TRAVELERS GROUP INC.
PREFERRED STOCK AND DEPOSITARY SHARES
UNDERWRITING AGREEMENT BASIC PROVISIONS
May __, 1997
To the Representative or Representatives
named in the Terms Agreement referred
to below
Travelers Group Inc., a Delaware corporation (the "Company"), may issue
and sell from time to time series of its preferred stock, par value $1.00 per
share (the "Preferred Stock"). Such series of Preferred Stock may have varying
designations, denominations, dividend rates and payment dates, conversion,
exchange, redemption or sinking fund provisions, liquidation preferences and
selling prices. The Company may also sell from time to time depositary shares
(the "Depositary Shares") each representing a stated fractional interest in a
share of a series of Preferred Stock. The basic provisions set forth herein are
intended to be incorporated by reference in a terms agreement of the type
referred to in Section 1 hereof relating to the series of Preferred Stock, or
the Depositary Shares, to be issued and sold by the Company pursuant thereto
(the "Firm Securities") to the several underwriters named therein (the
"Underwriters"). The Terms Agreement relating to the Firm Securities (the "Terms
Agreement") may also provide for the Company to issue and sell to the
Underwriters up to a specified additional number of shares of Preferred Stock of
such series, or to sell to the Underwriters up to a specified additional number
of such Depositary Shares (such additional shares of Preferred Stock or
additional Depositary Shares, the "Additional Securities"), upon the terms and
conditions set forth herein and in the Terms Agreement, if and to the extent the
Underwriters determine to exercise their option to purchase such Additional
Securities. The Terms Agreement may also authorize the Underwriters to solicit
institutional investors to purchase Contract Securities (as defined below)
pursuant to delayed delivery contracts ("Delayed Delivery Contracts"). The
shares of Preferred Stock, or the Depositary Shares, to be issued and sold
pursuant to the Terms Agreement (including the Firm Securities, the Additional
Securities, if any, and the Contract Securities (as defined below), if any) are
hereinafter referred to as the "Securities." The Terms Agreement, together with
the provisions hereof incorporated therein by reference, is herein referred to
as this "Agreement."
Depositary Shares will be issued by the Depositary named in the Terms
Agreement pursuant to a Deposit Agreement (the
"Deposit Agreement") to be entered into between the Company and the Depositary,
on behalf of the holders from time to time of the Depositary Shares. The
Depositary Shares will be evidenced by Depositary Receipts issued pursuant to
the Deposit Agreement (the "Depositary Receipts"). The shares of Preferred Stock
relating to the Depositary Shares are hereinafter referred to as the "Underlying
Preferred Shares."
If the Underwriters consist only of the firm or firms referred to in the
Terms Agreement as Representative or Representatives, then the terms
"Underwriters" and "Representatives," as used herein, shall each be deemed to
refer to such firm or firms.
1. Terms Agreement. The obligation of the Underwriters to purchase, and
the Company to sell, the Securities is evidenced by the Terms Agreement
delivered at the time the Company determines to sell the Securities. The Terms
Agreement specifies the firm or firms which will be Underwriters, the number of
shares of the Firm Securities to be purchased by each Underwriter, the number of
shares of the Additional Securities, if any, the purchase price to be paid by
the Underwriters for the Securities, the public offering price, if any, of the
Securities, whether the Underwriters are authorized to solicit institutional
investors to purchase Contract Securities pursuant to Delayed Delivery
Contracts, certain terms thereof and the Underwriters' compensation therefor and
any other terms of the Securities, including, but not limited to, designations,
denominations, dividend rates and payment dates, conversion, exchange,
redemption or sinking fund provisions and liquidation preferences. The Terms
Agreement specifies any details of the terms of the offering that should be
reflected in a post-effective amendment to the Registration Statement or the
Prospectus Supplement (each as hereinafter defined).
2. Representations and Warranties of the Company. The Company represents
and warrants to, and agrees with each Underwriter that:
(a) A registration statement on Form S-3 (File No. 33-_______),
including a prospectus, relating to the Securities and the Underlying
Preferred Shares has been prepared by the Company in conformity in all
material respects with the requirements of the Securities Act of 1933, as
amended (the "Act"), and the rules and regulations (the "Rules and
Regulations") of the Securities and Exchange Commission (the "Commission")
thereunder, and has been filed with the Commission and has become
effective. Such registration statement and prospectus may have been
amended or supplemented from time to time prior to the date of this
Agreement; any such amendment to the registration statement was so
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prepared and filed and any such amendment has become effective. A
prospectus supplement (the "Prospectus Supplement"), including a
prospectus, relating to the Securities and the Underlying Preferred Shares
has been so prepared and will be filed pursuant to Rule 424 under the Act.
Copies of such registration statement and prospectus, any such amendment
or supplement, the Prospectus Supplement and all documents incorporated by
reference therein which were filed with the Commission on or prior to the
date of the Terms Agreement have been delivered to you. Such registration
statement and prospectus, as amended or supplemented to the date of the
Terms Agreement and as supplemented by the Prospectus Supplement, are
herein collectively referred to as the "Registration Statement" and the
"Prospectus", respectively. Any references herein to the Registration
Statement or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein which were filed with the
Commission on or prior to the date of the Terms Agreement, and any
reference to the terms "amend", "amendment" or "supplement" with respect
to the Registration Statement or the Prospectus shall be deemed to refer
to and include the filing of any document with the Commission deemed to be
incorporated by reference therein after the date of the Terms Agreement.
(b) The registration statement, at the time it became effective, any
post-effective amendment thereto, at the time it became effective, the
Registration Statement and the Prospectus, as of the date of the Terms
Agreement and at the Closing Date (as hereinafter defined), and any
amendment or supplement thereto, conformed or will conform in all material
respects to the requirements of the Act and the Rules and Regulations; and
no such document included or will include an untrue statement of a
material fact or omitted or will omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading; except that the foregoing shall not apply to statements in or
omissions from any such document in reliance upon, and in conformity with,
written information furnished to the Company by or on behalf of any
Underwriter through you, specifically for use in the preparation thereof.
(c) The documents incorporated by reference in the Registration
Statement or the Prospectus, when they became effective or were filed with
the Commission, as the case may be, under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), conformed, and any documents so
filed and incorporated by reference after the date of the Terms Agreement
will, when they are filed with the Commission, conform, in all material
respects to the requirements of the Act and the Exchange Act, as
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applicable, and the rules and regulations of the Commission thereunder.
3. Purchase, Sale and Delivery of Securities. If so authorized in the
Terms Agreement, the Underwriters may solicit offers from investors of the types
set forth in the Prospectus to purchase Securities from the Company pursuant to
Delayed Delivery Contracts. Such contracts shall be substantially in the form of
Exhibit I hereto but with such changes therein as the Company may approve.
Securities to be purchased pursuant to Delayed Delivery Contracts are herein
called "Contract Securities." When Delayed Delivery Contracts are authorized in
the Terms Agreement, the Company will enter into a Delayed Delivery Contract in
each case where a sale of Contract Securities arranged through you has been
approved by the Company but, except as the Company may otherwise agree, such
Delayed Delivery Contracts must be for at least the minimum number of shares of
Contract Securities set forth in the Terms Agreement, and the aggregate number
of shares of Contract Securities may not exceed the number set forth in the
Terms Agreement. The Company will advise you not later than 10:00 A.M., New York
City time, on the second full business day preceding the Closing Date (or at
such later time as you may otherwise agree) of the sales of the Contract
Securities which have been so approved. You and the other Underwriters will not
have any responsibility in respect of the validity or performance of Delayed
Delivery Contracts.
The number of shares of the Firm Securities to be purchased by each
Underwriter as set forth in the Terms Agreement shall be reduced by a number
which shall bear the same proportion to the total number of shares of Contract
Securities as the number of shares of Firm Securities set forth opposite the
name of such Underwriter bears to the total number of shares of Firm Securities
set forth in the Terms Agreement, except to the extent that you determine that
such reduction shall be otherwise than in such proportion and so advise the
Company; provided, however, that the total number of shares of Firm Securities
to be purchased by all Underwriters shall be the total number of shares of Firm
Securities set forth in the Terms Agreement less the aggregate number of shares
of Contract Securities.
Payment for the Firm Securities and any Additional Securities shall be
made by wire transfer to such account or accounts specified by the Company of
same-day funds on the date and at the time specified in the Terms Agreement (or
at such other time not later than eight full business days thereafter as you
and the Company determine), such time being herein referred to as the "Firm
Closing Date" or the "Option Closing Date," as the case may be. (The Firm
Closing Date and the Option Closing Date are hereinafter sometimes referred to
as a "Closing Date.")
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Payment for any Firm Securities and Additional Securities that are in the
form of Depositary Shares shall be made against delivery to you on the Firm
Closing Date or the Option Closing Date, as the case may be, for the respective
accounts of the several Underwriters of Depositary Receipts (in either temporary
or definitive form) evidencing such Firm Securities or Additional Securities, as
the case may be, registered in the names and in such denominations as you shall
request upon at least two business days' prior notice to the Company, with any
transfer taxes payable in connection with the transfer thereof to the
Underwriters duly paid.
Certificates for any Firm Securities and Additional Securities that are in
the form of shares of Preferred Stock shall be in definitive form and registered
in the names and in such denominations as you shall request upon at least two
business days' notice to the Company prior to the Firm Closing Date or the
Option Closing Date, as the case may be. The certificates representing such
Securities shall be delivered to you on such Closing Date for the respective
accounts of the several Underwriters, with any transfer taxes payable in
connection with the transfer thereof to the Underwriters duly paid, against
payment of the purchase price therefor.
The certificates representing the Securities will be made available for
checking and packaging at the office at which they are to be delivered on the
Firm Closing Date or the Option Closing Date, as the case may be (or such other
office as may be specified for that purpose in the Terms Agreement), at least
one business day prior to such Closing Date.
The obligations of the Underwriters to purchase the Securities will be
several and not joint. It is understood that the Underwriters propose to offer
the Securities for sale as set forth in the Prospectus.
It is understood that you, acting individually and not in a representative
capacity, may (but shall not be obligated to) make payment to the Company on
behalf of any other Underwriter for Securities to be purchased by such
Underwriter. Any such payment by you shall not relieve any such Underwriter of
any of its obligations hereunder.
The Company will pay to you on the Closing Date for the accounts of the
Underwriters any fee, commission or other compensation specified in the Terms
Agreement. Such payment will be made by wire transfer of same-day funds.
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4. Covenants. The Company covenants and agrees with each Underwriter that:
(a) The Company will cause the Prospectus Supplement to be filed
pursuant to Rule 424 under the Act and will notify you promptly of such
filing. During the period in which a prospectus relating to the Securities
is required to be delivered under the Act, the Company will notify you
promptly of the time when any amendment to the Registration Statement has
become effective or any subsequent supplement to the Prospectus has been
filed and of any request by the Commission for any amendment of or
supplement to the Registration Statement or the Prospectus or for
additional information; it will prepare and file with the Commission,
promptly upon your request, any amendments or supplements to the
Registration Statement or the Prospectus which, in your opinion, may be
necessary or advisable in connection with the distribution of the
Securities by the Underwriters; it will file no amendment or supplement to
the Registration Statement or the Prospectus (other than any prospectus
supplement relating to the offering of securities other than the
Securities registered under the Registration Statement or any document
required to be filed under the Exchange Act which upon filing is deemed to
be incorporated by reference therein) to which you shall reasonably object
by notice to the Company after having been furnished a copy a reasonable
time prior to the filing; and it will furnish to you at or prior to the
filing thereof a copy of any such prospectus supplement or any document
which upon filing is deemed to be incorporated by reference in the
Registration Statement or Prospectus.
(b) The Company will advise you, promptly after it shall receive
notice or obtain knowledge thereof, of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement,
of the suspension of the qualification of the Securities for offering or
sale in any jurisdiction, or of the initiation or threatening of any
proceeding for any such purpose; and it will promptly use its best efforts
to prevent the issuance of any stop order or to obtain its withdrawal if
such a stop order should be issued.
(c) Within the time during which a prospectus relating to the
Securities is required to be delivered under the Act, the Company will
comply with all requirements imposed upon it by the Act, as now and
hereafter amended, and by the Rules and Regulations, as from time to time
in force, so far as necessary to permit the continuance of sales of or
dealings in the Securities as contemplated by the provisions hereof and
the
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Prospectus. If during such period any event occurs 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 a material fact necessary to
make the statements therein, in the light of the circumstances then
existing, not misleading, or if during such period it is necessary to
amend or supplement the Registration Statement or the Prospectus to comply
with the Act, the Company will promptly notify you and will amend or
supplement the Registration Statement or the Prospectus (at the expense of
the Company) so as to correct such statement or omission or effect such
compliance.
(d) The Company will use its best efforts to qualify the Securities
for sale under the securities laws of such jurisdictions as you reasonably
designate, to maintain such qualifications in effect so long as required
for the distribution of the Securities and, if requested by the
Underwriters, to arrange for the determination of the legality of the
Securities for purchase by institutional investors, except that the
Company shall not be required in connection therewith to qualify to do
business in any jurisdiction where it is not now so qualified or to take
any action which would subject it to general or unlimited service of
process in any jurisdiction where it is not now so subject.
(e) The Company will furnish to the Underwriters copies of the
Registration Statement and the Prospectus (including all documents
incorporated by reference therein), and all amendments and supplements to
the Registration Statement or the Prospectus which are filed with the
Commission during the period in which a prospectus relating to the
Securities is required to be delivered under the Act (including all
documents filed with the Commission during such period which are deemed to
be incorporated by reference therein), in each case in such quantities as
you may from time to time reasonably request.
(f) So long as any of the Securities are outstanding, the Company
agrees to furnish to you, upon your request (i) as soon as available,
copies of all reports to the Company's security holders generally and (ii)
all reports and financial statements filed by or on behalf of the Company
with the Commission or any national securities exchange.
(g) The Company will make generally available to its security
holders and to you as soon as practicable, but in any event not later than
15 months after the end of the Company's current fiscal quarter, an
earnings
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statement (which need not be audited) covering a 12-month period beginning
after the date upon which the Prospectus Supplement is filed pursuant to
Rule 424 under the Act, which shall satisfy the provisions of Section
11(a) of the Act.
(h) The Company, whether or not the transactions contemplated
hereunder are consummated or this Agreement is terminated, will pay all
expenses incident to the performance of its obligations hereunder,
including, without limiting the generality of the foregoing, all costs,
taxes and expenses incident to the issue and delivery of the Securities,
all fees and expenses of the Company's counsel and accountants, and all
costs and expenses incident to the preparing, printing, filing and
distributing of all documents relating to the offering, and will reimburse
the Underwriters for any expenses (including fees and disbursements of
counsel not exceeding the amount, if any, specified in the Terms
Agreement) incurred by them in connection with the matters referred to in
Section 4(d) hereof and the preparation of memoranda relating thereto, for
any filing fee of the National Association of Securities Dealers, Inc.
relating to the Securities, and for any fees charged by investment rating
agencies for rating the Securities. If the sale of Securities provided for
in this Agreement is not consummated by reason of any failure, refusal or
inability on the part of the Company to perform any agreement on its part
to be performed, or because any other condition of the Underwriters'
obligations hereunder required to be fulfilled by the Company is not
fulfilled, the Company will reimburse the Underwriters for all reasonable
out-of-pocket disbursements (including fees and disbursements of counsel)
incurred by the Underwriters in connection with the proposed purchase and
sale of the Securities.
(i) If so stated in the Terms Agreement, the Company will use its
best efforts to cause an application for the listing of the Securities on
the New York Stock Exchange or such other securities exchange specified in
the Terms Agreement and for the registration of the Securities under the
Exchange Act to become effective.
(j) The Company will not, without your consent, offer or sell, or
publicly announce its intention to offer or sell, any shares of Preferred
Stock (except under prior contractual commitments) during the period
beginning the date of the Terms Agreement and ending the business day
following the earlier to occur of (i) the later of the Firm Closing Date
or, if applicable, the Option Closing Date and (ii) the expiration of the
period, if any, during which the Underwriters may
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exercise their option to purchase Additional Securities, if such option
has not been exercised.
5. Conditions of the Underwriters' Obligations. The obligations of the
Underwriters to purchase and pay for the Securities as provided therein shall be
subject to the accuracy, as of the date of the Terms Agreement and the Firm
Closing Date or the Option Closing Date, as the case may be (as if made at such
Closing Date), of the representations and warranties of the Company herein, to
the performance by the Company of its obligations hereunder, and to the
following additional conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceeding for that purpose shall
have been instituted or, to the knowledge of the Company or any
Underwriter, threatened by the Commission, and any request of the
Commission for additional information (to be included in the Registration
Statement or the Prospectus or otherwise) shall have been complied with to
your satisfaction.
(b) Subsequent to the execution of the Terms Agreement, there shall
not have occurred (i) any change, or any development involving a
prospective change, in or affecting particularly the business or
properties of the Company or its subsidiaries which, in the judgment of a
majority in interest of the Underwriters, including any Representatives,
materially impairs the investment quality of the Securities; (ii) any
downgrading in the rating of the Company's debt securities by any
"nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Act); (iii) any suspension or limitation
of trading in securities generally on the New York Stock Exchange, or any
setting of minimum prices for trading on such exchange, or any suspension
of trading of any securities of the Company on any exchange or in the
over-the-counter market; (iv) any banking moratorium declared by Federal
or New York authorities; or (v) any outbreak or escalation of major
hostilities in which the United States is involved, any declaration of war
by Congress or any other substantial national or international calamity or
emergency if, in the judgment of a majority in interest of the
Underwriters, including any Representatives, the effect of any such
outbreak, escalation, declaration, calamity or emergency makes it
impractical or inadvisable to proceed with completion of the sale of and
payment for the Securities.
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(c) The Company shall have furnished you the opinion, dated the
Closing Date, of the General Counsel of the Company or such other
counsel to the Company as may be acceptable to you to the effect that:
(i) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware
with corporate power and authority to own its properties and conduct
its business as described in the Prospectus;
(ii) The Company is duly qualified to do business as a foreign
corporation in good standing in all other jurisdictions in which it
owns or leases substantial properties or in which the conduct of its
business requires such qualification and the failure so to qualify
would have a material adverse effect on the Company;
(iii) The authorized capital stock of the Company, the
Securities, the Underlying Preferred Shares, the Depositary Receipts
and the Deposit Agreement conform in all material respects to the
descriptions thereof in the Prospectus;
(iv) The shares of Preferred Stock constituting the Securities
or the Underlying Preferred Shares, as the case may be, have been
validly authorized and, when issued and delivered as contemplated
hereby (and, in the case of any Contract Securities, as contemplated
by the Delayed Delivery Contracts with respect thereto), will be
validly issued, fully paid and non-assessable and will not be
subject to any preemptive or similar rights;
(v) The deposit of the Underlying Preferred Shares by the
Company in accordance with the Deposit Agreement has been duly
authorized and, when the Depositary Receipts representing the
Depositary Shares are issued and delivered as contemplated hereby
(and, in the case of any Contract Securities, as contemplated by the
Delayed Delivery Contracts with respect thereto), the Depositary
Shares will be validly issued, fully paid and non-assessable and
will not be subject to any preemptive or similar rights;
(vi) Assuming due authorization, execution and delivery of any
Deposit Agreement by the Depositary, each Depositary Share
represented by a Depositary Receipt issued thereunder will represent
the interest described in the Prospectus in a
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validly issued, outstanding, fully paid and non-assessable
Underlying Preferred Share; assuming due execution and delivery of
the Depositary Receipts by the Depositary pursuant to the Deposit
Agreement, the Depositary Receipts will entitle the holders thereof
to the benefits provided therein and in the Deposit Agreement;
(vii) The Deposit Agreement has been duly authorized, executed
and delivered by the Company and is a valid and binding agreement of
the Company;
(viii) The Terms Agreement (including the provisions of this
Agreement) and any Delayed Delivery Contracts have been duly
authorized, executed and delivered by the Company;
(ix) No consent, approval, authorization or order of any court
or governmental agency, authority or body is required for the
consummation by the Company of the transactions contemplated herein,
in any Delayed Delivery Contract, in the Certificate of Designation
relating to the series of Preferred Stock constituting the
Securities or to the Underlying Preferred Shares (the "Preferred
Shares Certificate of Designation") or in the Deposit Agreement,
except such as have been obtained under the Act and such as may be
required under the securities or blue sky laws of any jurisdiction
in connection with the sale of the Securities;
(x) The execution, delivery and performance of the Terms
Agreement (including the provisions of this Agreement), any Delayed
Delivery Contracts, the Preferred Shares Certificate of Designation
and the Deposit Agreement and the issuance and sale of the
Securities and compliance with the terms and provisions thereof will
not result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any statute, any rule,
regulation or order of any governmental agency or body or any court
having jurisdiction over the Company or any material subsidiary of
the Company or any of their properties or any agreement or
instrument known to such counsel to which the Company or any
material subsidiary of the Company is a party or by which the
Company or any such subsidiary is bound or to which any of the
properties of the Company or any such subsidiary is subject, or the
charter or by-laws of the Company or any such subsidiary;
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(xi) There are no contracts, agreements or understandings
known to such counsel between the Company and any person granting
such person the right to require the Company to include any
securities in the securities registered pursuant to the Registration
Statement; and
(xii) The Registration Statement has become effective under
the Act and, to the best of the knowledge of such counsel, no stop
order suspending the effectiveness thereof has been issued and no
proceedings for that purpose have been initiated or are pending or
threatened under the Act, and such registration statement, as of its
effective date, the Prospectus as of the date of the Terms Agreement
and the Closing Date and any amendment or supplement thereto, as of
its date and the Closing Date, comply as to form in all material
respects with the requirements of the Act and the Exchange Act and
the applicable Rules and Regulations (except that such counsel need
express no opinion as to the financial statements or other data of a
financial or statistical nature); such counsel has no reason to
believe that such registration statement, as of its effective date,
or the Prospectus, as of the date of the Terms Agreement or the
Closing Date, or any such amendment or supplement, as of its date
and the Closing Date, contained any untrue statement of a material
fact or omitted or omits to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading (except as aforesaid); the descriptions in the
Registration Statement and Prospectus of statutes, legal and
governmental proceedings and contracts and other documents are
accurate and fairly present the information required to be shown;
and such counsel does not know of any legal or governmental
proceedings required to be described in the Prospectus which are not
described as required or of any contracts or documents of a
character required to be described in the Registration Statement or
Prospectus or to be filed as exhibits to the Registration Statement
which are not described and filed as required; it being understood
that such counsel need express no opinion as to the financial
statements or other data of a financial or statistical nature
contained in the Registration Statement or the Prospectus.
(d) You shall have received from your counsel, as specified in the
Terms Agreement, such opinion or opinions, dated the Closing Date, with
respect to the
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issuance and sale of the Securities, the Registration Statement, the
Prospectus and other related matters as you may reasonably require, and
the Company shall have furnished to such counsel such documents as they
reasonably request for the purpose of enabling them to pass upon such
matters.
(e) The Company shall have furnished to you a certificate, dated the
Closing Date, of the Chairman of the Board, President or any Vice
President and of the principal financial or accounting officer of the
Company to the effect that the signers of such certificate have carefully
examined the Registration Statement, the Prospectus and this Agreement and
that:
(i) the representations and warranties of the Company in this
Agreement are true and correct on and as of the Closing Date with
the same effect as if made on the Closing Date, and the Company has
complied in all material respects with all the agreements and
satisfied all the conditions on its part to be performed or
satisfied hereunder at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued, and no proceedings for that
purpose have been instituted or, to their knowledge, threatened;
(iii) the Registration Statement, including any supplements or
amendments thereto, does not contain any untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading; the Prospectus, including any supplements or amendments
thereto, does not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and since
the effective date of the Registration Statement there has not
occurred any event concerning which information is required to be
contained in an amended or supplemented Prospectus concerning which
such information is not contained therein; and
(iv) there have been no material adverse changes in the
general affairs of the Company and its subsidiaries taken as a whole
or in the financial position as shown by information contained in
the Registration Statement and the
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Prospectus, other than changes disclosed in or contemplated by the
Registration Statement and the Prospectus.
(f) You shall have received on the Closing Date a letter from KPMG
Peat Marwick LLP, dated the Closing Date, to the effect set forth in
Exhibit II hereto, with respect to the Registration Statement and the
Prospectus at the time of the Terms Agreement.
(g) Prior to the Closing Date, the Company shall have furnished to
you such further information, certificates and documents as you may
reasonably request.
6. Indemnification and Contribution. (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 the registration statement when it became effective, or
in the Registration Statement, the Prospectus, or any amendment or
supplement thereto, or any related preliminary prospectus supplement, 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; and will reimburse each Underwriter
for any legal or other expenses reasonably incurred by it in connection
with investigating or defending against such loss, claim, damage,
liability or action; 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 therein in reliance
upon and in conformity with written information furnished to the Company
by or on behalf of any underwriter through you, specifically for use in
the preparation thereof; and provided further that the indemnification
contained in this paragraph (a) with respect to any preliminary
prospectus, the prospectus or any preliminary prospectus supplement shall
not inure to the benefit of any Underwriter (or to the benefit of any
person controlling such Underwriter) on account of any such loss, claim,
damage, liability or expense arising from the sale of the Securities by
such Underwriter to any person if a copy of the Prospectus shall not have
been delivered or sent to such person within the time required by the Act
and the Rules and Regulations thereunder, and the untrue statement or
alleged untrue statement or omission or
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alleged omission of a material fact contained in such preliminary
prospectus, prospectus or preliminary prospectus supplement was corrected
in the Prospectus, provided that the Company has delivered the Prospectus
to the several Underwriters in requisite quantity on a timely basis to
permit such delivery or sending.
(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 part of the registration statement when it
became effective, or in the Registration Statement, the Prospectus or any
amendment or supplement thereto, or any related preliminary prospectus
supplement, 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 therein in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of any Underwriter, through you, specifically for
use in the preparation thereof, and will reimburse the Company for any
legal or other expenses reasonably incurred by the Company in connection
with investigating or defending against any such loss, claim, damage,
liability or action.
(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 in 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
indemnified party), and after notice from the indemnifying party to such
indemnified party of its
15
election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any
legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation.
(d) If the indemnification provided for in this Section 6 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute
to the amount paid or payable by such indemnified party as a result of the
losses, claims, damages or liabilities referred to in subsection (a) or
(b) above, (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the
Underwriters on the other from the offering of the Securities, or (ii) if
the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of
the Company on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one
hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Securities
(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
Supplement. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates
to information supplied by the Company or the Underwriters, and the
parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such untrue 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 to be 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 in the first sentence
of this subsection (d). The amount paid by an indemnified party as a
result of the losses, claims, damages or liabilities referred to in the
first sentence of this subsection (d) shall be deemed to include any legal
or other expenses reasonably incurred by such
16
indemnified party in connection with investigating or defending any action
or claim (which shall be limited as provided in subsection (c) above if
the indemnifying party has assumed the defense of any such action in
accordance with the provisions thereof) which is the subject of this
subsection (d). 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 shall
be several in proportion to their respective underwriting obligations and
not joint. Promptly after receipt by an indemnified party under this
subsection (d) of notice of the commencement of any action against such
party in respect of which a claim for contribution may be made against an
indemnifying party under this subsection (d), such indemnified party shall
notify the indemnifying party in writing of the commencement thereof if
the notice specified in subsection (c) above has not been given with
respect to such action; 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 this subsection (d).
(e) The obligations of the Company under this Section 6 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 or the Exchange
Act; and the obligations of the Underwriters under this Section 6 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 director of the Company (including any person who, with his consent,
is named in the Registration Statement as about to become a director of
the Company), to each officer of the Company who has signed the
Registration Statement and to each person, if any, who controls the
Company within the meaning of the Act or the Exchange Act.
7. Representations and Agreements to Survive Delivery. All
representations, warranties and agreements of the Company herein or in
certificates delivered pursuant hereto, and the
17
agreements of the several Underwriters contained in Section 6 hereof, shall
remain operative and in full force and effect regardless of any investigation
made by or on behalf of any Underwriter or any controlling persons, or the
Company or any of its officers, directors or any controlling persons, and shall
survive delivery of and payment for the Securities.
8. Substitution of Underwriters. (a) If any Underwriter or Underwriters
shall fail to take up and pay for the number of shares of the Firm
Securities agreed by such Underwriter or Underwriters to be purchased
hereunder, upon tender of such Securities in accordance with the terms
hereof, and the number of such shares of the Firm Securities not purchased
does not aggregate more than 10% of the total number of shares of the Firm
Securities set forth in the Terms Agreement, the remaining Underwriters
shall be obligated to take up and pay for (in proportion to their
respective underwriting obligations hereunder as set forth in the Terms
Agreement, except as may otherwise be determined by you) the Securities
which the withdrawing or defaulting Underwriters agreed but failed to
purchase.
(b) If any Underwriter or Underwriters shall fail to take up and pay
for the number of shares of the Firm Securities agreed by such Underwriter
or Underwriters to be purchased hereunder, upon tender of such Securities
in accordance with the terms hereof, and the number of such shares of the
Firm Securities not purchased aggregates more than 10% of the total number
of shares of Firm Securities set forth in the Terms Agreement hereto, and
arrangements satisfactory to you and the Company for the purchase of such
Securities by other persons are not made within 36 hours thereafter, this
Agreement shall terminate. In the event of a default by any Underwriter as
set forth in this Section 8, the Closing Date shall be postponed for such
period, not to exceed seven full business days, as you shall determine
in order that the required changes in the Registration Statement and the
Prospectus or in any other documents or arrangements may be effected. In
the event of any such termination, the Company shall not be under any
liability to any Underwriter (except to the extent provided in Section
4(h) and Section 6 hereof) nor shall any Underwriter (other than an
Underwriter who shall have failed, otherwise than for some reason
permitted under this Agreement, to purchase the number of shares of
Securities agreed by such Underwriter to be purchased under this
Agreement) be under any liability to the Company (except to the extent
provided in Section 6 hereof). Nothing contained in this Agreement shall
relieve any defaulting Underwriter of its liability, if any, to the
Company and
18
any non-defaulting Underwriter for damages occasioned by its default
hereunder.
9. Termination. You shall have the right to terminate this Agreement by
giving notice as hereinafter specified at any time at or prior to the Firm
Closing Date or the Option Closing Date, as the case may be, if (i) the Company
shall have failed, refused or been unable, at or prior to the Closing Date, to
perform, in any material respect, any agreement on its part to be performed
hereunder, or (ii) any other condition of the Underwriters' obligations is not
fulfilled in all material respects. Any such termination shall be without
liability of any party to any other party except that the provisions of Section
4(h) and Section 6 shall at all times be effective. If you elect to terminate
this Agreement as provided in this Section, the Company shall be notified
promptly by you by telephone or telegram, confirmed by letter.
10. Notices. All notices or communications hereunder shall be in writing
and, if sent to you, shall be mailed, delivered or telegraphed and confirmed to
you at your address set forth for that purpose in the Terms Agreement, or, if
sent to the Company shall be mailed, delivered or telegraphed and confirmed to
the Company at 388 Greenwich Street, New York, New York 10013, Attention:
Treasurer. Notices to any Underwriter pursuant to Section 6 hereof shall be
mailed, delivered or telegraphed and confirmed to such Underwriter's address
furnished to the Company in writing for the purpose of communications hereunder.
Any party to this Agreement may change such address for notices by sending to
the parties to this Agreement written notice of a new address for such purpose.
11. Parties. This Agreement shall inure to the benefit of and be binding
upon the Company and the Underwriters and their respective successors and the
controlling persons, officers and directors referred to in Section 6 hereof, and
no other person shall have any right or obligation hereunder.
In all dealings with the Company under this Agreement, you shall act on
behalf of each of the several Underwriters, and any action under this Agreement
taken by you or by any one of you designated in the Terms Agreement will be
binding upon all the Underwriters.
12. Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
13. Counterparts. The Terms Agreement may be executed by one or more of
you and the Company in one or more
19
counterparts, each of which shall constitute an original and all of which taken
together shall constitute one and the same Agreement.
20
EXHIBIT I
TRAVELERS GROUP INC.
[Insert specific title of securities*]
DELAYED DELIVERY CONTRACT
[Insert date of initial public offering]*
TRAVELERS GROUP INC.
c/o*
Gentlemen:
The undersigned hereby agrees to purchase from Travelers Group Inc.
(hereinafter called the "Company"), and the Company agrees to sell to the
undersigned, [if one delayed closing, insert--as of the date hereof, for
delivery on _______, 19__ ("Delivery Date")] _____ shares of the Company's
[title of Securities] (the "Securities"), offered by the Company's Prospectus
relating thereto, receipt of a copy of which is hereby acknowledged, at a
purchase price of $........ per share, and on the further terms and conditions
set forth in this contract.
[If two or more delayed closings, insert the following:
The undersigned will purchase from the Company, as of the date hereof, for
delivery on the dates set forth below, the numbers of shares of Securities set
forth below:
Delivery Date Number of Shares
------------- ----------------
...........................
...........................
...........................
...........................
Each of such delivery dates is hereinafter referred to as a Delivery Date.]
Payment for the securities which the undersigned has agreed to purchase
for delivery on [the] [each] Delivery Date shall be made to the Company or its
order by wire transfer of same-day funds (or as otherwise specified in the Terms
- ------------
* To be completed when the Terms Agreement is executed by the parties
thereto.
21
Agreement) at the office of ____ at ____ .M., ____ time, on such Delivery
Date upon delivery to the undersigned of the Securities to be purchased by
the undersigned for delivery on such Delivery Date in [definitive] form and
in such denominations and registered in such names as the undersigned may
designate by written or telegraphic communication addressed to the Company
not less than three full business days prior to such Delivery Date. If no
designation is received, the Securities will be registered in the name of the
undersigned and issued in the denomination equal to the number of shares of
Securities to be purchased by the undersigned on such Delivery Date.
The obligation of the undersigned to take delivery of, and make payment
for, Securities on [the] [each] Delivery Date shall be subject only to the
conditions that (1) investment in the Securities shall not at such Delivery Date
be prohibited under the laws of any jurisdiction in the United States to which
the undersigned is subject, which investment the undersigned represents is not
prohibited on the date hereof, and (2) the Company shall have delivered to the
Underwriters the number of shares of the [Firm] Securities to be purchased by
them pursuant to the Underwriting Agreement referred to in the Prospectus
mentioned above and received payment therefor.
Promptly after completion of the sale to the Underwriters, the Company
will mail or deliver to the undersigned at its address set forth below notice to
such effect, accompanied by a copy of the opinion of counsel for the Company
delivered to the Underwriters in connection therewith.
This contract will inure to the benefit of and be binding upon the parties
hereto and their respective successors, but will not be assignable by either
party hereto without the written consent of the other.
It is understood that the acceptance of this contract and any other
similar contracts is in the Company's sole discretion and, without limiting the
foregoing, need not be on a first-come, first-served basis. If this contract is
acceptable to the Company, it is requested that the Company sign the form of
acceptance below and mail or deliver one of the counterparts hereof to the
undersigned at its address set forth below. This will become a binding contract
between the Company and the undersigned when such counterpart is mailed or
delivered.
22
This contract shall be governed by, and construed in accordance with, the
laws of the State of New York.
Very truly yours,
--------------------------------------
(Name of Purchaser)
By
--------------------------------------
--------------------------------------
(Title of Signatory)
--------------------------------------
--------------------------------------
(Address of Purchaser)
Accepted as of the above date.
TRAVELERS GROUP INC.
By
--------------------------------------
(Title of Signatory)
23
EXHIBIT II
COMFORT LETTER PROVISIONS
(i) They are independent public accountants with respect to the
Company and its subsidiaries within the meaning of the Securities Act of 1933
and the regulations thereunder (the "Act and the Regulations"), and no
information concerning their relationship with or interest in the Company is
required by Item 10 of the Registration Statement.
(ii) In their opinion, the audited financial statements and
supporting schedule(s) examined by them and included or incorporated by
reference in the Registration Statement comply as to form in all material
respects with the applicable accounting requirements of the Act and the
Regulations with respect to registration statements on Form S-3 and the
Securities Exchange Act of 1934, as amended, and the regulations thereunder (the
"Exchange Act and the Exchange Act Regulations").
(iii) They have: (i) performed specified procedures on the latest
incomplete unaudited consolidated financial statements, including a reading
thereof, (ii) performed the procedures specified by the American Institute of
Certified Public Accountants for a review of interim financial information as
described in SAS No. 71, "Interim Financial Information," or any successor
thereto on the unaudited condensed consolidated financial statements included or
incorporated by reference in the Registration Statement, (iii) read the minute
books of the Company through a specified date not more than three business
days prior to the date of such letter, inquired of officials of the Company
responsible for financial and accounting matters and made such other inquiries
and procedures as may be specified in such letter, and on the basis of such
inquiries and procedures nothing came to their attention that caused them
to believe that:
(A) the unaudited condensed consolidated financial statements,
if any, included or incorporated by reference in the Registration
Statement do not comply as to form in all material respects with the
applicable accounting requirements of the Act and the Regulations and the
Exchange Act and Exchange Act Regulations or that any material
modifications should be made to the unaudited condensed consolidated
financial statements for them to be in conformity with generally accepted
accounting principles;
24
(B) at a specified date not more than three business days
prior to the date of such letter, there was any change in common stock,
any decrease in total stockholder's equity or any change in the short-term
or long-term debt of the Company and its consolidated subsidiaries in each
case as compared with amounts included in the most recent consolidated
statement of financial position included or incorporated by reference in
the Registration Statement, except in each case for changes, increases or
decreases disclosed in such letter or in such Registration Statement; or
(C) for the period from the date of the most recent
consolidated statement of income included or incorporated by reference in
the Registration Statement to a specified date not more than three
business days prior to the date of such letter, there was any decrease,
as compared with the corresponding period in the preceding year, in total
revenue, income before taxes and minority interest, or net income except
in each case for increases or decreases disclosed in such letter or in
such Registration Statement.
(iv) In addition to the audit referred to in their report included
or incorporated by reference in the Registration Statement and the Prospectus,
they have carried out certain other specified procedures, not constituting an
audit, with respect to certain amounts, percentages and financial information
which are included or incorporated by reference in the Registration Statement
and the Prospectus and which are specified by the Underwriters, and have found
such amounts, percentages and financial information to be in agreement with the
relevant accounting, financial and other records of the Company and its
subsidiaries identified in such letter.
25