Exhibit 1.1
SOUTHERN INVESTMENTS UK PLC
UNDERWRITING AGREEMENT
FOR PURCHASE OF ___% SENIOR NOTES DUE 2006 OF THE COMPANY
Lehman Brothers Inc.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
J.P. Morgan Securities Inc.
c/o Lehman Brothers Inc.
as representative of the
several Underwriters named
in Schedule I hereto
3 World Financial Center
200 Vesey Street
New York, New York 10285
Ladies and Gentlemen:
Southern Investments UK plc, a public limited liability
company incorporated under the Companies Act 1985 in England and Wales
(the "Company"), proposes, subject to the terms and conditions stated
herein, to issue and sell to the Underwriters named in Schedule I (the
"Underwriters") $______________ aggregate principal amount of ___%
Senior Notes due 2006 (the "Senior Notes") of the Company. The Senior
Notes will be issued pursuant to the provisions of an Indenture to be
dated as of _______________, 1996 (the "Indenture") between the
Company and Bankers Trust Company, as Trustee (the "Trustee").
1. Registration Statement and Prospectus: The Company has
prepared and filed with the Securities and Exchange Commission (the
"Commission") in accordance with the provisions of the Securities Act
of 1933, as amended, and the rules and regulations of the Commission
thereunder (collectively, the "Act"), a registration statement on Form
S-1 (Registration No. 333-09033) under the Act (the "registration
statement"), including a prospectus subject to completion relating to
the Senior Notes. The term "Registration Statement" as used in this
Agreement means the registration statement (including all financial
schedules and exhibits), as amended at the time it becomes effective,
or, if the registration statement became effective prior to the
execution of this Agreement, as supplemented or amended prior to the
execution of this Agreement. If it is contemplated, at the time this
Agreement is executed, that a post-effective amendment to the
registration statement will be filed and must be declared effective
before the offering of the Senior Notes may commence, the term
"Registration Statement" as used in this Agreement means the
registration statement as amended by said post-effective amendment.
The term "Prospectus" as used in this Agreement means (a) the
prospectus in the form included in the Registration Statement, (b) if
the prospectus included in the Registration Statement omits
information in reliance on Rule 430A under the Act and such
information is included in a prospectus filed with the Commission
pursuant to Rule 424(b) under the Act, the prospectus in the form
included in the Registration Statement as supplemented by the addition
of the Rule 430A information contained in the prospectus filed with
the Commission pursuant to Rule 424(b), or (c) if the Company relies
on Rule 434 under the Act, the Term Sheet relating to the Senior Notes
that is filed pursuant to Rule 424(b) under the Act together with the
Preliminary Prospectus identified therein that such Term Sheet
supplements. "Term Sheet" means any term sheet that satisfies the
requirements of Rules 434 and 424(b) under the Act. Any reference in
this Agreement to the "date" of a prospectus that includes a Term
Sheet means the date of such Term Sheet. The term "Preliminary
Prospectus" as used in this Agreement means the prospectus subject to
completion in the form included in the registration statement at the
time of the initial public filing of the registration statement with
the Commission, and as such prospectus shall have been amended from
time to time prior to the date of the Prospectus.
2. Purchase and Sale: Upon the basis of the warranties and
representations and on the terms and subject to the conditions herein
set forth, the Company agrees to sell to the respective Underwriters,
severally and not jointly, and the respective Underwriters, severally
and not jointly, agree to purchase from the Company, the respective
principal amounts of Senior Notes set opposite their names in Schedule
I at the purchase price of [ ]% of the principal amount thereof, plus
accrued interest, if any, from __________, 1996.
3. Offering by the Underwriters: The Company has been
advised by you that the Underwriters propose to make a public offering
of their respective portions of the Senior Notes as soon after the
Registration Statement and this Agreement have become effective as in
your judgment is advisable and to offer the Senior Notes upon the
terms set forth in the Prospectus.
4. Payment and Delivery: Payment for the Senior Notes
shall be made to the Company or its order in federal funds or in other
funds which are, as shown by written evidence satisfactory to the
Company, immediately available at the time of purchase, at the office
of [_________________] (or at such other place as may be agreed upon
by you and the Company), upon the delivery of the Senior Notes to you
for the respective accounts of the Underwriters against receipt
therefor signed by you on behalf of yourself and as agent for the
other Underwriters. Such payment and delivery shall be made at 10
a.m. New York Time on ________________ (the "Closing Date") (or at
such other time or on such other day as may be agreed upon by you and
the Company), unless postponed in accordance with the provisions of
Section 9 hereof.
The Senior Notes shall be registered in such name or names
and in such denominations as you may request not later than 10 a.m.
New York Time on at least two business days prior to the Closing Date,
or, if no such request is received, in the names of the respective
Underwriters in denominations selected by the Company. If you shall
request that any of the Senior Notes be registered in a name or names
other than that of the Underwriter agreeing to purchase such Senior
Notes, such Underwriter shall pay any transfer taxes resulting from
such
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request. The Company agrees to make the Senior Notes available
for inspection by you at the office of the Trustee at least 24 hours
prior to the Closing Date. In the event that it becomes necessary to
make initial delivery of the Senior Notes in temporary form, such
Senior Notes will be exchangeable at said office of the Trustee, upon
request, for definitive fully registered Senior Notes of authorized
denominations without charge to the holders thereof as soon as is
reasonably practicable.
5. Conditions of Underwriters' Obligations: The several
obligations of the Underwriters hereunder are subject to the accuracy
of the warranties and representations on the part of the Company
herein contained and to the following other conditions:
(a) That the legal opinions provided for in Sections 5(b)(1)
and (2) hereof shall be satisfactory in form and substance to
Shearman & Sterling, counsel to the Underwriters.
(b) That, at the time of purchase, you shall be furnished
the following opinions and letter and copies or signed
counterparts thereof for each of the Underwriters, with such
changes therein as may be agreed upon by the Company and you:
(1) Opinion of Troutman Sanders LLP, of Atlanta,
Georgia, counsel to the Company, substantially in the form
attached hereto as Exhibit 1.
(2) Opinion of Allen & Overy, of London, England,
substantially in the form attached hereto as Exhibit 2.
(3) Opinion of Shearman & Sterling, of New York, New
York, substantially in the form attached hereto as Exhibit
3.
(4) Opinion of Sewerd & Kissel, of New York, New York,
substantially in the form attached hereto as Exhibit 4.
(5) Letters dated the date hereof from Arthur Andersen
LLP and Ernst & Young, substantially in the forms attached
hereto as Exhibit 5 and Exhibit 6, respectively, and a
letter dated as of the Closing Date from Arthur Andersen
LLP, substantially in the form attached hereto as Exhibit 7.
(c) That no amendment or supplement to the registration
statement or prospectus filed subsequent to the time this
agreement becomes effective shall be unsatisfactory in form to
the Underwriters or shall contain information (other than with
respect to an amendment or supplement relating solely to the
activity of any Underwriter or Underwriters) which, in your
reasonable judgment, shall materially impair the marketability of
the Senior Notes.
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(d) That, prior to the time of purchase, no stop order with
respect to the effectiveness of the Registration Statement shall
have been issued under the Act by the Commission or proceedings
therefor initiated or threatened.
(e) That, prior to the time of purchase, there shall have
been no material adverse change in the business, properties or
financial condition of the Company from that set forth in or
contemplated by the Prospectus, and that the Company shall, at
the time of purchase, have delivered to you a certificate to such
effect of an executive officer of the Company. For the purposes
of this condition, the sale by the Company of, or its failure to
sell, any issue of other securities shall not be deemed to be
such a change.
(f) That the Company shall have performed such of its
obligations under this Agreement as are to be performed at or
prior to the time of purchase by the terms hereof.
6. Certain Covenants of the Company: In further consideration
of the agreements of the Underwriters herein contained, the Company
covenants as follows:
(a) If the Registration Statement has been declared
effective prior to the execution and delivery of this Agreement,
the Company will file with the Commission (i) if the Company
relies on Rule 434 under the Act, a Term Sheet relating to the
Senior Notes, that identifies the Preliminary Prospectus that it
supplements and contains such information as is required or
permitted by Rules 434, 430A and 424(b) under the Act or (2) if
the Company does not rely on Rule 434 under the Act, a prospectus
in the form most recently included in an amendment to such
registration statement (or, if no such amendment shall have been
filed, in such registration statement) with such changes or
insertions as are required or by Rule 430A or permitted by Rule
424(b) under the Act. The Company will advise you promptly of
any such filing pursuant to Rule 424(b).
(b) As soon as the Company is advised thereof, to advise
you and confirm the advice in writing of any request made by the
Commission for amendments to the Registration Statement or
Prospectus, or of the issue of a stop order suspending the
effectiveness of the Registration Statement or of the initiation
or threat of any proceedings for that purpose and, if such a stop
order should be issued by the Commission, to make every
reasonable effort to obtain the lifting or removal thereof as
soon as possible.
(c) To deliver to the Underwriters, without charge during
such period of time (not exceeding nine months after this
agreement becomes effective) as the Underwriters are required by
law to deliver a prospectus, as many copies of the Preliminary
Prospectus and the Prospectus (as supplemented or amended if the
Company shall have made any supplements or amendments thereto) as
you may reasonably request; and, in
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case any Underwriter is required by law to deliver a prospectus
after the expiration of nine months after the date this agreement
becomes effective, to furnish to such Underwriter, upon your
request, at the expense of such Underwriter, a reasonable
quantity of a supplemental prospectus or of supplements to the
Prospectus complying with Section 10(a)(3) of the Securities Act.
(d) During such period of time after the date this
agreement becomes effective as the Underwriters are required by
law to deliver a prospectus, to file timely all documents
required to be filed with the Commission pursuant to Section 13
or 14 of the Exchange Act.
(e) To furnish to you one manually signed copy of the
Registration Statement as initially filed with the Commission and
all amendments thereto (in each case, exclusive of exhibits), and
to furnish to you sufficient plain copies of said registration
statement and all amendments thereto (exclusive of exhibits) for
distribution of two each, and all said documents incorporated
therein as of the time of purchase (exclusive of exhibits) for
distribution of one each, to the other Underwriters.
(f) For such period of time (not exceeding nine months)
after the date this agreement becomes effective as they are
required by law to deliver a prospectus, if any event shall have
occurred as a result of which it is necessary to amend or
supplement the Prospectus in order to make the statements
therein, in light of the circumstances when the Prospectus is
delivered to a purchaser, not misleading, forthwith to amend or
supplement the Prospectus by preparing and furnishing, at its own
expense, to the Underwriters and to dealers (whose names and
addresses are furnished to the Company by you) to whom Senior
Notes may have been sold by you on behalf of the Underwriters
and, upon request, to any other dealers making such request,
either amendments to the Prospectus or supplements thereto so
that the statements in the Prospectus as so amended or
supplemented will not, in the light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading.
(g) To make generally available to the Company's security
holders, as soon as practicable, an earning statement (which need
not be audited) covering a period of at least twelve months
beginning with the first day of the month immediately following
the effective date of the Registration Statement as defined in
Rule 158(c) under the Securities Act, which earning statement
shall satisfy the provisions of Section 11(a) of the Securities
Act.
(h) To cooperate with the Underwriters to qualify the
Senior Notes for offer and sale under the securities or blue sky
laws of such United States jurisdictions as you may reasonably
request and to pay filing fees, reasonable attorneys' fees and
disbursements in connection therewith in an amount not exceeding
$15,000 in the aggregate (including filing fees and disbursements
paid or incurred prior to the date this agreement becomes
effective), provided, however, that the Company shall not be
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required to qualify as a foreign corporation or to file a consent
to service of process or to file annual reports or to comply with
any other requirements deemed by the Company to be unduly
burdensome.
(i) To pay expenses, fees and taxes (other than transfer
taxes) in connection with (1) the preparation and filing of the
Registration Statement, Preliminary Prospectus and Prospectus,
(2) the preparation, execution, filing and recording of the
indenture pursuant to which the Senior Notes are to be issued,
(3) the issue and delivery of the Senior Notes to the
Underwriters, and (4) the furnishing of the opinions, letter and
certificates referred to in Section 5 hereof upon the terms and
in the amounts agreed pursuant to separate agreements; provided,
however, that the Underwriters shall be solely responsible to pay
the fees and expenses of counsel to the Underwriters, and the
Company shall not be liable to reimburse the Underwriters for
such fees and expenses.
(j) If the Underwriters shall not take up and pay for the
Senior Notes due to the failure of the Company to comply with any
of the conditions specified in Section 5 hereof, to reimburse the
Underwriters for their reasonable out-of-pocket expenses, in an
amount not exceeding a total of $10,000, incurred in connection
with the financing contemplated by this Agreement.
7. Warranties of and Indemnity by the Company:
(a) The Company warrants and represents to each of the
Underwriters that:
(i) Each Preliminary Prospectus, when filed with the
Commission, conformed in all material respects to the
requirements of the Act and the Rules and Regulations; and,
when the Registration Statement became or becomes effective
and at all times subsequent thereto up to and including the
Closing Date, the Registration Statement and the Prospectus
and, if any, each amendment and each supplement thereto
conformed, or will conform, in all material respects to the
requirements of the Act and the Rules and Regulations and
the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"); and none of the Registration Statement, nor
any amendment thereto, included or will include 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; and none of the
Prospectus or any Preliminary Prospectus (or any supplement
thereto) as of their respective dates included any untrue
statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances
under which they were made, not misleading; provided,
however, that the Company makes no warranty or
representation to any Underwriter with respect to any
statements or omissions made in reliance upon and in
conformity with information furnished in writing to the
Company by, or through you on behalf
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of, any Underwriter for use in the Registration Statement,
any Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto, or to any statements in or
omissions from that part of the Registration Statement that
shall constitute the Statement of Eligibility and
Qualification under the Trust Indenture Act of 1939, as
amended, of the Trustee under the Indenture.
(ii) The consummation of the transactions herein
contemplated and the performance by the Company of the terms
of this agreement will not violate any of the terms,
conditions or provisions of, or constitute a default under,
any indenture or other material contract or agreement to
which the Company is now a party or the charter or by-laws
of the Company or any order of any court or administrative
agency entered in any proceedings to which the Company is
now a party the violation of which would have a material
adverse effect on the Company's ability to pay the principal
or interest on the Senior Notes.
(b) The Company agrees to indemnify and hold harmless each
of the Underwriters and each person, if any, who controls any
such Underwriter within the meaning of Section 15 of the
Securities Act against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may
become subject under the Securities Act or otherwise, and to
reimburse the Underwriters and such controlling person or
persons, if any, for any legal or other expenses incurred by them
in connection with defending any actions, insofar as such losses,
claims, damages, liabilities or actions arise out of or are based
upon any untrue statement or alleged untrue statement of a
material fact contained in a Preliminary Prospectus (if used
prior to the effective date of the registration statement), or in
the Registration Statement, or in the Prospectus, in the
Prospectus as so amended or supplemented (provided that, if such
Prospectus or such Prospectus as amended or supplemented is used
after the expiration of the period of time specified in Section
6(f) hereof, it shall contain such amendments or supplements as
the Company deems necessary to comply with Section 10(a)(3) of
the Securities Act), or arise out of or are based upon any
omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims,
damages, liabilities or actions arise out of or are based upon
any such untrue statement or omission or alleged untrue statement
or omission which was made in such Registration Statement or
Prospectus in reliance upon and in conformity with information
furnished in writing to the Company by, or through you on behalf
of, any Underwriter for use therein and except that this
indemnity with respect to a Preliminary Prospectus, and with
respect to the Prospectus if the Company shall have furnished any
amendment or supplement thereto, shall not inure to the benefit
of any Underwriter (or of any person controlling such
Underwriter) on account of any losses, claims, damages,
liabilities or actions arising from the sale of Senior Notes to
any person if a copy of the Prospectus, as the same may then be
amended or supplemented, shall not have been sent or given by or
on behalf of such Underwriter to such person with or prior to the
written confirmation of the sale involved. Each Underwriter
agrees, within ten days after the receipt by it of notice of the
commencement of any action in respect of
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which indemnity may be sought by it, or by any person controlling
it, from the Company on account of its agreement contained in
this Section 7(b), to notify the Company in writing of the
commencement thereof, but the omission of such Underwriter so to
notify the Company of any such action shall not release the
Company from any liability which it may have to such Underwriter
or to such controlling person otherwise than on account of the
indemnity agreement contained in this Section 7(b). In case any
such action shall be brought against any Underwriter or any such
person controlling such Underwriter and such Underwriter shall
notify the Company of the commencement thereof, as above
provided, the Company shall be entitled to participate in (and,
to the extent that it shall wish, including the selection of
counsel, to direct) the defense thereof at its own expense. In
case the Company elects to direct such defense and select such
counsel, any Underwriter or controlling person shall have the
right to employ its own counsel, but, in any such case, the fees
and expenses of such counsel shall be at the expense of such
Underwriter or controlling person unless the employment of such
counsel has been authorized in writing by the Company in
connection with defending such action.
The Company's indemnity agreement contained in this Section 7(b),
and its covenants, warranties and representations contained in this
agreement, shall remain in full force and effect regardless of any
investigation made by or on behalf of any Underwriter or controlling
person, and shall survive the delivery of and payment for the Senior
Notes hereunder.
8. Warranties of and Indemnity by Underwriters:
(a) Each Underwriter warrants and represents to the
Company, its directors and such of its officers as shall have
signed the Registration Statement, and to each other Underwriter
that the information furnished in writing to the Company by, or
through you on behalf of, such Underwriter for use in the
Registration Statement, any Preliminary Prospectus or the
Prospectus does not contain an untrue statement of a material
fact and does not omit to state a material fact in connection
with such information required to be stated therein or necessary
to make such information not misleading.
(b) Each Underwriter agrees to indemnify and hold harmless
the Company, its directors and such of its officers as shall have
signed the Registration Statement, and each other Underwriter and
each person, if any, who controls the Company or any such other
Underwriter within the meaning of Section 15 of the Securities
Act, to the same extent and upon the same terms as the indemnity
agreement of the Company set forth in Section 7(b) hereof, but
only with respect to untrue statements or omissions or alleged
untrue statements or omissions made in the Registration
Statement, any Preliminary Prospectus or the Prospectus, or the
Prospectus as amended or supplemented, in reliance upon and in
conformity with information furnished in writing to the Company
by, or through you on behalf of, such Underwriter for use
therein.
The indemnity agreement on the part of each Underwriter contained
in this Section 8(b), and the warranties and representations of such
Underwriter contained in this Agreement, shall
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remain in full force and effect regardless of any investigation made
by or on behalf of the Company or other Underwriter or controlling
person, and shall survive the delivery of and payment for the Senior
Notes hereunder.
9. Substitution of Underwriters: If any Underwriter under this
Agreement shall fail or refuse (whether for some reason sufficient to
justify, in accordance with the terms hereof, the termination of its
obligations to purchase or otherwise) to purchase the principal amount
of the Senior Notes which it has agreed to purchase, the Company shall
immediately notify you and you may, within 24 hours of receipt of such
notice, procure some other responsible party or parties satisfactory
to the Company, who may include one or more of the remaining
Underwriters, to purchase or agree to purchase such principal amount
of the Senior Notes on the terms herein set forth; and, if you shall
fail to procure a satisfactory party or parties to purchase or agree
to purchase such principal amount of the Senior Notes on such terms
within such period after the receipt of such notice, then the Company
shall be entitled to an additional period of 24 hours within which to
procure another party or parties to purchase or agree to purchase such
principal amount of the Senior Notes on the terms herein set forth.
In any such case, either you or the Company shall have the right to
postpone the Closing Date for a period not to exceed five full
business days from the date set forth in Section 4 hereof, in order
that the necessary changes in the Registration Statement and
Prospectus and any other documents and arrangements may be effected.
If you shall fail to procure a satisfactory party or parties to
purchase or agree to purchase such principal amount of the Senior
Notes, and if the Company also does not procure another party or
parties to purchase or agree to purchase such principal amount of the
Senior Notes, as above provided, then this agreement shall terminate.
In the event of any such termination, the Company shall not be under
any liability to any Underwriter (except to the extent, if any,
provided in Section 6(j) hereof), nor shall any Underwriter (other
than a Underwriter who shall have failed or refused to purchase Senior
Notes without some reason sufficient to justify, in accordance with
the terms hereof, its termination of its obligations hereunder) be
under any liability to the Company.
10. Termination of Agreement: This Agreement may be terminated
at any time prior to the time of purchase by you with the consent of
Underwriters who have agreed to purchase in the aggregate 50% or more
of the aggregate principal amount of the Senior Notes, if, after this
agreement becomes effective and prior to the time of purchase, (i)
trading in securities on the New York Stock Exchange shall have been
generally suspended, (ii) minimum or maximum ranges for prices shall
have been generally established on the New York Stock Exchange by the
Commission or by the New York Stock Exchange, (iii) a general banking
moratorium shall have been declared by federal or New York State
authorities or (iv) there shall have occurred any outbreak or
escalation of major hostilities in which the United States is
involved, any declaration of war by the United States Congress or any
other substantial national or international calamity or emergency
affecting the United States, in any such case provided for in clauses
(i) through (iv) with the result that, in your reasonable judgment,
the marketability of the Senior Notes shall have been materially
impaired.
If you elect to terminate this Agreement, as provided in this
Section 10, the Company and
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each other Underwriter shall be notified promptly by you by telephone,
confirmed in writing. If this agreement shall not be carried out by
any Underwriter for any reason permitted hereunder, or if the sale of
the Senior Notes to the Underwriters as herein contemplated shall not
be carried out because the Company is not able to comply with the
terms hereof, the Company shall not be under any obligation under this
agreement and shall not be liable to any Underwriter or to any member
of any selling group for the loss of anticipated profits from the
transactions contemplated by this agreement (except that the Company
shall remain liable to the extent provided in Section 6(j) hereof) and
the Underwriters (other than a defaulting Underwriter) shall be under
no liability to the Company nor be under any liability under this
agreement to one another.
11. Notices: All notices hereunder shall, unless otherwise
expressly permitted, be in writing and be delivered at or mailed to
the following addresses: if to the Underwriters or to you, to you at
[address], and, if to the Company, to the Company at [address].
12. Parties in Interest: The agreement herein set forth has
been and is made solely for the benefit of the Underwriters and the
Company, its directors and such of its officers as shall have signed
the Registration Statement, and the controlling persons, if any,
referred to in Sections 7 and 8 hereof, and their respective
successors, assigns, executors and administrators, and, subject to the
provisions of Section 9 hereof, no other person shall acquire or have
any right under or by virtue of this agreement.
13. Applicable Law, Jurisdiction. This Agreement shall be
governed by and construed in accordance with the laws of the State of
New York, without giving effect to the choice of law or conflict of
law principles thereof. Each party hereto consents to the
jurisdiction of each court in which any action is commenced seeking
indemnity pursuant to Section 7 or 8 above and agrees to accept,
either directly or through an agent, service of process of each such
court.
14. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, and
all of which together shall be deemed to be one and the same
instrument.
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Please confirm that the foregoing correctly sets forth the
agreement between the Company and the several Underwriters.
Very truly yours,
SOUTHERN INVESTMENTS UK
PUBLIC LIMITED COMPANY
By______________________________________
Name:_________________________________
Title:________________________________
Confirmed as of the date
first above mentioned
Lehman Brothers Inc.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
J.P. Morgan Securities Inc.
By: LEHMAN BROTHERS INC.
By:________________________________
Name:_____________________________
Title:____________________________
On behalf of themselves and
the other several Underwriters
named in Schedule I hereto.
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SCHEDULE I
Underwriters
Principal Amount
of the Senior Notes to
be Purchased
Underwriters ------------
------------
Lehman Brothers Inc...................................
Merrill Lynch, Pierce Fenner & Smith Incorporated.....
J.P. Morgan Securities Inc............................
____________
Total Principal Amount................................
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