeeding the date of this Agreement and from time
to time, to furnish the Underwriters with written and electronic
copies of the Prospectus in New York City in such quantities as you
may reasonably request, and, if the delivery of a prospectus is
required by law at any time prior to the expiration of nine months
after the time of issue of the Prospectus in connection with the
offering or sale of the Securities and if at such time any events
shall have occurred as a result of which the Prospectus as then
amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were made when such Prospectus is delivered, not
misleading, or, if for any other reason it shall be necessary during
such period to amend or supplement the Prospectus or to file under
the Exchange Act any document incorporated by reference in the
Prospectus in order to comply with the Act, the Exchange Act or the
TIA, to notify you and upon your request to file such document and to
prepare and furnish without charge to each Underwriter and to any
dealer in securities as many written and electronic copies as you may
from time to time reasonably request of an amended Prospectus or a
supplement to the Prospectus which will correct such statement or
omission or effect such compliance, and in case any Underwriter is
required by law to deliver a prospectus in connection with sales of
any of the Securities at any time nine months or more after the time
of issue of the Prospectus, upon your request but at the expense of
such Underwriter, to prepare and deliver to such Underwriter as many
written and electronic copies as you may reasonably request of an
amended or supplemented Prospectus complying with Section 10(a)(3) of
the Act;
(d) To make generally available to its securityholders as soon
as practicable, but in any event not later than eighteen months after
the effective date of the Registration Statement (as defined in Rule
158(c) under the Act), an earnings statement of the Company and its
subsidiaries (which need not be audited) complying with Section 11(a)
of the Act and the rules and regulations of the Commission thereunder
(including, at the option of the Company, Rule 158);
7
(e) During the period beginning from the date hereof and
continuing to and including the later of the Time of Delivery and
such earlier time as you may notify the Company, not to offer, sell,
contract to sell or otherwise dispose of, except as provided
hereunder, any securities of the Company that are substantially
similar to the Securities;
(f) During a period of two years from the effective date of the
Registration Statement, to furnish to you copies of all reports or
other communications (financial or other) furnished to stockholders,
and to deliver to you (i) as soon as they are available, copies of
any reports and financial statements furnished to or filed with the
Commission or any national securities exchange on which any class of
securities of the Company is listed; and (ii) such additional
information concerning the business and financial condition of the
Company as you may from time to time reasonably request (such
financial statements to be on a consolidated basis to the extent the
accounts of the Company and its subsidiaries are consolidated in
reports furnished to its stockholders generally or to the
Commission);
(g) To use the net proceeds received by it from the sale of the
Securities pursuant to this Agreement in the manner specified in the
Prospectus under the caption "Use of Proceeds";
(h) If the Company elects to rely upon Rule 462(b), the Company
shall file a Rule 462(b) Registration Statement with the Commission
in compliance with Rule 462(b) by 10:00 P.M., Washington, D.C. time,
on the date of this Agreement, and the Company shall at the time of
filing either pay to the Commission the filing fee for the Rule
462(b) Registration Statement or give irrevocable instructions for
the payment of such fee pursuant to Rule 111(b) under the Act; and
(i) Upon request of any Underwriter, to furnish, or cause to be
furnished, to such Underwriter an electronic version of the Company's
trademarks, servicemarks and corporate logo for use on the website,
if any, operated by such Underwriter for the purpose of facilitating
the on-line offering of the Securities (the "License"); provided,
however, that the License shall be used solely for the purpose
described above, is granted without any fee and may not be assigned
or transferred.
6. The Company covenants and agrees with the several Underwriters
that the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Securities under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or producing
any Agreement among Underwriters, this Agreement, the Indenture, the Blue Sky
and legal investment survey, closing documents (including any compilations
thereof) and any other documents in connection with the offering, purchase, sale
and delivery of the Securities; (iii) all expenses in connection with the
qualification of the Securities for offering and sale under state securities
laws as provided in Section 5(b) hereof, including the reasonable fees and
disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky and legal investment survey;
(iv) any fees charged by securities rating services for rating the Securities;
(v) the filing fees incident to, and the reasonable fees and disbursements of
counsel for the Underwriters in connection with, securing any required review by
the National Association of Securities Dealers, Inc. of the terms of the sale of
the Securities; (vi) the cost of preparing the Securities; (vii) the fees and
expenses of the Trustee and any agent of the Trustee and the fees and
disbursements of counsel for the Trustee in connection with the Indenture and
the Securities; and (viii) all other costs and expenses incident to the
8
performance of its obligations hereunder which are not otherwise specifically
provided for in this Section. It is understood, however, that, except as
provided in this Section, and Sections 8 and 11 hereof, the Underwriters will
pay all of their own costs and expenses, including the fees of their counsel,
transfer taxes on resale of any of the Securities by them, and any advertising
expenses connected with any offers they may make.
7. The obligations of the Underwriters hereunder shall be subject, in
their discretion, to the condition that all representations and warranties and
other statements of the Company herein are, at and as of the Time of Delivery,
true and correct, the condition that the Company shall have performed all of its
obligations hereunder theretofore to be performed, and the following additional
conditions:
(a) The Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed
for such filing by the rules and regulations under the Act and in
accordance with Section 5(a) hereof; if the Company has elected to
rely upon Rule 462(b), the Rule 462(b) Registration Statement shall
have become effective by 10:00 P.M., Washington, D.C. time, on the
date of this Agreement; no stop order suspending the effectiveness of
the Registration Statement or any part thereof shall have been issued
and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and all requests for additional
information on the part of the Commission shall have been complied
with to your reasonable satisfaction;
(b) Sullivan & Cromwell LLP, counsel for the Underwriters,
shall have furnished to you such written opinion or opinions (a draft
of each such opinion is attached as Annex II(a) hereto), dated the
Time of Delivery, with respect to such matters as you may reasonably
request, and such counsel shall have received such papers and
information as they may reasonably request to enable them to pass
upon such matters;
(c) Murray L. Simpson, General Counsel of the Company, or, with
respect to paragraph (v), other counsel reasonably satisfactory to
the Representatives, shall have furnished to you such counsel's
written opinion (a draft of which is attached as Annex II(b) hereto),
dated the Time of Delivery, in form and substance satisfactory to
you, to the effect that:
(i) The Company has been duly incorporated under the
laws of the State of Delaware. Each Significant Subsidiary of
the Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of its
jurisdiction of incorporation; and all of the issued shares of
capital stock of each such Significant Subsidiary have been
duly and validly authorized and issued, are fully paid and
non-assessable; all shares of capital stock of each such
Significant Subsidiary (except for directors' qualifying
shares) owned directly or indirectly by the Company, are owned
free and clear of all liens, encumbrances, equities or claims
(such counsel being entitled to rely in respect of the opinion
in this clause upon opinions of local counsel and in respect of
matters of fact upon certificates of officers of the Company or
its Significant Subsidiaries, provided that such counsel shall
state that they believe that both you and they are justified in
relying upon such opinions and certificates);
(ii) The Company has been duly qualified as a foreign
corporation for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it
owns or leases properties or conducts any business so as to
require such qualification, except where the failure of the
Company to be so qualified and be in good standing would not
reasonably be expected to have a Material Adverse Effect (such
9
counsel being entitled to rely in respect of the opinion in
this clause upon opinions of local counsel and in respect of
matters of fact upon certificates of officers of the Company,
provided that such counsel shall state that they believe that
both you and they are justified in relying upon such opinions
and certificates);
(iii) Other than as set forth in the Prospectus, there
are no legal or governmental proceedings pending to which the
Company or any of its subsidiaries is a party or of which any
property of the Company or any of its subsidiaries is the
subject which, if determined adversely to the Company or any of
its subsidiaries, would individually or in the aggregate have a
Material Adverse Effect; and, to the best of such counsel's
knowledge, no such proceedings are threatened or contemplated
by governmental authorities or threatened by others;
(iv) Neither the Company nor any of its Significant
Subsidiaries is in violation of its Certificate of
Incorporation or by-laws or, to such counsel's best knowledge
after due inquiry, except as would not reasonably be expected
to have a Material Adverse Effect, in default in the
performance or observance of any material obligation,
agreement, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement, or lease or agreement
or other instrument to which it is a party or by which it or
any of its properties may be bound; and
(v) The issuance and sale of the Securities and the
compliance by the Company with all of the provisions of the
Securities, the Indenture and this Agreement and the
consummation of the transactions herein and therein
contemplated will not conflict with, constitute a default under
or violate the Bank Holding Company Act of 1956, as amended,
the Gramm-Leach-Blilely Act and the Community Reinvestment Act
and any rules and regulations promulgated thereunder, and any
other laws or regulations relating to the regulation of bank
holding companies and financial holding companies ("Banking
Laws").
(d) Weil, Gotshal & Manges LLP, counsel for the Company, shall
have furnished to you their written opinion (a draft of such opinion
is attached as Annex II(c) hereto), dated the Time of Delivery, in
form and substance satisfactory to you, to the effect that:
(i) The Company is a corporation validly existing and
in good standing under the laws of the State of Delaware and
has all requisite corporate power and authority to own, lease
and operate its properties and to carry on its business as
described in the Prospectus;
(ii) The Company has an authorized capitalization as
set forth in the Prospectus in the column entitled "Actual"
under the caption "Capitalization," and all of the issued and
outstanding shares of capital stock of the Company are duly
authorized, validly issued and are fully paid and
non-assessable;
(iii) This Agreement has been duly authorized,
executed and delivered by the Company;
(iv) The Securities are in the form contemplated by
the Indenture, have been duly authorized by the Company and,
when executed and authenticated in accordance with the
provisions of the Indenture and issued and delivered against
payment of the purchase price therefor (assuming the due
authorization, execution and delivery of the Indenture by the
Trustee), will constitute the legal, valid and binding
obligations of the Company, enforceable against it in
10
accordance with their terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium
and similar laws affecting creditors' rights and remedies
generally, and subject, as to enforceability, to general
principles of equity, including principles of commercial
reasonableness, good faith and fair dealing (regardless of
whether enforcement is sought in a proceeding at law or in
equity) and will be entitled to the benefits provided by the
Indenture;
(v) The Indenture has been duly authorized, executed
and delivered by the Company and (assuming the due
authorization, execution and delivery thereof by the Trustee)
constitutes the legal, valid and binding obligation of the
Company, enforceable against it in accordance with its terms,
subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally, and
subject, as to enforceability, to general principles of equity,
including principles of commercial reasonableness, good faith
and fair dealing (regardless of whether enforcement is sought
in a proceeding at law or in equity) and the Indenture has been
duly qualified under the TIA;
(vi) The issuance and sale of the Securities and the
compliance by the Company with all of the provisions of the
Securities, the Indenture and this Agreement and the
consummation of the transactions herein and therein
contemplated will not conflict with, constitute a default under
or violate (i) any of the terms, conditions or provisions of
the Certificate of Incorporation or by-laws of the Company (ii)
any of the terms, conditions or provisions of any material
document, agreement or other instrument to which the Company or
any of its Significant Subsidiaries is party or by which it is
bound of which we are aware , (iii) New York, Delaware or
federal law or regulation (other than federal and state
securities or blue sky laws, as to which we express no opinion
in this paragraph), or (iv) any judgment, writ, injunction,
decree, order or ruling of any court or governmental authority
binding on the Company or any of its Significant Subsidiaries
of which we are aware;
(vii) No consent, approval, waiver. license or
authorization or other action by or filing with any New York,
Delaware or U.S. Federal government authority is required in
connection with the execution and delivery by the Company of
this Agreement, the consummation by the Company of the
transactions contemplated hereby or the performance by the
Company of its obligations hereunder, except for appropriate
filings and other actions required pursuant to the Act and
other actions required pursuant to federal and state securities
or Blue Sky laws, as to which we express no opinion in this
paragraph;
(viii) The statements in the Prospectus under the
captions "Description of the Notes," "Description of Debt
Securities," "Underwriting", "Plan of Distribution" and "ERISA
Considerations", insofar as such statements constitute
summaries of the legal matters, documents or proceedings
referred to therein, fairly present the information called for
with respect to such legal matters, documents and proceedings
and fairly summarize the matters referred to therein in all
material respects;
(ix) The Company is not an "investment company", as
such term is defined in the Investment Company Act; and the
Company is not required to register as an investment adviser
with the Commission under the Advisers Act;
(x) The Registration Statement and the Prospectus and
any further amendments and supplements thereto made by the
Company prior to the Time of Delivery (other than the financial
11
statements and related schedules therein, as to which such
counsel need express no opinion) comply as to form in all
material respects with the requirements of the Act and the
rules and regulations thereunder; the documents incorporated by
reference in the Prospectus or any further amendment or
supplement thereto made by the Company prior to the Time of
Delivery (other than the financial statements and related
schedules therein, as to which such counsel need express no
opinion), when they became effective or were filed with the
Commission, as the case may be, complied as to form in all
material respects with the requirements of the Act or the
Exchange Act, as applicable and the rules and regulations of
the Commission thereunder;
(xi) Such counsel has participated in conferences with
representatives of the Company, its independent public
accountants, the Underwriters and Underwriters' counsel, at
which conferences the contents of the Registration Statement,
the Prospectus, the documents incorporated by reference therein
(the "Incorporated Documents") and related matters were
discussed. In the course of performing the services referred to
above, no facts have come to the attention of such counsel
which cause such counsel to believe that the Registration
Statement, on the effective date thereof, or any further
amendment thereto made by the Company prior to the Time of
Delivery 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 contained therein not
misleading or that the Prospectus as of its date or any
Incorporated Document, as of the date of its filing with the
Commission, or as of the Time of Delivery, contained or
contains any untrue statement of a material fact or omitted or
omits to state any material fact required to be stated therein
or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading.
In rendering the opinions set forth in paragraphs such
opinions (i) through (x) above, such counsel (A) need not
express any opinion with regard to the application of laws of
any jurisdiction (including the Banking Laws) other than the
Federal law of the United States, the laws of the State of
Delaware and New York and (B) may rely, as to matters of fact,
to the extent they deem proper on representations and
certificates of responsible officers of the Company and
certificates of public officials.
(e) On the date of the Prospectus, at a time prior to the
execution of this Agreement, at 9:30 A.M., New York City time, on the
effective date of any post-effective amendment to the Registration
Statement filed subsequent to the date of this Agreement and also at
the Time of Delivery, PricewaterhouseCoopers LLP shall have furnished
to you a letter or letters, dated the respective dates of delivery
thereof, in form and substance satisfactory to you, to the effect set
forth in Annex I hereto (the executed copy of the letter delivered
prior to the execution of this Agreement is attached as Annex I(a)
hereto and a draft of the form of letter to be delivered on the
effective date of any post-effective amendment to the Registration
Statement and as of each Time of Delivery is attached as Annex I(b)
hereto);
(f)(i) Neither the Company nor any of its subsidiaries shall
have sustained since the date of the latest audited financial
statements included or incorporated by reference in the Prospectus
any loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Prospectus, and
(ii) since the respective dates as of which information is given in
the Prospectus there shall not have been any change in the capital
stock or long-term debt of the Company or any of its subsidiaries or
12
any change, or any development involving a prospective change, in or
affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the
Prospectus, the effect of which, in any such case described in clause
(i) or (ii), is in the judgment of the Representatives so material
and adverse as to make it impracticable or inadvisable to proceed
with the public offering or the delivery of the Securities being
delivered at the Time of Delivery on the terms and in the manner
contemplated in the Prospectus;
(g) On or after the date hereof, (i) the Securities shall be
rated at least A2 by Moody's Investor's Service Inc. and A by
Standard & Poor's Ratings Group, a division of McGraw-Hill, Inc., and
the Company shall have delivered to the Representatives a letter
dated the Time of Delivery, from each such rating agency, or other
evidence satisfactory to the Representatives, confirming that the
Securities have such ratings; (ii) no downgrading shall have occurred
in the rating accorded the Company's debt securities by any
"nationally recognized statistical rating organization", as that term
is defined by the Commission for purposes of Rule 436(g)(2) under the
Act; and (iii) no such organization shall have publicly announced
that it has under surveillance or review, with possible negative
implications, its rating of any of the Company's debt securities;
(h) On or after the date hereof there shall not have occurred
any of the following: (i) a suspension or material limitation in
trading in securities generally on the New York Stock Exchange,
Pacific Exchange or London Stock Exchange (each, an "Exchange"); (ii)
a suspension or material limitation in trading in the Company's
securities on any Exchange; (iii) a general moratorium on commercial
banking activities declared by either United States Federal or New
York or California State authorities or a material disruption in
commercial banking or securities settlement or clearance services in
the United States; (iv) the outbreak or escalation of hostilities
involving the United States or the declaration by the United States
of a national emergency or war; or (v) the occurrence of any other
calamity or crisis or any change in financial, political or economic
conditions in the United States or elsewhere, if the effect of any
such event specified in clause (iv) or (v) in the judgment of the
Representatives makes it impracticable or inadvisable to proceed with
the public offering or the delivery of the Securities on the terms
and in the manner contemplated in the Prospectus;
(i) The Company shall have complied with the provisions of
Section 5(c) hereof with respect to the furnishing of prospectuses on
the New York Business Day next succeeding the date of this Agreement;
and
(j) The Company shall have furnished or caused to be furnished
to you at the Time of Delivery certificates of officers of the
Company, reasonably satisfactory to you as to the accuracy of the
representations and warranties of the Company herein at and as of
such Time of Delivery, as to the performance by the Company of all of
its obligations hereunder to be performed at or prior to such Time of
Delivery, and as to such other matters as you may reasonably request,
and the Company shall have furnished or caused to be furnished
certificates as to the matters set forth in subsections (a) and (f)
of this Section.
8. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement thereto, or arise
13
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each Underwriter for any legal or
other expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration Statement
or the Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
through the Representatives expressly for use therein.
(b) Each Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in any
Preliminary Prospectus, the Registration Statement or the Prospectus or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through the
Representatives expressly for use therein; and will reimburse the Company for
any legal or other expenses reasonably incurred by the Company in connection
with investigating or defending any such action or claim as such expenses are
incurred.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation. No indemnifying party shall, without the
written consent of the indemnified party, effect the settlement or compromise
of, or consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability arising out of such action 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.
14
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
on the other from the offering of the Securities. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law or if the indemnified party failed to give the notice required under
subsection (c) above, then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters on the other shall be deemed to be
in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover page of the Prospectus. The relative fault shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company on the one hand
or the Underwriters on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this subsection (d) were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above in this subsection (d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
in this subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
subsection (d), no Underwriter shall 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 such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations in this subsection (d) to contribute are several in
proportion to their respective underwriting obligations and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company and to each
person, if any, who controls the Company within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase
the Securities which it has agreed to purchase hereunder, you may in your
discretion arrange for you or another party or other parties to purchase such
15
Securities on the terms contained herein. If within thirty-six hours after such
default by any Underwriter you do not arrange for the purchase of such
Securities, then the Company shall be entitled to a further period of thirty-six
hours within which to procure another party or other parties satisfactory to you
to purchase such Securities on such terms. In the event that, within the
respective prescribed periods, you notify the Company that you have so arranged
for the purchase of such Securities, or the Company notifies you that it has so
arranged for the purchase of such Securities, you or the Company shall have the
right to postpone the Time of Delivery for a period of not more than seven days,
in order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus, or in any other documents or
arrangements, and the Company agrees to file promptly any amendments to the
Registration Statement or the Prospectus which in your opinion may thereby be
made necessary. The term "Underwriter" as used in this Agreement shall include
any person substituted under this Section with like effect as if such person had
originally been a party to this Agreement with respect to such Securities.
(b) If, after giving effect to any arrangements for the purchase of
the Securities of a defaulting Underwriter or Underwriters by you and the
Company as provided in subsection (a) above, the aggregate principal amount of
such Securities which remains unpurchased does not exceed one-eleventh of the
aggregate principal amount of all the Securities, then the Company shall have
the right to require each non-defaulting Underwriter to purchase the principal
amount of Securities which such Underwriter agreed to purchase hereunder and, in
addition, to require each non-defaulting Underwriter to purchase its pro rata
share (based on the principal amount of Securities which such Underwriter agreed
to purchase hereunder) of the Securities of such defaulting Underwriter or
Underwriters for which such arrangements have not been made; but nothing herein
shall relieve a defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of
the Securities of a defaulting Underwriter or Underwriters by you and the
Company as provided in subsection (a) above, the aggregate principal amount of
Securities which remains unpurchased exceeds one-eleventh of the aggregate
principal amount of all of the Securities, or if the Company shall not exercise
the right described in subsection (b) above to require non-defaulting
Underwriters to purchase Securities of a defaulting Underwriter or Underwriters,
then this Agreement shall thereupon terminate, without liability on the part of
any non-defaulting Underwriter or the Company, except for the expenses to be
borne by the Company and the Underwriters as provided in Section 6 hereof and
the indemnity and contribution agreements in Section 8 hereof; but nothing
herein shall relieve a defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations,
warranties and other statements of the Company and the several Underwriters, as
set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless of
any investigation (or any statement as to the results thereof) made by or on
behalf of any Underwriter or any controlling person of any Underwriter, or the
Company, or any officer or director or controlling person of the Company, and
shall survive delivery of and payment for the Securities.
11. If this Agreement shall be terminated pursuant to Section 9
hereof, the Company shall not then be under any liability to any Underwriter
except as provided in Sections 6 and 8 hereof; but, if for any other reason, the
Securities are not delivered by or on behalf of the Company as provided herein,
the Company will reimburse the Underwriters through you for all out-of-pocket
expenses approved in writing by you, including fees and disbursements of
counsel, reasonably incurred by the Underwriters in making preparations for the
purchase, sale and delivery of the Securities not so delivered, but the Company
16
shall then be under no further liability to any Underwriter in respect of the
Securities not so delivered except as provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you.
All statements, requests, notices and agreements hereunder shall be
in writing, and if to the Underwriters shall be delivered or sent by mail, telex
or facsimile transmission to you as the Representatives in care of Goldman,
Sachs & Co., 85 Broad Street, New York, New York 10004, Attention: Registration
Department; and if to the Company shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: Secretary; provided, however, that any notice
to an Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by
mail, telex or facsimile transmission to such Underwriter at its address set
forth in its Underwriters' Questionnaire or telex constituting such
Questionnaire, which address will be supplied to the Company by you on request.
Any such statements, requests, notices or agreements shall take effect upon
receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters and the Company and, to the extent provided in
Sections 8 and 10 hereof, the officers and directors of the Company and each
person who controls the Company or any Underwriter, and their respective heirs,
executors, administrators, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement. No purchaser of
any of the Securities from any Underwriter shall be deemed a successor or assign
by reason merely of such purchase.
14. Time shall be of the essence of this Agreement. As used herein,
the term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such respective counterparts shall together constitute one and
the same instrument.
17. The Company is authorized, subject to applicable law, to disclose
any and all aspects of this potential transaction that are necessary to support
any U.S. federal income tax benefits expected to be claimed with respect to such
transaction, and all materials of any kind (including tax opinions and other tax
analyses) related to those benefits, without the Underwriters imposing any
limitation of any kind.
17
If the foregoing is in accordance with your understanding, please
sign and return to us five counterparts hereof, and upon the acceptance hereof
by you, on behalf of each of the Underwriters, this letter and such acceptance
hereof shall constitute a binding agreement among each of the Underwriters and
the Company. It is understood that your acceptance of this letter on behalf of
each of the Underwriters is pursuant to the authority set forth in a form of
Agreement among Underwriters, the form of which shall be submitted to the
Company for examination, upon request, but without warranty on your part as to
the authority of the signers thereof.
Very truly yours,
FRANKLIN RESOURCES, INC.
By: /s/ Kenneth A. Lewis
----------------------------
Name: Kenneth A. Lewis
Title: Vice President
Accepted as of the date hereof:
GOLDMAN, SACHS & CO.
By: /s/ Goldman, Sachs & Co.
-------------------------
(Goldman, Sachs & Co.)
MERRILL LYNCH, PIERCE, FENNER
& SMITH INCORPORATED
By: /s/ David Heaton
---------------------------
Name: David Heaton
Title: Director
On behalf of each of the Underwriters
18
SCHEDULE I
PRINCIPAL
AMOUNT OF
SECURITIES
TO BE
UNDERWRITER PURCHASED
----------- ---------
Goldman, Sachs & Co................................................$168,000,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated................. 168,000,000
Banc of America Securities LLC..................................... 21,000,000
BNY Capital Markets, Inc........................................... 21,000,000
J.P. Morgan Securities Inc......................................... 21,000,000
Salomon Smith Barney Inc........................................... 21,000,000
-------------
Total................................................ $420,000,000
================================================================================
ANNEX I
Pursuant to Section 7(d) of the Underwriting Agreement, the
accountants shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with
respect to the Company and its subsidiaries within the meaning of the
Act and the applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules (and, if
applicable, financial forecasts and/or pro forma financial
information) examined by them and included or incorporated by
reference in the Registration Statement or the Prospectus comply as
to form in all material respects with the applicable accounting
requirements of the Act or the Exchange Act, as applicable, and the
related published rules and regulations thereunder; and, if
applicable, they have made a review in accordance with standards
established by the American Institute of Certified Public Accountants
of the consolidated interim financial statements, selected financial
data, pro forma financial information, financial forecasts and/or
condensed financial statements derived from audited financial
statements of the Company for the periods specified in such letter,
as indicated in their reports thereon, copies of which have been
separately furnished to the representatives of the Underwriters (the
"Representatives");
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants
of the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus and/or included in the Company's quarterly
report on Form 10-Q incorporated by reference into the Prospectus as
indicated in their reports thereon copies of which have been
separately furnished to the Representatives; and on the basis of
specified procedures including inquiries of officials of the Company
who have responsibility for financial and accounting matters
regarding whether the unaudited condensed consolidated financial
statements referred to in paragraph (vi)(A)(i) below comply as to
form in all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the related
published rules and regulations, nothing came to their attention that
caused them to believe that the unaudited condensed consolidated
financial statements do not comply as to form in all material
respects with the applicable accounting requirements of the Act and
the Exchange Act and the related published rules and regulations;
(iv) The unaudited selected financial information with respect
to the consolidated results of operations and financial position of
the Company for the five most recent fiscal years included in the
Prospectus and included or incorporated by reference in Item 6 of the
Company's Annual Report on Form 10-K for the most recent fiscal year
agrees with the corresponding amounts (after restatement where
applicable) in the audited consolidated financial statements for such
five fiscal years which were included or incorporated by reference in
the Company's Annual Reports on Form 10-K for such fiscal years;
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K
and on the basis of limited procedures specified in such letter
nothing came to their attention as a result of the foregoing
procedures that caused them to believe that this information does not
conform in all material respects with the disclosure requirements of
Items 301, 302, 402 and 503(d), respectively, of Regulation S-K;
1
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and
other information referred to below, a reading of the latest
available interim financial statements of the Company and its
subsidiaries, inspection of the minute books of the Company and its
subsidiaries since the date of the latest audited financial
statements included or incorporated by reference in the Prospectus,
inquiries of officials of the Company and its subsidiaries
responsible for financial and accounting matters and such other
inquiries and procedures as may be specified in such letter, nothing
came to their attention that caused them to believe that:
(A) (i) the unaudited condensed consolidated
statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the
Prospectus and/or included or incorporated by reference in the
Company's Quarterly Reports on Form 10-Q incorporated by
reference in the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements
of the Exchange Act as it applies to Form 10-Q and the related
published rules and regulations, or (ii) any material
modifications should be made to the unaudited condensed
consolidated statements of income, consolidated balance sheets
and consolidated statements of cash flows included in the
Prospectus or included in the Company's Quarterly Reports on
Form 10-Q incorporated by reference in the Prospectus, for them
to be conformity with generally accepted accounting principles;
(B) any other unaudited income statement data and
balance sheet items included in the Prospectus do not agree
with the corresponding items in the unaudited consolidated
financial statements from which such data and items were
derived, and any such unaudited data and items were not
determined on a basis substantially consistent with the basis
for the corresponding amounts in the audited consolidated
financial statements included or incorporated by reference in
the Company's Annual Report on Form 10-K for the most recent
fiscal year;
(C) the unaudited financial statements which were not
included in the Prospectus but from which were derived the
unaudited condensed financial statements referred to in clause
(A) and any unaudited income statement data and balance sheet
items included in the Prospectus and referred to in clause (B)
were not determined on a basis substantially consistent with
the basis for the audited financial statements included or
incorporated by reference in the Company's Annual Report on
Form 10-K for the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed
financial statements included or incorporated by reference in
the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the Act
and the published rules and regulations thereunder or the pro
forma adjustments have not been properly applied to the
historical amounts in the compilation of those statements;
(E) as of a specified date not more than five days
prior to the date of such letter, there have been any changes
in the consolidated capital stock (other than issuances of
capital stock upon exercise of options and stock appreciation
rights, upon earn-outs of performance shares and upon
conversions of convertible securities, in each case which were
outstanding on the date of the latest balance sheet included or
incorporated by reference in the Prospectus) or any increase in
the consolidated long-term debt of the Company and its
subsidiaries, or any decreases in consolidated net current
2
assets or stockholders' equity or other items specified by the
Representatives, or any increases in any items specified by the
Representatives, in each case as compared with amounts shown in
the latest balance sheet included or incorporated by reference
in the Prospectus, except in each case for changes, increases
or decreases which the Prospectus discloses have occurred or
may occur or which are described in such letter; and
(F) for the period from the date of the latest
financial statements included or incorporated by reference in
the Prospectus to the specified date referred to in clause (E)
there were any decreases in consolidated net revenues or
operating profit or the total or per share amounts of
consolidated net income or other items specified by the
Representatives, or any increases in any items specified by the
Representatives, in each case as compared with the comparable
period of the preceding year and with any other period of
corresponding length specified by the Representatives, except
in each case for increases or decreases which the Prospectus
discloses have occurred or may occur or which are described in
such letter; and
(vii) In addition to the examination referred to in their
report(s) included or incorporated by reference in the Prospectus and
the limited procedures, inspection of minute books, inquiries and
other procedures referred to in paragraphs (iii) and (vi) above, they
have carried out certain specified procedures, not constituting an
examination in accordance with generally accepted auditing standards,
with respect to certain amounts, percentages and financial
information specified by the Representatives which are derived from
the general accounting records of the Company and its subsidiaries,
which appear in the Prospectus (excluding documents incorporated by
reference) or in Part II of, or in exhibits and schedules to, the
Registration Statement specified by the Representatives or in
documents incorporated by reference in the Prospectus specified by
the Representatives, and have compared certain of such amounts,
percentages and financial information with the accounting records of
the Company and its subsidiaries and have found them to be in
agreement.
3