EXHIBIT 1-a
FORM OF
MORGAN STANLEY
UNDERWRITING AGREEMENT
(DEBT SECURITIES, WARRANTS, PURCHASE CONTRACTS AND UNITS)
_____________, 200_
To the Managers named in Schedule I hereto
for the Underwriters named in Schedule II hereto
Ladies and Gentlemen:
Morgan Stanley, a Delaware corporation (the "Company"), proposes to issue
and sell to the underwriters named in Schedule II hereto (the "Underwriters"),
for whom you are acting as managers (the "Managers"), the principal amount of
its debt securities identified in Schedule I hereto (the "Securities"), to be
issued under the indenture specified in Schedule I hereto (the "Indenture")
between the Company and the Trustee identified in such Schedule (the "Trustee").
If the firm or firms listed in Schedule II hereto include only the Managers
listed in Schedule I hereto, then the terms "Underwriters" and "Managers" as
used herein shall each be deemed to refer to such firm or firms.(1)
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement including a prospectus (the file number
of which is set forth in Schedule I hereto) on Form S-3, relating to (a) its
debt securities ("Debt Securities"),(2) (b) warrants to purchase or sell (i)
securities issued by the Company or by an entity affiliated or not affiliated
with the Company, a basket of such securities, an index or indices of such
securities, any other property, (ii) currencies, (iii) commodities or (iv) any
combination of the foregoing (collectively, the "Warrants") and (c) purchase
contracts ("Purchase Contracts") requiring the holders thereof to purchase or
sell (i) securities issued by the Company or by an entity affiliated or not
affiliated with the Company, a basket of such securities, an index or indices of
such securities or any other property, (ii) currencies, (iii) commodities or
(iv) any combination of the above. Any combination of Debt Securities, Purchase
Contracts, Warrants, shares of the Company's preferred stock ("Preferred
Stock"), shares of the Company's common stock, par value $.01 per share ("Common
Stock"), and debt obligations
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(1) This Underwriting Agreement will be modified, as required, for other
Shelf Securities registered by the Registration Statement.
(2) This term includes Debt Securities convertible into the Company's
common stock, par value $0.01 per share (the "Convertible Debt Securities").
Common stock issuable upon conversion are hereafter referred to as the
"Underlying Securities." Specific additional provisions relating to Convertible
Debt Securities will be referenced in footnotes.
issued by an entity affiliated or not affiliated with the Company may be
offered in the form of Units ("Units" and, collectively, the "Shelf
Securities"), including the Securities, to be issued from time to time by the
Company. As used herein, the term "Debt Securities" includes prepaid Purchase
Contracts issued under an indenture. The registration statement as amended to
the date of this Agreement, including the information (if any) deemed to be part
of the registration statement at the time of effectiveness pursuant to Rule 430A
or Rule 430B under the Securities Act of 1933, as amended (the "Securities
Act"), is hereinafter referred to as the "Registration Statement," and the
related prospectus covering the Shelf Securities dated , 200_ in the
form first used to confirm sales of the Securities (or in the form first made
available to the Underwriters by the Company to meet requests of purchasers
pursuant to Rule 173 under the Securities Act) is hereinafter referred to as the
"Basic Prospectus." The Basic Prospectus, as supplemented by the prospectus
supplement specifically relating to the Securities in the form first used to
confirm sales of the Securities (or in the form first made available to the
Underwriters by the Company to meet requests of purchasers pursuant to Rule 173
under the Securities Act) is hereinafter referred to as the " Prospectus," and
the term "preliminary prospectus" means any preliminary form of the Prospectus.
For purposes of this Agreement, "free writing prospectus" has the meaning set
forth in Rule 405 under the Securities Act and "Time of Sale Prospectus" means
the [Basic Prospectus] [the preliminary prospectus] together with the free
writing prospectuses, if any, identified in Schedule I hereto. The term "broadly
available road show" means a "bona fide electronic road show" as defined in Rule
433(h)(5) under the Securities Act that has been made available without
restriction to any person. As used herein, the terms "Registration Statement,"
"Basic Prospectus," "preliminary prospectus," "Time of Sale Prospectus" and
"Prospectus" shall include the documents, if any, incorporated by reference
therein. The terms "supplement," "amendment" and "amend" as used herein with
respect to the Registration Statement, the Basic Prospectus, the Time of Sale
Prospectus, any preliminary prospectus or free writing prospectus shall include
all documents subsequently filed by the Company with the Commission pursuant to
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), that are
deemed to be incorporated by reference therein.
The term "Contract Securities" means the Securities, if any, to be
purchased pursuant to the delayed delivery contracts substantially in the form
of Schedule III hereto, with such changes therein as the Company may approve
(the "Delayed Delivery Contracts"). The term "Underwriters' Securities" means
the Securities other than Contract Securities.
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1. Representations and Warranties. The Company represents and warrants to
and agrees with each of the Underwriters that:
(a) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect; and no
proceedings for such purpose are pending before or threatened by the Commission.
If the Registration Statement is an automatic shelf registration statement as
defined in Rule 405 under the Securities Act, the Company is a well-known
seasoned issuer (as defined in Rule 405 under the Securities Act) eligible to
use the Registration Statement as an automatic shelf registration statement, and
the Company has not received notice that the Commission objects to the use of
the Registration Statement as an automatic shelf registration statement.
(b) (i) Each document, if any, filed or to be filed pursuant to the
Exchange Act and incorporated by reference in the Time of Sale Prospectus or the
Prospectus complied or will comply when so filed in all material respects with
the Exchange Act and the applicable rules and regulations of the Commission
thereunder, (ii) each part of the Registration Statement, when such part became
effective, did not contain and each such part, as amended or supplemented, if
applicable, will 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 not misleading, (iii) the Registration Statement as of the
date hereof 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 not misleading, (iv) the Registration Statement and the
Prospectus comply, and, as amended or supplemented, if applicable, will comply,
in all material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder, (v) the Time of Sale Prospectus does
not, and at the time of each sale of the Securities in connection with the
offering when the Prospectus is not yet available to prospective purchasers and
at the Closing Date (as defined in Section 5), the Time of Sale Prospectus, as
then amended or supplemented by the Company, if applicable, will not, contain
any 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
under which they were made, not misleading, (vi) each broadly available road
show, if any, when considered together with the Time of Sale Prospectus, does
not contain any 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
under which they were made, not misleading and (vii) the Prospectus does not
contain and, as amended or supplemented, if applicable, will not contain any
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 under which
they were made, not misleading, except that the representations and warranties
set forth in this paragraph do not apply to (A) statements or omissions in the
Registration Statement, the Time of Sale Prospectus or the Prospectus based upon
information relating to any Underwriter furnished to the Company in writing by
such Underwriter through the Managers expressly for use therein or (B) those
parts of the Registration Statement that constitute the Statements of
Eligibility (Forms T-1) under the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"), of the trustees referred to in the Registration
Statement.
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(c) The Company is not an "ineligible issuer" in connection with the
offering of Securities pursuant to Rules 164, 405 and 433 under the Securities
Act. Any free writing prospectus that the Company is required to file pursuant
to Rule 433(d) under the Securities Act has been, or will be, filed with the
Commission in accordance with the requirements of the Securities Act and the
applicable rules and regulations of the Commission thereunder. Each free writing
prospectus that the Company has filed, or is required to file, pursuant to Rule
433(d) under the Securities Act or that was prepared by or on behalf of or used
or referred to by the Company complies or will comply in all material respects
with the requirements of the Securities Act and the applicable rules and
regulations of the Commission thereunder. Except for the free writing
prospectuses, if any, identified in Schedule I hereto, and electronic road
shows, if any, each furnished to you before first use, the Company has not
prepared, used or referred to, and will not, without your prior consent,
prepare, use or refer to, any free writing prospectus.
(d) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the State of Delaware, has the
corporate power and authority to own its property and to conduct its business as
described in the Time of Sale Prospectus and is duly qualified to transact
business and is in good standing in each jurisdiction in which the conduct of
its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not have a material adverse effect on the Company and its
consolidated subsidiaries, taken as a whole.
(e) Each subsidiary of the Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the jurisdiction of
its incorporation, has the corporate power and authority to own its property and
to conduct its business as described in the Time of Sale Prospectus and is duly
qualified to transact business and is in good standing in each jurisdiction in
which the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse effect on the
Company and its consolidated subsidiaries, taken as a whole; all of the issued
shares of capital stock of each consolidated subsidiary of the Company have been
duly and validly authorized and issued, are fully paid and non-assessable and
are owned directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims.
(f) This Agreement has been duly authorized, executed and delivered by the
Company.
(g) The Delayed Delivery Contracts, if any, have been duly authorized and,
when executed and delivered by the Company, will be valid and binding agreements
of the Company, enforceable in accordance with their respective terms, subject
to applicable bankruptcy, insolvency and similar laws affecting creditors'
rights generally and equitable principles of general applicability.
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(h) The Indenture has been duly qualified under the Trust Indenture Act,
has been duly authorized, executed and delivered by, and is a valid and binding
agreement of, the Company, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency and similar laws affecting creditors' rights
generally and equitable principles of general applicability.
[(_) The warrant agreement for Warrants (the "Warrant Agreement") has been
duly authorized, executed and delivered by the Company and is a valid and
binding agreement of the Company, enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally and equitable principles of general
applicability.](3)
[(_) The unit agreement for Units (the "Unit Agreement"), if any, has been
duly authorized, executed and delivered by the Company and is a valid and
binding agreement of the Company, enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally and equitable principles of general
applicability.](4)
(i) The Securities have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and delivered
to and paid for [(A)] by the Underwriters in accordance with the terms of this
Agreement, in the case of the Underwriters' Securities, or by institutional
investors in accordance with the terms of the Delayed Delivery Contracts, in the
case of Contract Securities, [and (B) upon exercise of the Warrants to sell Debt
Securities (the "Debt Warrants"(5)) pursuant to the Warrant Agreement, will be
entitled to the benefits of the relevant Indenture and] will be valid and
binding obligations of the Company, in each case enforceable in accordance with
their respective terms, subject to applicable bankruptcy, insolvency and similar
laws affecting creditors' rights generally and equitable principles of general
applicability, and will be entitled to the benefits of the Indenture. (6)
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(3) To replace or supplement Section 1(h) if Warrants are offered. See also
bracketed language below.
(4) To supplement Section 1(h), if Units are offered. See also bracketed
language below.
(5) The term "Debt Warrants" includes Warrants to purchase or sell Debt
Securities that will be issued at a later date.
(6) For issuances of Convertible Debt Securities, add additional
representations and warranties by the Company to the Underwriting Agreement
including, but not limited to: (i) the shares of Common Stock outstanding prior
to the issuance of the Securities have been duly authorized and are validly
issued, fully paid and non-assessable; (ii) the Underlying Securities have been
duly authorized and reserved, and, when issued upon conversion of the
Convertible Debt Securities in accordance with the terms of the Convertible Debt
Securities, will be validly issued, fully paid and non-assessable, and the
issuance of the Underlying Securities will not be subject to any preemptive or
similar rights; and (iii) there are no persons with registration or other
similar rights granted by the Company to require that any of the Company's
equity or debt (Continued...)
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(j) The execution and delivery by the Company of, and the performance by
the Company of its obligations under, this Agreement, the Indenture, the
Securities and the Delayed Delivery Contracts, [any certificate of designation
relating to Preferred Stock filed in connection with the sale of Securities (the
"Certificate of Designation"), the Warrant Agreement and the Unit Agreement,] if
any, will not contravene any provision of applicable law or the certificate of
incorporation or by-laws of the Company or any agreement or other instrument
binding upon the Company or any of its subsidiaries that is material to the
Company and its consolidated subsidiaries, taken as a whole, or any judgment,
order or decree of any governmental body, agency or court having jurisdiction
over the Company or any of its consolidated subsidiaries, and no consent,
approval, authorization or order of, or qualification with, any governmental
body or agency is required for the performance by the Company of its obligations
under this Agreement, the Indenture, the Securities or the Delayed Delivery
Contracts, [the Certificate of Designation, if any, the Warrant Agreement and
the Unit Agreement,] if any, except such as may be required by the securities or
Blue Sky laws of the various states in connection with the offer and sale of the
Securities; provided, however, that no representation is made as to whether the
purchase
the Securities constitutes a "prohibited transaction" under Section 406 of
the Employee Retirement Income Security Act of 1974, as amended, or Section 4975
of the Internal Revenue Code of 1986, as amended.
(k) There has not occurred any material adverse change, or any development
involving a prospective material adverse change, in the condition, financial or
otherwise, or in the earnings, business or operations of the Company and its
subsidiaries, taken as a whole, from that set forth in the Time of Sale
Prospectus.
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(continued...)
of securities be registered for sale under the Registration Statement or
included in the offering, except for such rights as have been duly waived. For
issuances of Units that include Common Stock or Preferred Stock of the Company,
add additional representations and warranties by the Company to the
Underwriting Agreement including, but not limited to: (i) the shares of [Common
Stock/Preferred Stock] issued as part of the Unit have been duly authorized by
the Company and, when such shares are issued and delivered as contemplated by
the terms of this Agreement, such shares will be validly issued, fully paid and
non-assessable, and the issuance of such shares is not subject to any
preemptive or similar rights, (ii) the Common Stock outstanding prior to the
issuance of the Units have been duly authorized by the Company and is validly
issued, fully paid and non-assessable and (iii) there are no persons with
registration or other similar rights granted by the Company to require any of
the Company's equity or debt securities to be registered for sale under the
Registration Statement or included in the offering, except for such rights as
have been duly waived.
Analogous provisions will be added for Warrants exercisable for, or
Purchase Contracts settled by delivery of, Common Stock.
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(l) There are no legal or governmental proceedings pending or threatened to
which the Company or any of its consolidated subsidiaries is a party or to which
any of the properties of the Company or any of its consolidated subsidiaries is
subject (i) other than proceedings accurately described in all material respects
in the Time of Sale Prospectus and proceedings that would not have a material
adverse effect on the Company and its consolidated subsidiaries, taken as a
whole, or on the power or ability of the Company to perform its obligations
under this Agreement, the Indenture or the Securities or to consummate the
transactions contemplated by the Prospectus or (ii) that are required to be
described in the Registration Statement or the Prospectus and are not so
described and there are no statutes, regulations, contracts or other documents
that are required to be described in the Registration Statement or the
Prospectus or to be filed or incorporated by reference as exhibits to the
Registration Statement that are not described, filed or incorporated as
required.
(m) Each preliminary prospectus filed as part of the registration statement
as originally filed or as part of any amendment thereto, or filed pursuant to
Rule 424 under the Securities Act, complied when so filed in all material
respects with the Securities Act and the applicable rules and regulations of the
Commission thereunder.
(n) The Company is not, and after giving effect to the offering and sale of
the Securities and the application of the proceeds thereof as described in the
Prospectus will not be, required to register as an "investment company" as such
term is defined in the Investment Company Act of 1940, as amended.
(o) Each of the Company and its consolidated subsidiaries has all necessary
consents, authorizations, approvals, orders, certificates and permits of and
from, and has made all declarations and filings with, all federal, state, local
and other governmental authorities, all self-regulatory organizations and all
courts and other tribunals, to own, lease, license and use its properties and
assets and to conduct its business in the manner described in the Time of Sale
Prospectus, except to the extent that the failure to obtain or file would not
have a material adverse effect on the Company and its consolidated subsidiaries,
taken as a whole.
(p) Morgan Stanley DW Inc. is registered as a broker-dealer and investment
adviser with the Commission, is registered with the Commodity Futures Trading
Commission as a futures commission merchant and is a member of the New York
Stock Exchange, Inc. and the National Association of Securities Dealers, Inc.
(q) Morgan Stanley & Co. Incorporated is registered as a broker-dealer and
investment adviser with the Commission, is registered with the Commodity Futures
Trading Commission as a futures commission merchant and is a member of the New
York Stock Exchange, Inc. and the National Association of Securities Dealers,
Inc.
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2. Agreements to Sell and Purchase. The Company hereby agrees to sell to
the several Underwriters, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees, severally and not jointly, to purchase from the
Company the respective principal amounts of Securities set forth in Schedule II
hereto opposite its name at the purchase price set forth in Schedule I
hereto.(7)
3. Delayed Delivery Contracts. If the Prospectus provides for sales of
Securities pursuant to Delayed Delivery Contracts, the Company hereby authorizes
the Underwriters to solicit offers to purchase Contract Securities on the terms
and subject to the conditions set forth in the Prospectus pursuant to Delayed
Delivery Contracts. Delayed Delivery Contracts may be entered into only with
institutional investors approved by the Company of the types set forth in the
Prospectus. On the Closing Date, the Company will pay to you as compensation for
the accounts of the Underwriters the commission set forth in Schedule I hereto
in respect of the Contract Securities. The Underwriters will not have any
responsibility in respect of the validity or the performance of any Delayed
Delivery Contracts.
If the Company executes and delivers Delayed Delivery Contracts with
institutional investors, the aggregate principal amount of Securities to be
purchased by the several Underwriters shall be reduced by the aggregate
principal amount of Contract Securities; and such reduction shall be applied to
the commitment of each Underwriter pro rata in proportion to the principal
amount of Securities set forth opposite such Underwriter's name in the Schedule
II hereto, except to the extent that you determine that such reduction shall be
applied in other proportions and so advise the Company; provided that the total
principal amount of Securities to be purchased by all Underwriters shall be the
aggregate principal amount set forth above, less the aggregate principal amount
of Contract securities.
4. Public Offering. The Company is advised by you that the Underwriters
propose to make a public offering of their respective portions of the Securities
as soon after this Agreement has become effective as in your judgment is
advisable. The Company is further advised by you that the Securities are to be
offered to the public upon the terms set forth in the Prospectus.
5. Payment and Delivery. Payment for the Underwriters' Securities shall be
made to the Company in Federal or other funds immediately available in New York
City at the closing time and place set forth in Schedule I hereto, or at such
other time on the same or such other date, not later than the fifth business day
thereafter, as may be designated by you in writing. The time and date of such
payment are hereinafter referred to as the "Closing Date."
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(7) For issuance of Convertible Debt Securities or certain other structured
Securities, a green shoe provision may be added.
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Payment for the Underwriters' Securities shall be made against delivery to
you on the Closing Date for the respective accounts of the several Underwriters
of the Underwriters' Securities registered in such names and in such
denominations as you shall request in writing not less than one full business
day prior to the Closing Date, with any transfer taxes payable in connection
with the transfer of the Underwriters' Securities to the Underwriters duly paid.
Delivery on the Closing Date of any Underwriters' Securities [(i)] that are
Debt Securities in bearer form [or are Units that contain Debt Securities in
bearer form] shall be effected by delivery of a single temporary global Security
without coupons (the "Temporary Global Security") evidencing the Securities that
are or include Debt Securities in bearer form [and (ii) that are Warrants
(including Debt Warrants) in bearer form or are Units that (a) contain Warrants
in bearer form and (b) contain no other Debt Securities in bearer form shall be
effected only by delivery of a single permanent global Warrant (the "Global
Warrant") evidencing the Offered Securities that are or include Warrants in
bearer form, (8) in each case] to a common depositary for Euroclear Bank,
S.A./N.V., as operator of the Euroclear System (the "Euroclear Operator"), and
for Clearstream Banking, societe anonyme ("Clearstream"), for credit to the
respective accounts at the Euroclear Operator or Clearstream of each Underwriter
or to such other accounts as such Underwriter may direct. Any Temporary Global
Security [or Global Warrant] shall be delivered to the Manager not later than
the Closing Date, against payment of funds to the Company in the net amount due
to the Company for such Temporary Global Security [or Global Warrant, as the
case may be,] by the method and in the form set forth herein. The Company shall
cause global and, if applicable, definitive Debt Securities in bearer form to be
prepared and delivered in exchange for such Temporary Global Security in such
manner and at such time as may be provided in or pursuant to the Indenture;
provided, however, that the Temporary Global Security shall be exchangeable for
other Debt Securities in bearer form only on or after the date specified for
such purpose in the Prospectus. [Warrants (including Debt Warrants) in bearer
form shall be evidenced only by a Global Warrant until their expiration.]
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(8) Upon issuance of Warrants in bearer form or Units that contain any such
Warrants, the form of any security issuable upon exercise of any Warrant will be
modified, as necessary, consistent with this paragraph.
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6. Conditions to the Underwriters' Obligations. The several obligations of
the Underwriters are subject to the following conditions:(9)
(a) Subsequent to the execution and delivery of this Agreement and prior to
the Closing Date
(i) there shall not have occurred any downgrading, nor shall any
notice have been given of any intended or potential downgrading or of any
review for a possible change that does not indicate the direction of the
possible change, in the rating accorded the Company or any of the
securities of the Company by any "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule 436(g)(2) under
the Securities Act; and
(ii) there shall not have occurred any change, or any development
involving a prospective change, in the condition, financial or otherwise,
or in the earnings, business or operations of the Company and its
consolidated subsidiaries, taken as a whole, from that set forth in the
Time of Sale Prospectus, that, in your judgment, is material and adverse
and that makes it, in your judgment, impracticable to market the Securities
on the terms and in the manner contemplated in the Time of Sale Prospectus.
(b) The Underwriters shall have received on the Closing Date a certificate,
dated the Closing Date and signed by an executive officer of the Company, to the
effect set forth in Section 6(a)(i) above and to the effect that the
representations and warranties of the Company contained in this Agreement are
true and correct as of the Closing Date and that the Company has complied with
all of the agreements and satisfied all of the conditions on its part to be
performed or satisfied hereunder on or before the Closing Date.
The officer signing and delivering such certificate may rely upon the best
of his or her knowledge as to proceedings threatened.
(c) The Underwriters shall have received on the Closing Date an opinion of
Davis Polk & Wardwell, outside counsel to the Company, or of other counsel
satisfactory to you and who may be an officer of the Company, dated the Closing
Date, to the effect that:
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(9) For issuances of Convertible Debt Securities or Units that include
Common Stock, include condition that "lock-up" agreements, substantially in the
form of Exhibit A hereto, between the Managers and certain executive officers
and directors of the Company relating to sales and certain disposition of shares
of Common Stock or certain other securities, shall be delivered to the Managers
on or before the first date of the public offering of the Securities (the
"Pricing Date"), and shall be in full force and effect on the Closing Date. A
Company "lock-up" provision should be included in the Underwriting Agreement. In
addition, a green shoe provision may be included for issuances of Convertible
Debt Securities or certain other equity-linked Securities.
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(i) the Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the State of Delaware, has
the corporate power and authority to own its property and to conduct its
business as described in the Time of Sale Prospectus and is duly qualified
to transact business and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse effect
on the Company and its consolidated subsidiaries, taken as a whole;
(ii) each of Morgan Stanley DW Inc., Discover Bank, Morgan Stanley &
Co. Incorporated and Morgan Stanley International Holdings Inc. (the
"Material Subsidiaries") has been duly incorporated, is validly existing as
a corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property
and to conduct its business as described in the Time of Sale Prospectus and
is duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that
the failure to be so qualified or be in good standing would not have a
material adverse effect on the Company and its consolidated subsidiaries,
taken as a whole;
(iii) each of the Company and its Material Subsidiaries has all
necessary consents, authorizations, approvals, orders, certificates and
permits of and from, and has made all declarations and filings with, all
federal, state, local and other governmental authorities, all
self-regulatory organizations and all courts and other tribunals, to own,
lease, license and use its properties and assets and to conduct its
business in the manner described in the Time of Sale Prospectus, except to
the extent that the failure to obtain or file would not have a material
adverse effect on the Company and its consolidated subsidiaries, taken as a
whole;
(iv) the Delayed Delivery Contracts, if any, have been duly
authorized, executed and delivered by the Company and are valid and binding
agreements of the Company enforceable in accordance with their respective
terms, subject to applicable bankruptcy, insolvency and similar laws
affecting creditors' rights generally and equitable principles of general
applicability;
(v) the Indenture has been duly qualified under the Trust Indenture
Act and has been duly authorized, executed and delivered by, and is a valid
and binding agreement of, the Company, enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency and similar laws
affecting creditors' rights generally and equitable principles of general
applicability;
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[(_) the Warrant Agreement has been duly authorized, executed and
delivered by the Company and is a valid and binding agreement of the
Company, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors' rights
generally and equitable principles of general applicability;](10)
[(_) the Unit Agreement has been duly authorized, executed and
delivered by the Company and is a valid and binding agreement of the
Company, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors' rights
generally and equitable principles of general applicability;](11)
(vi) the Securities have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture[, the
Warrant Agreement and the Unit Agreement, as the case may be,] and
delivered to and paid for [(A)] by the Underwriters in accordance with the
terms of this Agreement, in the case of the Underwriters' Securities, or by
institutional investors in accordance with the terms of the Delayed
Delivery Contracts, in the case of the Contract Securities and [(B) upon
exercise of the Debt Warrants pursuant to the Warrant Agreement,] will be
entitled to the benefits of the Indenture[, the Warrant Agreement and the
Unit Agreement, as the case may be,] and will be valid and binding
obligations of the Company, in each case enforceable in accordance with
their respective terms, subject to applicable bankruptcy, insolvency and
similar laws affecting creditors' rights generally and equitable principles
of general applicability;(12)
(vii) this Agreement has been duly authorized, executed and delivered
by the Company;
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(10) To replace or supplement Section 6(c)(v), if Warrants are offered.
(11) To supplement Section 6(c)(v), if Units are offered.
(12) For issuance of Convertible Debt Securities, the Underwriting
Agreement will provide that the Managers shall also receive opinions delivered
pursuant to Sections 5(c) and 5(d), as appropriate, to the effect that the
Underlying Securities have been duly authorized and reserved, and, when issued
upon conversion of the Convertible Debt Securities in accordance with the terms
of the Convertible Debt Securities, will be validly issued, fully paid and
non-assessable, and the issuance of the Underlying Securities will not be
subject to any preemptive or similar rights. For issuances of Units that include
Common Stock or Preferred Stock of the Company, the Underwriting Agreement will
provide that the Managers also receive opinions delivered pursuant to Sections
5(c) and 5(d), as appropriate, to the effect that the [Common Stock/Preferred
Stock] issued as part of the Unit have been duly authorized by the Company and,
when such shares are issued and delivered as contemplated by the terms of the
Underwriting Agreement, such shares will be validly issued, fully paid and
non-assessable, and the issuance of such shares is not subject to any preemptive
or similar rights.
12
(viii) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement, the
Indenture, the Securities and the Delayed Delivery Contracts, [the
Certificate of Designation, if any, the Warrant Agreement and the Unit
Agreement,] if any, will not contravene any provision of applicable law or
the certificate of incorporation or by-laws of the Company or, to the best
of such counsel's knowledge, any agreement or other instrument binding upon
the Company or any of its subsidiaries that is material to the Company and
its consolidated subsidiaries, taken as a whole, or, to the best of such
counsel's knowledge, any judgment, order or decree of any governmental
body, agency or court having jurisdiction over the Company or any of its
consolidated subsidiaries, and no consent, approval, authorization or order
of, or qualification with, any governmental body or agency is required for
the performance by the Company of its obligations under this Agreement, the
Indenture, the Securities or the Delayed Delivery Contracts,[ the
Certificate of Designation, if any, the Warrant Agreement and the Unit
Agreement,] if any, except such as may be required by the securities or
Blue Sky laws of the various states in connection with the offer and sale
of the Securities; provided, however, that such counsel need not express an
opinion as to whether the purchase of the Securities constitutes a
"prohibited transaction" under Section 406 of the Employee Retirement
Income Security Act of 1974, as amended, or Section 4975 of the Internal
Revenue Code of 1986, as amended;
(ix) the statements relating to legal matters, documents or
proceedings included in (A) the Time of Sale Prospectus and the Prospectus
under the captions "Description of Debt Securities"[, "Description of
Warrants," "Description of Purchase Contracts," "Description of Units" and
"Description of Capital Stock"] and "Plan of Distribution," (B) the
Registration Statement in Item 15, (C) "Item 3. Legal Proceedings" of the
most recent annual report on Form 10-K incorporated by reference in the
Time of Sale Prospectus and the Prospectus and (D) "Item 1. Legal
Proceedings" of Part II of the quarterly reports on Form 10-Q, if any,
filed since such annual report and incorporated by reference in the Time of
Sale Prospectus and the Prospectus, in each case fairly summarize in all
material respects such matters, documents or proceedings;
(x) after due inquiry, such counsel does not know of any legal or
governmental proceedings pending or threatened to which the Company or any
of its consolidated subsidiaries is a party or to which any of the
properties of the Company or any of its consolidated subsidiaries is
subject that are required to be described in the Registration Statement or
the Prospectus and are not so described or of any statutes, regulations,
contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed or incorporated by
reference as exhibits to the Registration Statement that are not described,
filed or incorporated by reference as required;
13
(xi) the Company is not, and after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as
described in the Prospectus will not be, required to register as, an
"investment company" as such term is defined in the Investment Company Act
of 1940, as amended;
(xii) such counsel is of the opinion ascribed to it in the Prospectus
Supplement under the caption "United States Federal Taxation"; and
(xiii) (A) in the opinion of such counsel (1) each document filed
pursuant to the Exchange Act and incorporated by reference in the
Registration Statement and the Prospectus (except for the financial
statements and financial schedules and other financial and statistical data
included therein, as to which such counsel need not express any opinion)
appeared on its face to be appropriately responsive as of its filing date
in all material respects to the requirements of the Exchange Act and the
applicable rules and regulations of the Commission thereunder and the
Registration Statement and the Prospectus (except for the financial
statements and financial schedules and other financial and statistical data
included therein and except for those parts of the Registration Statement
that constitute the Forms T-1, as to which such counsel need not express
any opinion) appear on their face to be appropriately responsive in all
material respects to the requirements of the Securities Act and the
applicable rules and regulations of the Commission thereunder, and (B)
nothing has come to the attention of such counsel that causes such counsel
to believe that (1) any part of the Registration Statement, when such part
became effective (except for the financial statements and financial
schedules and other financial and statistical data included therein and
except for those parts of the Registration Statement that constitute Forms
T-1, as to which such counsel need not express any belief) contained any
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading, the Registration Statement or the Prospectus (except for
the financial statements and financial schedules and other financial and
statistical data included therein and except for those parts of the
Registration Statement that constitute Forms T-1, as to which such counsel
need not express any belief) on the date of this Agreement, contained any
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading, the Time of Sale Prospectus (except for the financial
statements and financial schedules and other financial and statistical data
included therein, as to which such counsel need not express any belief), as
of the date of this Agreement or as amended or supplemented, if applicable,
as of the Closing Date contains any untrue statement of a material fact or
omits to state a material fact necessary in order to make
14
the statements therein, in the light of the circumstances under which they
were made not misleading or the Prospectus (except for the financial
statements and financial schedules and other financial and statistical data
included therein, as to which such counsel need not express any belief), as
amended or supplemented, if applicable, as of the Closing Date contains any
untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(d) The Underwriters shall have received on the Closing Date an opinion of
Sidley Austin LLP, special counsel for the Underwriters, dated the Closing Date,
covering the matters referred to in Sections 6(c)(iv), 6(c)(v), 6(c)(vi),
6(c)(vii) and 6(c)(ix) (but only as to statements in the Prospectus and the
"Time of Sale Prospectus" under "Description of Debt Securities" ["Description
of Warrants," "Description of Purchase Contracts," "Description of Units" and
"Description of Capital Stock"] and "Plan of Distribution"), and Sections
6(c)(xiii)(A)(2), 6(c)(xiii)(B)(2), 6(c)(xiii)(B)(3) and 6(c)(xiii)(B)(4) above.
With respect to Section 6(c)(xiii) above, if such opinion is given by
counsel who is also an officer of the Company, such counsel may state that his
or her opinion and beliefs are based upon his or her participation, or the
participation of someone under his or her supervision, in the preparation of the
Registration Statement, the Time of Sale Prospectus and the Prospectus and any
amendments or supplements thereto and review and discussion of the contents
thereof, but are without independent check or verification, except as specified.
With respect to Section 6(c)(xiii) above, Sidley Austin LLP and, if Davis Polk &
Wardwell is giving such opinion, Davis Polk & Wardwell (i) may state that their
opinions and beliefs are based upon their participation in the preparation of
the [Registration Statement,] [the Time of Sale Prospectus,] [the Prospectus,]
[the preliminary prospectus supplement,] [the free writing prospectuses
identified as part of the Time of Sale Prospectus in Schedule I hereto,] [the
prospectus supplement] and any amendments or supplements thereto (other than the
documents incorporated by reference) and upon review and discussion of the
contents of the Registration Statement, the Time of Sale Prospectus and the
Prospectus (including documents incorporated by reference), but are without
independent check or verification, except as specified, and (ii) need express no
opinion or belief as to the conveyance of the Time of Sale Prospectus or the
information contained therein to investors.
The opinion of Davis Polk & Wardwell, or any other outside counsel for the
Company, described in Section 6(c) above shall be rendered to the Underwriters
at the request of the Company and shall so state therein.
15
(e) The Underwriters shall have received on the Closing Date(13) a letter,
dated the Closing Date, in form and substance satisfactory to the Managers, from
the Company's independent public accountants, containing statements and
information of the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain financial
information contained in or incorporated by reference into the Registration
Statement, the Time of Sale Prospectus and the Prospectus; provided that each
letter so furnished shall use a "cut-off date" no more than three business days
prior to the date of such letter.
7. Covenants of the Company. The Company covenants with each Underwriter as
follows:
(a) To furnish to you without charge, a signed copy of the Registration
Statement (including exhibits thereto and documents incorporated by reference)
and to deliver to each of the Underwriters during the period mentioned in
Section 7(e) or 7(f) below, as many copies of the Time of Sale Prospectus, the
Prospectus, any documents incorporated therein by reference therein and any
supplements and amendments thereto or to the Registration Statement as you may
reasonably request.
(b) Before amending or supplementing the Registration Statement, the Time
of Sale Prospectus or the Prospectus to furnish to you a copy of each such
proposed amendment or supplement and not to file any such proposed amendment or
supplement to which you reasonably object.
(c) To furnish to you a copy of each proposed free writing prospectus to be
prepared by or on behalf of, used by, or referred to by the Company and not to
use or refer to any proposed free writing prospectus to which you reasonably
object.(14)
(d) Not to take any action that would result in an Underwriter or the
Company being required to file with the Commission pursuant to Rule 433(d) under
the Securities Act a free writing prospectus prepared by or on behalf of the
Underwriter that the Underwriter otherwise would not have been required to file
thereunder.
- ---------------------------------
(13) For issuance of Convertible Debt Securities or Units that include
Common Stock or Preferred Stock, the Manger shall receive on the date of the
Underwriting Agreement, in addition to the Closing Date, a "comfort letter" from
the Company's independent auditors.
(14) Note this covers all free writing prospectuses including electronic
road shows.
16
(e) If the Time of Sale Prospectus is being used to solicit offers to buy
Securities at a time when the Prospectus is not yet available to prospective
purchasers and any event shall occur or condition exist as a result of which it
is necessary to amend or supplement the Time of Sale Prospectus in order to make
the statements therein, in the light of the circumstances, not misleading, or if
any event shall occur or condition exist as a result of which the Time of Sale
Prospectus conflicts with the information contained in the Registration
Statement then on file, or if, in the opinion of counsel for the Underwriters,
it is necessary to amend or supplement the Time of Sale Prospectus to comply
with applicable law, forthwith to prepare, file with the Commission and furnish,
at the Company's own expense, to the Underwriters and to any dealer upon
request, either amendments or supplements to the Time of Sale Prospectus so that
the statements in the Time of Sale Prospectus as so amended or supplemented will
not, in the light of the circumstances when delivered to a prospective
purchaser, be misleading or so that the Time of Sale Prospectus, as amended or
supplemented, will no longer conflict with the Registration Statement, or so
that the Time of Sale Prospectus, as amended or supplemented, will comply with
applicable law.
(f) If, during such period after the first date of the public offering of
the Securities as in the opinion of counsel for the Underwriters the Prospectus
(or in lieu thereof the notice referred to in Rule 173(a) under the Securities
Act) is required by law to be delivered in connection with sales by an
Underwriter or dealer, any event shall occur or condition exist as a result of
which it is necessary to amend or supplement the Prospectus in order to make the
statements therein, in the light of the circumstances when the Prospectus (or in
lieu thereof the notice referred to in Rule 173(a) under the Securities Act) is
delivered to a purchaser, not misleading, or if, in the opinion of counsel for
the Underwriters, it is necessary to amend or supplement the Prospectus to
comply with applicable law, forthwith to prepare, file with the Commission and
furnish, at the Company's own expense, to the Underwriters and to the dealers
(whose names and addresses you will furnish to the Company) to which Securities
may have been sold by you on behalf of the Underwriters and to any other dealers
upon request, either amendments or supplements to the Prospectus so that the
statements in the Prospectus as so amended or supplemented will not, in the
light of the circumstances when the Prospectus (or in lieu thereof the notice
referred to in Rule 173(a) under the Securities Act) is delivered to a
purchaser, be misleading or so that the Prospectus, as amended or supplemented,
will comply with applicable law.
(g) To endeavor to qualify the Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall reasonably
request.
(h) To make generally available to the Company's security holders and to
you as soon as practicable an earning statement covering a period of at least
twelve months beginning with the first fiscal quarter of the Company occurring
after the date of this Agreement, which shall satisfy the provisions of Section
11(a) of the Securities Act and the rules and regulations of the Commission
thereunder.
17
(i) Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
expenses incident to the performance of its obligations under this Agreement,
including: (i) the fees, disbursements and expenses of the Company's counsel and
the Company's accountants in connection with the registration and delivery of
the Securities under the Securities Act and all other fees or expenses in
connection with the preparation and filing of the Registration Statement, any
preliminary prospectus, the Time of Sale Prospectus, the Prospectus, any free
writing prospectus prepared by or on behalf of, used by, or referred to by the
Company and amendments and supplements to any of the foregoing, including the
filing fees payable to the Commission relating to the Securities (within the
time required by Rule 456 (b)(1), if applicable), all printing costs associated
therewith, and the mailing and delivering of copies thereof to the Underwriters
and dealers, in the quantities hereinabove specified, (ii) all costs and
expenses related to the transfer and delivery of the Securities to the
Underwriters, including any transfer or other taxes payable thereon, (iii) the
cost of printing or producing any Blue Sky or legal investment memorandum in
connection with the offer and sale of the Securities under state securities laws
and all expenses in connection with the qualification of the Securities for
offer and sale under state securities laws as provided in Section 7(g) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriters in connection with such qualification and in connection with
the Blue Sky or legal investment memorandum, (iv) all filing fees and the
reasonable fees and disbursements of counsel to the Underwriters incurred in
connection with the review and qualification of the offering of the Securities
by the National Association of Securities Dealers, Inc., (v) any fees charged by
the rating agencies for the rating of the Securities, [(vi) all fees and
expenses in connection with the preparation and filing of the registration
statement on Form 8-A relating to the Securities and all costs and expenses
incident to listing the Securities on [the NYSE/AMEX/the NASDAQ National Market]
[and other national securities exchanges and foreign stock exchanges], (vii) the
cost of the preparation, issuance and delivery of the Securities, (viii) the
costs and charges of any trustee, transfer agent, registrar or depositary, (ix)
the costs and expenses of the Company relating to investor presentations on any
"road show" undertaken in connection with the marketing of the offering of the
Securities, including, without limitation, expenses associated with the
preparation or dissemination of any electronic road show, expenses associated
with the production of road show slides and graphics, fees and expenses of any
consultants engaged in connection with the road show presentations with the
prior approval of the Company, travel and lodging expenses of the
representatives and officers of the Company and any such consultants, and the
cost of any aircraft chartered in connection with the road show, (x) the
document production charges and expenses associated with printing this Agreement
and (xi) all other costs and expenses incident to the performance of the
obligations of the Company hereunder for which provision is not otherwise made
in this Section. It is understood, however, that except as provided in this
Section, Section 9 entitled "Indemnity and Contribution," and the last paragraph
18
of Section 11 below, the Underwriters will pay all of their costs and expenses,
including fees and disbursements of their counsel, transfer taxes payable on
resale of any of the Securities by them and any advertising expenses connected
with any offers they may make.
(j) If the third anniversary of the initial effective date of the
Registration Statement occurs before all the Securities have been sold by the
Underwriters, prior to the third anniversary to file a new shelf registration
statement and to take any other action necessary to permit the public offering
of the Securities to continue without interruption; references herein to the
Registration Statement shall include the new registration statement declared
effective by the Commission.
(k) During the period beginning on the date hereof and continuing to and
including the Closing Date, not to offer, sell, contract to sell or otherwise
dispose of any debt securities of the Company, warrants to purchase or otherwise
acquire debt securities of the Company, warrants, purchase contracts or units
substantially similar to the Securities (other than (i) the Securities, (ii)
commercial paper issued in the ordinary course of business or (iii) securities
or warrants permitted with the prior written consent of the Manager identified
in Schedule I with the authorization to release this lock-up on behalf of the
Underwriters).(15)
(l) To prepare, if the Managers so request, a final term sheet relating to
the offering of the Securities, containing only information that describes the
final terms of the Securities or the offering in a form consented to by you, and
to file such final term sheet within the period required by Rule 433(d)(5)(ii)
under the Securities Act following the date the final terms have been
established for the offering of the Securities.
8. Covenants of the Underwriters. (a) Each of the several Underwriters
represents and agrees with the Company that:
(i) it will not take any action that would result in the Company being
required to file with the Commission under Rule 433(d) a free writing
prospectus prepared by or on behalf of such Underwriter that otherwise
would not be required to be filed by the Company thereunder, but for the
action of the Underwriter;
(ii) except to the extent permitted under U.S. Treas. Reg. Section
1.163-5(c)(2)(i)(D) (the "D Rules"), (i) it has not offered or sold, and
during the restricted period will not offer or sell, Debt Securities in
bearer form (including any Debt Security in global form that is
exchangeable for Securities in bearer form) to a person who is within the
- ---------------------------------
(15) For issuances of Convertible Debt Securities that include Common
Stock, and certain other equity-linked products, add reference to lock-up.
19
United States or its possessions or to or for the account of a United
States person and (ii) it has not delivered and will not deliver within the
United States or its possessions definitive Debt Securities in bearer form
that are sold during the restricted period;
(iii) it has, and throughout the restricted period will have, in
effect procedures reasonably designed to ensure that its employees or
agents who are directly engaged in selling Debt Securities in bearer form
are aware that such Debt Securities may not be offered or sold during the
restricted period to a person who is within the United States or its
possessions or to a United States person, except as permitted by the D
Rules;
(iv) if it is a United States person, it is acquiring the Debt
Securities in bearer form for purposes of resale in connection with their
original issuance and if it retains Debt Securities in bearer form for its
own account, it will only do so in accordance with the requirements of U.S.
Treas. Reg. Section 1.163-5(c)(2)(i)(D)(6);
(v) if it transfers to any affiliate Debt Securities in bearer form
for the purpose of offering or selling such Debt Securities during the
restricted period, it will either (a) obtain from such affiliate for the
benefit of the Company the representations and agreements contained in
Section 8(a)(ii), 8(a)(iii) and 8(a)(iv) or (b) repeat and confirm the
representations and agreements contained in Section 8(a)(ii), 8(a)(iii) and
8(a)(iv) on such affiliate's behalf and obtain from such affiliate the
authority to so obligate it;
(vi) it will obtain for the benefit of the Company the representations
and agreements contained in Section 8(a)(ii), 8(a)(iii), 8(a)(iv) and
8(a)(v) above from any person other than its affiliate with whom it enters
into a written contract, as defined in U.S. Treas. Reg. Section
1.163-5(c)(2)(i)(D)(4) for the offer or sale during the restricted period
of Debt Securities in bearer form; and
(vii) it will comply with or observe any other restrictions or
limitations set forth in the Prospectus on persons to whom, or the
jurisdictions in which, or the manner in which, the Debt Securities may be
offered, sold, resold or delivered.
The restricted period is defined at U.S. Treas. Reg. Section
1.163-5(c)(2)(i)(D)(7). The term "Debt Securities in bearer form," as used in
the preceding paragraph, includes Units containing Debt Securities in bearer
form. All other terms used in the preceding paragraph have the meaning given to
them by the U.S. Internal Revenue Code and regulations thereunder, including the
D Rules.
20
(b) Each of the several Underwriters represents and agrees with the Company
that:
(i) except to the extent permitted under the D Rules, (i) it has not
offered, sold or delivered Debt Warrants in bearer form to a person who is
within the United States or its possessions or to or for the account of a
United States person and (ii) it will not offer, sell or deliver Debt
Warrants in bearer form at any time to a person who is within the United
States or its possessions or to a United States person;
(ii) it has in effect procedures reasonably designed to ensure that
its employees or agents who are directly engaged in selling Debt Warrants
in bearer form are aware that such Debt Warrants may not be offered or sold
at any time to a person who is within the United States or its possessions
or to a United States person, except as permitted by the D Rules;
(iii) if it is a United States person, it is acquiring the Debt
Warrants in bearer form for purposes of resale in connection with their
original issuance and if it retains Debt Warrants in bearer form for its
own account, it will only do so in accordance with the requirements of U.S.
Treas. Reg. Section 1.163-5(c)(2)(i)(D)(6);
(iv) if it transfers to any affiliate Debt Warrants in bearer form for
the purpose of offering or selling such Debt Warrants, it will either (a)
obtain from such affiliate for the benefit of the Company the
representations and agreements contained in Section 8(b)(i), 8(b)(ii) and
8(b)(iii) or (b) repeat and confirm the representations and agreements
contained in Section 8(b)(i), 8(b)(ii) and 8(b)(iii) on such affiliate's
behalf and obtain from such affiliate the authority to so obligate it;
(v) it will obtain for the benefit of the Company the representations
and agreements contained in Section 8(b)(i), 8(b)(ii), and 8(b)(iii) from
any person other than its affiliate with whom it enters into a written
contract, as defined in U.S. Treas. Reg. Section 1.163-5(c)(2)(i)(D)(4) for
the offer or sale of Debt Warrants in bearer form; and
(vi) it will comply with or observe any other restrictions or
limitations set forth in the Prospectus on persons to whom, or the
jurisdictions in which, or the manner in which, the Debt Warrants may be
offered, sold, resold or delivered.
As used in the preceding paragraph, the term "Debt Warrants in bearer form"
includes Units containing Debt Warrants in bearer form. All other terms used in
the preceding paragraph have the meaning given to them by the U.S. Internal
Revenue Code and regulations thereunder, including the D Rules. [subject to DPW
tax review]
21
9. Indemnification and Contribution. The Company agrees to indemnify and
hold harmless each Underwriter, each person, if any, who controls any
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act and each affiliate of any Underwriter within the
meaning of Rule 405 under the Securities Act from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or any amendment thereof, any preliminary prospectus, the Time of Sale
Prospectus, any issuer free writing prospectus as defined in Rule 433(h) under
the Securities Act, any Company information that the Company has filed, or is
required to file, pursuant to Rule 433(d) under the Securities Act, or the
Prospectus or any amendment or supplement thereto, or caused by 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 or liabilities are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon
information relating to any Underwriter furnished to the Company in writing by
such Underwriter through you expressly for use therein.
(b) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers who sign the Registration
Statement and each person, if any, who controls the Company within the meaning
of either Section 15 of the Securities Act or Section 20 of the Exchange Act to
the same extent as the foregoing indemnity from the Company to such Underwriter,
but only with reference to information relating to such Underwriter furnished to
the Company in writing by such Underwriter through you expressly for use in the
Registration Statement, any preliminary prospectus, the Time of Sale Prospectus,
any issuer free writing prospectus or the Prospectus or any amendment or
supplement thereto.
(c) In case any proceeding (including any governmental investigation) shall
be instituted involving any person in respect of which indemnity may be sought
pursuant to Section 9(a) or 9(b), such person (the "indemnified party") shall
promptly notify the person against whom such indemnity may be sought (the
"indemnifying party") in writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the
22
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them. It
is understood that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the fees and expenses of
more than one separate firm (in addition to any local counsel) for all such
indemnified parties and that all such fees and expenses shall be reimbursed as
they are incurred. Such firm shall be designated in writing by the Manager
authorized to appoint counsel under this Section 9 as set forth in Schedule I
hereto, in the case of parties indemnified pursuant to Section 9(a), and by the
Company, in the case of parties indemnified pursuant to Section 9(b). The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment. Notwithstanding the foregoing sentence, if at
any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as contemplated
by the second and third sentences of this paragraph, the indemnifying party
agrees that it shall be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered into more than 30
days after receipt by such indemnifying party of the aforesaid request and (ii)
such indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened proceeding in respect
of which any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all liability
on claims that are the subject matter of such proceeding.
(d) To the extent the indemnification provided for in Section 9(a) or 9(b)
is unavailable to an indemnified party or insufficient in respect of any losses,
claims, damages or liabilities referred to therein, then each indemnifying party
under such paragraph, in lieu of indemnifying such indemnified party thereunder,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities 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 hand from the offering of the Securities
or (ii) if the allocation provided by clause 9(d)(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 9(d)(i) above but also the relative
fault of the Company on the one hand and the Underwriters on the other hand in
connection with the statements or omissions that 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 hand in connection with the offering of the
Securities shall be deemed to be
23
in the same respective proportions as the net proceeds from the offering of the
Securities (before deducting expenses) received by the Company and the total
underwriting discounts and commissions received by the Underwriters bear to the
aggregate initial public offering price of the Securities as set forth in the
Prospectus. The relative fault of the Company on the one hand and of the
Underwriters on the other hand shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Underwriters' respective obligations to contribute
pursuant to this Section 9 are several in proportion to the respective principal
amounts of Securities they have purchased hereunder, and not joint.
(e) The Company and the Underwriters agree that it would not be just or
equitable if contribution pursuant to this Section 9 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in Section 9(d). The amount paid or payable
by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in Section 9(d) shall be deemed to include, subject to
the limitations set forth above, any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 9, 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 that 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 Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The remedies provided
for in this Section 9 are not exclusive and shall not limit any rights or
remedies which may otherwise be available to any indemnified party at law or in
equity.
(f) The indemnity and contribution provisions contained in this Section 9
and the representations, warranties and other statements of the Company
contained in this Agreement shall remain operative and in full force and effect,
regardless of (i) any termination of this Agreement, (ii) any investigation made
by or on behalf of any Underwriter, any person controlling any Underwriter or
any affiliate of any Underwriter or by or on behalf of the Company, its officers
or directors or any person controlling the Company and (iii) acceptance of and
payment for any of the Securities.
10. Termination. The Underwriters may terminate this Agreement by notice
given by you to the Company if, after the execution and delivery of this
Agreement and prior to the Closing Date (i) trading generally shall have been
24
suspended or materially limited on or by, as the case may be, any of the New
York Stock Exchange, the American Stock Exchange, the Nasdaq National Market,
the Chicago Board of Options Exchange, the Chicago Mercantile Exchange or the
Chicago Board of Trade [or other relevant exchanges], (ii) trading of any
securities of the Company shall have been suspended on any exchange or in any
over-the-counter market, (iii) a material disruption in securities settlement,
payment or clearance services in the United States [or other relevant
jurisdiction] shall have occurred, (iv) any moratorium on commercial banking
activities shall have been declared by Federal or New York State [or relevant
foreign country(16)] authorities or (v) there shall have occurred any outbreak
or escalation of hostilities, or any change in financial markets (or, if the
Securities are denominated in a currency other than U.S. dollars, any change in
currency exchange rates or controls) or any calamity or crisis that, in your
judgment, is material and adverse and which, singly or together with any other
event specified in this clause (v), makes it, in your judgment, impracticable or
inadvisable to proceed with the offer, sale or delivery of the Securities on the
terms and in the manner contemplated in the Time of Sale Prospectus or the
Prospectus.
11. Effectiveness; Defaulting Underwriters. This Agreement shall become
effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date, any one or more of the Underwriters shall fail or
refuse to purchase Underwriters' Securities that it has or they have agreed to
purchase hereunder on such date, and the aggregate principal amount of
Underwriters' Securities which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate principal amount of the Underwriters' Securities to be purchased on
such date, the other Underwriters shall be obligated severally in the
proportions that the principal amount of Securities set forth opposite their
respective names in Schedule II bears to the aggregate principal amount of
Securities set forth opposite the names of all such non-defaulting Underwriters,
or in such other proportions as you may specify, to purchase the Underwriters'
Securities which such defaulting Underwriter or Underwriters agreed but failed
or refused to purchase on such date; provided that in no event shall the
principal amount of Underwriters' Securities that any Underwriter has agreed to
purchase pursuant to this Agreement be increased pursuant to this Section 11 by
an amount in excess of one-ninth of such principal amount of Underwriters'
Securities without the written consent of such Underwriter. If, on the Closing
Date, any Underwriter or Underwriters shall fail or refuse to purchase
Underwriters' Securities and the aggregate principal amount of Underwriters'
Securities with respect to which such default occurs is more than one-tenth of
the aggregate principal amount of Underwriters' Securities to be purchased on
such date, and arrangements
- ---------------------------------
(16) Include if transaction involves offshore settlement.
25
satisfactory to you and the Company for the purchase of such Underwriters'
Securities are not made within 36 hours after such default, this Agreement shall
terminate without liability on the part of any non-defaulting Underwriter or the
Company. In any such case either you or the Company shall have the right to
postpone the Closing Date but in no event for longer than seven days, in order
that the required changes, if any, in the Registration Statement, in the Time of
Sale Prospectus, in the Prospectus or in any other documents or arrangements may
be effected. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.(17)
If this Agreement shall be terminated by the Underwriters, or any of them,
because of any failure or refusal on the part of the Company to comply with the
terms or to fulfill any of the conditions of this Agreement, or if for any
reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder.
12. Entire Agreement. (a) This Agreement, together with any contemporaneous
written agreements and any prior written agreements (to the extent not
superseded by this Agreement) that relate to the offering of the Securities,
represents the entire agreement between the Company and the Underwriters with
respect to the preparation of any preliminary prospectus, the Time of Sale
Prospectus, the Prospectus, the conduct of the offering, and the purchase and
sale of the Securities.
(b) The Company acknowledges that in connection with the offering of the
Securities: (i) the Underwriters have acted at arms length, are not agents of,
and owe no fiduciary duties to, the Company or any other person, (ii) the
Underwriters owe the Company only those duties and obligations set forth in this
Agreement and prior written agreements (to the extent not superseded by this
Agreement), if any, and (iii) the Underwriters may have interests that differ
from those of the Company. The Company waives to the full extent permitted by
applicable law any claims it may have against the Underwriters arising from an
alleged breach of fiduciary duty in connection with the offering of the
Securities.
13. Counterparts. This Agreement may be signed in two or more counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
- ---------------------------------
(17) This section will require modification for offerings of Preferred
Stock, Warrants or Units.
26
14. Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
15. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
16. Notices. All communications hereunder shall be in writing and effective
only upon receipt and if to the Underwriters shall be delivered, mailed or sent
to you at the address set forth in Schedule I hereto; and if to the Company
shall be delivered, mailed or sent to the address set forth in Schedule I
hereto.
Very truly yours,
MORGAN STANLEY
By:
-----------------------------------
Name:
Title:
Accepted as of the date hereof
[NAMES OF CO-MANAGERS]
Acting severally on behalf of
themselves and the several
Underwriters named in Schedule II
hereto
By: [Names of Co-Managers]
By:
---------------------------------
Name:
Title:
27
SCHEDULE I(18)
Managers: [Morgan Stanley & Co.
Incorporated/
Morgan Stanley & Co.
International Limited]
[additional Managers]
Manager authorized to release
lock-up under Section 7(k):
[Morgan Stanley & Co.
Incorporated/Morgan Stanley
& Co. International Limited]
Manager authorized to appoint
counsel under Section 9(c):
[Morgan Stanley & Co.
Incorporated/Morgan Stanley
& Co. International Limited]
Indenture: [Senior/Subordinated] Debt
Indenture dated as of
________________, 200_ between
the Company and the Trustee
Trustee:
Registration Statement File No.: 333-[ ]
Time of Sale Prospectus 1. Prospectus dated _
relating to the Shelf
Securities
2. [the preliminary
prospectus supplement
dated _ relating to the
Securities]
3. [free writing prospectus
containing a description
of terms that does not
reflect final terms, if
the Time of Sale
Prospectus does not
include a final term sheet]
4. [Identify all free writing
prospectuses filed by the
Company under Rule 433(d)
of the Securities Act]
- ---------------------------------
(18) Schedule I will be modified for Shelf Securities other than Debt
Securities, as applicable.
I-1
5. [orally communicated
pricing information to be
included on Schedule I if
a final term sheet is not
used]
Securities to be purchased: [insert Full Title of Securities]
CUSIP/ISIN/Common Code:
Aggregate Principal Amount: $___________
Purchase Price: ____% of the principal amount of
the Securities, plus accrued
interest, if any, from
________________, 200_
Contract Securities Commission % of the principal amount of the
Price to Public: Contract Securities
Maturity Date: ________________, 20__
Original Issue Date:
Accrual Date:
Interest Rate:(19) ____% per annum, accruing from
__________________, 200_
Interest Payment Dates:
Interest Payment Dates: _____________ and ______________
commencing ________________, 20__
Interest Payment Period:
Optional Repayment Date(s):
- ---------------------------------
(19) Insert additional terms, as applicable: For floating-rate Securities,
include Base Rate, Index Maturity, Index Currency, Spread (Plus or Minus),
Spread Multiplier, Initial Interest Rate, Initial Interest Reset Date, Interest
Reset Dates, Interest Reset Period, Maximum Interest Rate, Minimum Interest
Rate, Calculation Agent, Reporting Service; and such other terms as may be
needed to describe the Securities.
I-2
Optional Redemption Date(s):
Initial Redemption Date(s):
Initial Redemption Percentage:
Annual Redemption Percentage
Reduction:
Ranking:
Minimum Denominations:
Place of Delivery:
Specified Currency:
Closing Date and Time: ______________, 200_ __:__ a.m.
Closing Location: Sidley Austin LLP
787 Seventh Avenue
New York, New York 10019
Address for Notices to Underwriters:
Address for Notices to the Company:
I-3
SCHEDULE II
Principal Amount
of Securities To
Underwriter Be Purchased
- ------------------------------------------------ ------------------
[NAMES OF MANAGERS]............................
[NAMES OF OTHER UNDERWRITERS]..................
-------------------
Total.................................... $
===================
I-4
SCHEDULE III
DELAYED DELIVERY CONTRACT
________, 200_
Ladies and Gentlemen:
The undersigned hereby agrees to purchase from Morgan Stanley, a Delaware
corporation (the "Company"), and the Company agrees to sell to the undersigned
the Company's securities described in Schedule A annexed hereto (the
"Securities"), offered by the Company's Prospectus dated , 200_ and
Prospectus Supplement dated , 200_, receipt of copies of which are
hereby acknowledged, at a purchase price stated in Schedule A hereto and on the
further terms and conditions set forth in this Agreement. The undersigned does
not contemplate selling Securities prior to making payment therefor.
The undersigned will purchase from the Company Securities in the principal
amount and numbers on the delivery dates set forth in Schedule A hereto. Each
such date on which Securities are to be purchased hereunder is hereinafter
referred to as a "Delivery Date."
Payment for the Securities which the undersigned has agreed to purchase on
each Delivery Date shall be made in immediately available funds at the office of
, New York, N.Y., at 10:00 a.m. (New York City time) on
the Delivery Date, upon delivery to the undersigned of the Securities to be
purchased by the undersigned on the Delivery Date, 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 five full
business days prior to the Delivery Date.
The obligation of the undersigned to take delivery of and make payment for
the Securities on the Delivery Date shall be subject to the conditions that (1)
the purchase of Securities to be made by the undersigned shall not at the time
of delivery be prohibited under the laws of the jurisdiction to which the
undersigned is subject and (2) the Company shall have sold, and delivery shall
have taken place to the underwriters (the "Underwriters") named in the
Prospectus Supplement referred to above of, such part of the Securities as is to
be sold to them. Promptly after completion of sale and delivery 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.
A-1
Failure to take delivery of and make payment for Securities by any
purchaser under any other Delayed Delivery Contract shall not relieve the
undersigned of its obligations under this agreement.
This Agreement 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.
If this Agreement 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 agreement, as of the date first above written, between the
Company and the undersigned when such counterpart is so mailed or delivered.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.
Yours very truly,
----------------------------------
(Purchaser)
By:
--------------------------------
Name:
Title:
Address:
Accepted as of the date hereof:
MORGAN STANLEY
By:
------------------------------
Name:
Title:
A-2
PURCHASER -- PLEASE COMPLETE AT TIME OF SIGNING
The name and telephone and department of the representative(s) of the
Purchaser with whom details of delivery on the Delivery Date may be discussed is
as follows:
(Please print.)
Telephone No.
Name (including Area Code) Department
---- --------------------- ----------
-------------------- --------------------- --------------------
-------------------- --------------------- --------------------
-------------------- --------------------- --------------------
-------------------- --------------------- --------------------
A-3
SCHEDULE A
(to Schedule III)
Securities:
Principal Amounts or Numbers to be Purchased:
Purchase Price:
Delivery:
A-4