EXHIBIT 1.01
TRAVELERS GROUP INC.
PREFERRED STOCK AND DEPOSITARY SHARES
UNDERWRITING AGREEMENT BASIC PROVISIONS
May 22, 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.
333-27155), 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 prepared and filed and any such
amendment has become effective. A prospectus supplement (the
"Prospectus Supplement"), including
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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 applicable, and the rules and
regulations of the Commission thereunder.
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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.")
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
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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.
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
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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 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
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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 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
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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
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
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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.
(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
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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 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
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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;
(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
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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 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
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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 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
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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 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,
14
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 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
15
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 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
16
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 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
17
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 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.
18
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 counterparts, each of which shall
constitute an original and all of which taken together shall
constitute one and the same Agreement.
19
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
------------- ----------------
........................... ...........................
........................... ...........................
- ---------------------
* To be completed when the Terms Agreement is executed by the parties thereto.
20
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
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.
21
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)
22
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;
23
(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.
24