EXHIBIT 1-b
FORM OF
UNDERWRITING AGREEMENT
(PREFERRED STOCK, DEPOSITARY SHARES AND COMMON STOCK)
MORGAN STANLEY
_________, 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
number of its [shares of its ___% Cumulative Preferred Stock, par value $.01 per
share, stated value $____ per share ("Preferred Shares")](1) [Depositary Shares,
each representing a [fraction] interest in its __% Cumulative Preferred Stock,
par value $.01 per share, stated value $______ per share ("Depositary
Shares")](2) [shares of its common stock, par value $.01 per share ("Common
Stock," and the shares of Common Stock that are the subject of this Underwriting
Agreement are referred to as the "Common Shares")](3) identified in Schedule I
hereto (the "Firm Offered Securities"). The Company also proposes to issue and
sell to the Underwriters not more than any additional number of its [shares of
["Preferred Shares"/"Depositary Shares"/"Common Stock"](4) identified in
Schedule I hereto (the "Additional Offered Securities") if and to the extent
that you shall have determined to exercise, on behalf of the Underwriters, the
right to purchase such Additional Capital Securities granted to the Underwriters
herein. The Firm Offered Securities and the Additional Offered Securities are
hereinafter collectively referred to as the "Offered Securities." 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.
[The Depositary Shares will be issued by ______________ (the
"Depositary") pursuant to the terms of a Deposit Agreement (the "Deposit
Agreement") to be entered into among the Company, the Depositary, and the
holders from time to time of Depositary Receipts issued thereunder. The
Depositary Shares will be evidenced by Depositary Receipts issued pursuant to
the Deposit Agreement (the "Depositary Receipts"). The shares of the Company's
___%
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(1) Include only for issuances of Preferred Stock.
(2) Include only for issuances of Depositary Shares representing interests in
Preferred stock.
(3) Include only for issuances of Common Stock.
(4) Delete as appropriate.
Cumulative Preferred Stock, par value $.01 per share, stated value $________ per
share, relating to the Depositary Shares are hereinafter referred to as the
"Underlying Preferred Shares".](5)
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) relating to, among other
securities, the Offered Securities [and any Underlying Preferred Shares] and
has filed with, or transmitted for filing to, or shall promptly after the date
of this Agreement file with or transmit for filing to, the Commission a
prospectus supplement (in the form first used to confirm sales of the Offered
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), the "Prospectus Supplement") pursuant to Rule 424 under the
Securities Act of 1933, as amended (the "Securities Act"). The term
"Registration Statement" means 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. The term "Basic Prospectus" means the
prospectus. dated ______, 20__, relating to the Offered Securities [and any
Underlying Preferred Shares] included in the Registration Statement, in the
form first used to confirm sales of the Offered 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). The term
"Prospectus" means the Basic Prospectus as supplemented by the Prospectus
Supplement. The term "preliminary prospectus" means any preliminary form of
Prospectus. For the purposes of this Agreement, the term "free writing
prospectus" has the meaning set forth in Rule 405 under the Securities Act. The
term "Time of Sale Prospectus" means the Basic Prospectus and the preliminary
prospectus together with the free writing prospectuses, if any, and the other
documents or information 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 or 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.
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) and the Company is eligible to use the Registration
Statement as an automatic shelf registration statement and the Company has
not received
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(5) Include only for issuances of Depositary Shares representing interests in
Preferred Stock.
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notice that the Commission objects to the use of the Registration Statement
as an automatic shelf registration statement.
(b) Any 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 rules and regulations
of the Commission thereunder.
(c) (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 or the Option
Closing Date (each defined in Section 4), as the case may be, 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.
(d) The Company is not an "ineligible issuer" in connection with the
offering of the Offered 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
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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.
(e) 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.
(f) 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.
(g) The authorized capital stock of the Company, the Offered
Securities, any Underlying Preferred Shares, any Depositary Shares and any
Deposit Agreement conform as to legal matters to the descriptions thereof
contained in the Time of Sale Prospectus.
(h) In the case of Offered Securities that are Common Shares, the
shares of the Company's Common Stock outstanding prior to the issuance of
the Offered Securities have been duly authorized and are validly issued,
fully paid and non-assessable; and 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 securities be registered for sale under the
Registration Statement or included in the offering, except for such rights
as have been duly waived.
(i) The Preferred Shares, the Underlying Preferred Shares or the
Common Shares, as the case may be, have been duly authorized by the Company
and, when such
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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; in the case of Preferred Shares that are
convertible into Common Stock, the shares of Common Stock into which the
Preferred Shares are convertible have been duly authorized and reserved,
and, when issued upon conversion of the Preferred Shares in accordance with
their terms, will be validly issued, fully paid and non-assessable, and the
issuance of such shares will not be subject to any preemptive or similar
rights.
(j) In the case of Offered Securities that are Depositary Shares, the
deposit of the Underlying Preferred Shares by the Company in accordance
with any Deposit Agreement has been duly authorized and, when the
Depositary Shares are issued and delivered in accordance with the terms of
this Agreement, the Depositary Shares will represent legal and valid
interests in the Underlying Preferred Shares.
(k) Assuming due authorization, execution and delivery of any Deposit
Agreement by the Depositary, each Depositary Share, if any, will represent
the interest described in the Time of Sale Prospectus in a validly issued,
outstanding, fully paid and non-assessable Underlying Preferred Share;
assuming due execution and delivery of the Depositary Receipts, if any, by
the Depositary pursuant to such Deposit Agreement, the Depositary Receipts
will entitle the holders thereof to the benefits provided therein and in
the Deposit Agreement.
(l) This Agreement has been duly authorized, executed and delivered by
the Company.
(m) The Deposit Agreement, if any, has been duly authorized, executed
and delivered by the Company and is a valid and binding agreement of the
Company.
(n) The execution and delivery by the Company of, and the performance
by the Company of its obligations under, this Agreement, any certificate of
designation relating to the Preferred Shares or the Underlying Preferred
Shares, as the case may be (the "Certificate of Designation"), and the
Deposit 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 Certificate of Designation, if any, and the
Deposit 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 Offered Securities; provided, however, that no representation
is made as to whether the purchase of the Offered 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.
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(o) 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.
(p) 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 Deposit Agreement or the Offered 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.
(q) Each preliminary prospectus filed as part of the registration
statement as originally filed or a 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 of
the Commission thereunder.
(r) The Company is not, and after giving effect to the offering and
sale of the Preferred Shares, the Underlying Preferred Shares or the Common
Shares, as the case may be, 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.
(s) 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.
(t) 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.
(u) 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.
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
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jointly, to purchase from the Company the respective number of Firm Offered
Securities set forth in Schedule II hereto opposite its name at the purchase
price set forth in Schedule I hereto.
In addition, upon the basis of the representations and warranties herein
contained, but subject to the terms and conditions set forth herein, the
Company hereby agrees to sell to the Underwriters the Additional Offered
Securities and the Underwriters shall have a one-time right to purchase,
severally and not jointly, up to the respective number of Additional Offered
Securities identified in Schedule I hereto at the purchase price set forth in
Schedule I hereto. Additional Offered Securities may be purchased as provided
herein solely for the purpose of covering over-allotments made in connection
with the offering of the Firm Offered Securities. If any Additional Offered
Securities are to be purchased, 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 the number
of Additional Offered Securities (subject to such adjustments to eliminate
fractional Additional Offered Securities as you may determine) that bears the
same proportion to the total number of Additional Offered Securities to be
purchased as the number of Firm Offered Securities set forth in Schedule II
hereto opposite the name of such Underwriter bears to the total number of Firm
Offered Securities.
3. Public Offering. The Company is advised by you that the Underwriters
propose to make a public offering of their respective portions of the Offered
Securities as soon after this Agreement has become effective as in your judgment
is advisable. The Company is further advised by you that the Offered Securities
are to be offered to the public upon the terms set forth in the Prospectus.
4. Purchase and Delivery. Payment for the Firm Offered 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."
Payment for any Additional Offered Securities shall be made to the Company
in Federal or other funds immediately available in New York City at the closing
place referred to above on such date of your determination (which may be the
same as the Closing Date but shall in no event be earlier than the Closing Date
nor later than ten business days after the giving of the notice hereinafter
referred to) as shall be designated in a written notice from you to the Company,
on behalf of the Underwriters, to purchase a number, specified in said notice,
of Additional Offered Securities, or on such other date as shall be designated
in writing by you. In any event, such payment date shall be not later than
__________, 20__. The time and date of such payment are hereinafter referred to
as the "Option Closing Date." The notice of the determination to exercise the
option to purchase Additional Offered Securities and of the Option Closing Date
may be given at any time within 30 days after the date of this Agreement.
Payment for the Firm Offered Securities or any Additional Offered
Securities shall be made against delivery to you on the Closing Date or the
Option Closing Date, as the case may be, for the respective accounts of the
several Underwriters, of the Firm Offered Securities or any Additional Capital
Securities, as the case may be, registered in such names and in such
denominations as you shall request in writing not less than one full business
day prior to the
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Closing Date or the Option Closing Date, as the case may be, with any transfer
taxes payable in connection with the transfer of the Firm Offered Securities or
any Additional Offered Securities, as the case may be, to the Underwriters duly
paid.
5. Conditions to the Underwriters' Obligations. The several obligations of
the Underwriters hereunder are subject to the following conditions:
(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 Offered 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 clause (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 on or before the
Closing Date.
The executive 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, 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:
(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;
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(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 authorized capital stock of the Company, the Offered
Securities, any Underlying Preferred Shares, any Depositary Shares and
any Deposit Agreement conform as to legal matters to the descriptions
thereof contained in the Time of Sale Prospectus;
(v) in the case of Offered Securities that are Common Shares, the
shares of the Company's Common Stock outstanding prior to the issuance
of the Offered Securities have been duly authorized and are validly
issued, fully paid and non-assessable; 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 securities be registered for
sale under the Registration Statement or included in the offering,
except for such rights as have been duly waived;
(vi) the Preferred Shares, the Underlying Preferred Shares or the
Common Shares, as the case may be, have been duly authorized 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; in the case of Preferred Shares that are
convertible into Common Stock, the shares of Common Stock into which
the Preferred Shares are convertible have been duly authorized and
reserved, and, when issued upon conversion of the Preferred Shares in
accordance with their terms, will be validly issued, fully paid and
non-assessable, and the issuance of such shares will not be subject to
any preemptive or similar rights;
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(vii) in the case of Offered Securities that are Depositary
Shares, the deposit of the Underlying Preferred Shares by the Company
in accordance with any Deposit Agreement has been duly authorized and,
when the Depositary Shares are issued and delivered in accordance with
the terms of this Agreement, the Depositary Shares will represent
legal and valid interests in the Underlying Preferred Shares;
(viii) assuming due authorization, execution and delivery of any
Deposit Agreement by the Depositary, each Depositary Share, if any,
will represent the interest described in the Time of Sale Prospectus
in a validly issued, outstanding, fully paid and non-assessable
Underlying Preferred Share; assuming due execution and delivery of the
Depositary Receipts, if any, by the Depositary pursuant to such
Deposit Agreement, the Depositary Receipts will entitle the holders
thereof to the benefits provided therein and in the Deposit Agreement;
(ix) this Agreement has been duly authorized, executed and
delivered by the Company;
(x) the Deposit Agreement, if any, has been duly authorized,
executed and delivered by the Company and is a valid and binding
agreement of the Company;
(xi) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement,
the Certificate of Designation, if any, and the Deposit Agreement, if
any, will not contravene any provisions 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 Certificate of
Designation, if any, and the Deposit 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 Offered
Securities; provided, however, that such counsel need not express an
opinion as to whether the purchase of the Offered 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;
(xii) the statements relating to legal matters, documents or
proceedings included in (A) the Basic Prospectus under "Description
of Capital Stock" and "Plan of Distribution," (B) the Time of Sale
Prospectus, if applicable, and the Prospectus Supplement under
"Description of Cumulative Preferred Stock," "Description of
Depositary Shares" or "Description
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of Offered Common Stock," as the case may be, and under "Dividend
Policy" and "Underwriters," (C) in the Registration Statement under
Item 15, (D) in "Item 3. Legal Proceedings" of the most recent annual
report on Form 10-K incorporated by reference in the Time of Sale
Prospectus and (E) in "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 in each case fairly summarize in all material
respects such matters, documents or proceedings;
(xiii) 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;
(xiv) the Company is not, and after giving effect to the offering
and sale of the Preferred Shares, the Underlying Preferred Shares or
the Common Shares, as the case may be, 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;
(xv) such counsel is of the opinion ascribed to it under the
caption "United States Federal Income Tax Consequences" in the Time of
Sale Prospectus, if applicable, and the Prospectus Supplement; and
(xvi) (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 (2) 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
11
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, (2) 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, (3) 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 the statements therein, in the light of
the circumstances under which they were made not misleading or (4)
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, counsel for the Underwriters, dated the Closing Date,
covering the matters referred to in Sections 5(c)(iv), 5(c)(v), 5(c)(vi),
5(c)(vii), 5(c)(viii), 5(c)(ix), 5(c)(x), clauses (A) and (B) of Section
5(c)(xii) and Sections 5(c)(xvi)(A)(2), 5(c)(xvi)(B)(2), 5(c)(xvi)(B)(3) and
5(c)(xvi)(B)(4).
With respect to Section 5(c)(xvi) 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 belief are based upon his or her participation, or the
participation of someone under his or her supervision, in the preparation of
the Registration Statement, Time of Sale Prospectus and 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 5(c)(xvi) 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, Time of Sale Prospectus, Prospectus,
preliminary prospectus supplement, if any, any 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 (but not
including documents incorporated therein 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..
12
The opinion of Davis Polk & Wardwell, or any other outside
counsel to the Company, described in Section 5(c) above shall be
rendered to the Underwriters at the request of the Company and shall so
state therein.
(e) The Underwriters shall have received on the Closing Date 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.
(f) In the case of Offered Securities that are Common Shares or
Preferred Shares convertible into Common Stock, the Manager shall have
received "lock-up" agreements, each substantially in the form of Exhibit A
hereto, between the Manager and certain shareholders, officers and
directors of the Company relating to sales and certain other dispositions
of shares of Common Stock or certain other securities, delivered to the
Manager on or prior the date of the Underwriting Agreement, and each such
lock-up agreement shall be in full force and effect on the Closing Date.
The several obligations of the Underwriters to purchase Additional Offered
Securities hereunder are subject to the delivery to you on the Option Closing
Date of such documents as you may reasonably request with respect to the good
standing of the Company, the due authorization and issuance of the Additional
Offered Securities and other matters related to the issuance of the Additional
Offered Securities.
6. 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 6(e) or 6(f) below, as many copies
of the Time of Sale Prospectus, the Prospectus, any documents incorporated
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.
(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
13
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.
(e) If the Time of Sale Prospectus is being used to solicit offers to
buy the Offered Securities at a time when the Prospectus is not yet
available to prospective purchasers and any event shall occur or condition
shall 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 shall 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 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 Offered 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
shall 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 existing 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 Offered 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 Offered 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 earning statement shall
satisfy the provisions of Section 11(a) of the Securities Act and the rules
and regulations of the Commission thereunder.
14
(i) To use its best efforts to accomplish the listing of the Offered
Securities on the New York Stock Exchange and, in the case of Offered
Securities that are Common Shares, the Pacific Exchange.
(j) In the case of Offered Securities that are Preferred Shares or
Depositary Shares, during the period beginning on the date of the
Underwriting Agreement and continuing to and including the Closing Date,
not to offer, sell, contract to sell or otherwise dispose of any preferred
stock of the Company, as the case may be, substantially similar to the
Offered Securities (other than the Offered Securities), without the prior
written consent of the Manager.
(k) In the case of Offered Securities that are Common Shares, during
the period beginning on the date of the Underwriting Agreement and
continuing to and including [90] days after the date of the Prospectus,
and without the prior written consent of the Manager with the
authorization to release the lock-up letter on behalf of the Underwriters,
not to (i) to offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase, lend, or otherwise transfer or
dispose of, directly or indirectly, any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common
Stock or (ii) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of
ownership of the Common Stock, whether such transaction described in
clause (i) or (ii) above is to be settled by delivery of the Common Stock
or such other securities, in cash or otherwise, except in the offering.
The restrictions contained in the preceding sentence shall not apply to
(i) the Common Shares to be sold hereunder or (ii) the issuance by the
Company of shares of Common Stock upon the exercise of an option or
warrant or the conversion of a restricted stock unit or other security
outstanding on the date of the Underwriting Agreement of which the Manager
has been advised in writing.
(l) 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 the Company's 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 Offered 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 Offered 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 Offered
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 Offered Securities for offer and sale under state
securities laws as provided in Section 6(g) hereof, including filing fees
and the reasonable fees and
15
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 Offered Securities by the National
Association of Securities Dealers, Inc., (v) any fees charged by the rating
agencies for the rating of the Offered Securities, [(vi) all fees and
expenses in connection with the preparation and filing of the registration
statement on Form 8-A relating to the Offered Securities and all costs and
expenses incident to listing the Offered Securities on the New York Stock
Exchange] (vii) the cost of the preparation, issuance and delivery of the
Offered 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 Offered 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 8 entitled "Indemnity and Contribution,"
and the last paragraph of Section 10 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 Offered Securities
by them and any advertising expenses connected with any offers they may
make.
(m) If the third anniversary of the initial effective date of the
Registration Statement occurs before all the Offered 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 Offered Securities to continue without
interruption; references herein to the Registration Statement shall include
the new registration statement declared effective by the Commission.
(n) To prepare, if the Managers so request, a final term sheet
relating to the offering of the Offered Securities, containing only
information that describes the final terms of the Offered 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 Offered Securities.
7. Covenants of the Underwriters. Each Underwriter severally covenants with
the Company not to 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.
16
8. Indemnification and Contribution. (a) 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 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 8(a) or 8(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 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
17
incurred. Such firm shall be designated in writing by the Manager
authorized to appoint counsel under this Section 8 as set forth in Schedule
I hereto,, in the case of parties indemnified pursuant to Section 8(a), and
by the Company, in the case of parties indemnified pursuant to Section
8(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 8(a) or
8(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 (i) in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand and the
Underwriters on the other hand from the offering of the Offered Securities
or (ii) if the allocation provided by clause 8(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 8(d)(i) above but also the
relative fault of the Company on the one hand and of 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 Offered Securities shall be deemed to
be in the same respective proportions as the net proceeds from the offering
of such Offered 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
Offered 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'
18
respective obligations to contribute pursuant to this Section 8 are several
in proportion to the respective principal amounts of Offered 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 6 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 8(d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in Section 8(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 8, no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at
which the Offered 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 8 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 8 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, the officers or directors of the Company or any
person controlling the Company and (iii) acceptance of and payment for any
of the Offered Securities.
9. 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
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, (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 authorities or (v) there shall have occurred any outbreak or
escalation of hostilities or any change in financial markets (or, if the Offered
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
19
Offered Securities on the terms and in the manner contemplated in the Time of
Sale Prospectus or the Prospectus.
10. Effectiveness; Defaulting Underwriters. This Agreement shall become
effective upon the execution and delivery hereof by the parties hereto. If, on
the Closing Date or the Option Closing Date, as the case may be, any one or more
of the Underwriters shall fail or refuse to purchase Offered Securities that it
has or they have agreed to purchase hereunder on such date, and the aggregate
number of Offered Securities which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate number of the Offered Securities to be purchased on such date, the
other Underwriters shall be obligated severally in the proportions that the
number of Firm Offered Securities set forth opposite their respective names in
Schedule II hereto bears to the aggregate number of Firm Offered Securities set
forth opposite the names of all such non-defaulting Underwriters, or in such
other proportions as you may specify, to purchase the Offered Securities which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase on such date; provided that in no event shall the number of Offered
Securities that any Underwriter has agreed to purchase pursuant to the
Underwriting Agreement be increased pursuant to this Section 10 by an amount in
excess of one-ninth of such number of Offered Securities without the written
consent of such Underwriter. If, on the Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase Firm Offered Securities and the
aggregate number of Firm Offered Securities with respect to which such default
occurs is more than one-tenth of the aggregate number of Firm Offered Securities
to be purchased on such date, and arrangements satisfactory to you and the
Company for the purchase of such Firm Offered 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. If, on the
Option Closing Date, any Underwriter or Underwriters shall fail or refuse to
purchase Additional Offered Securities and the aggregate number of Additional
Offered Securities with respect to which such default occurs is more than
one-tenth of the aggregate number of Additional Offered Securities to be
purchased on such date, the non-defaulting Underwriters shall have the option to
(i) terminate their obligation hereunder to purchase Additional Offered
Securities or (ii) purchase not less than the number of Additional Offered
Securities that such non-defaulting Underwriters would have been obligated to
purchase in the absence of such default. 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.
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.
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11. 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 Offered
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 Offered 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 Offered Securities.
12. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
13. Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
14. 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.
15. 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.
21
Very truly yours,
MORGAN STANLEY
By:
-------------------------------------------
Name:
Title:
Accepted as of the date hereof
[NAME[S] OF [CO-]MANAGER[S]]
Acting severally on behalf of [itself][themselves] and
the several Underwriters named in Schedule II hereto
By: [Name[s] of [Co-]Manager[s]]
By:
-------------------------------------
Name:
Title:
EXHIBIT A
[FORM OF LOCK-UP LETTER]
_______ __, 200_
Morgan Stanley & Co. Incorporated
[Morgan Stanley DW Inc.]
[Name of other Lead Managers]
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, NY 10036
Dear Sirs:
The undersigned understands that Morgan Stanley & Co. Incorporated ("MS
& Co.") proposes to enter into an Underwriting Agreement (the "Underwriting
Agreement") with Morgan Stanley, a Delaware corporation (the "Company"),
providing for the public offering (the "Public Offering") by the several
Underwriters, including MS & Co. (the "Underwriters"), of [___shares (the
"Shares") of the common stock, par value $.01 per share, of the Company (the
"Common Stock")] [____ shares of the Company's __% Cumulative Preferred Stock,
par value $.01 per share, stated value $______ per share (the "Preferred
Stock"), convertible into the common stock, par value $.01 per share, of the
Company (the "Common Stock")].
To induce the Underwriters that may participate in the Public Offering
to continue their efforts in connection with the Public Offering, the
undersigned hereby agrees that, without the prior written consent of MS & Co. on
behalf of the Underwriters, it will not, during the period commencing on the
date hereof and ending [90] days after the date of the final prospectus relating
to the Public Offering (the "Prospectus"), (i) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase, lend, or otherwise
transfer or dispose of, directly or indirectly, any shares of Common Stock or
any securities convertible into or exercisable or exchangeable for Common Stock,
or (ii) enter into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of the Common
Stock, whether any such transaction described in clause (i) or (ii) above is to
be settled by delivery of Common Stock or such other securities, in cash or
otherwise. The foregoing sentence shall not apply to (a) the sale of any
[Shares/Preferred Stock] to the Underwriters pursuant to the Underwriting
Agreement or (b) transactions relating to shares of Common Stock or other
securities acquired in open market transactions after the completion of the
Public Offering. In addition, the undersigned agrees that, without the prior
written consent of MS & Co. on behalf of the Underwriters, it will not, during
the period commencing on the date hereof and ending [90] days after the date of
the Prospectus, make any demand for or exercise any right with respect to, the
registration of any shares of Common Stock or any security convertible into or
exercisable or exchangeable for Common Stock. The undersigned also agrees and
consents to the entry of stop transfer instructions with the Company's transfer
agent and registrar against the transfer of the undersigned's shares of Common
Stock except in compliance with the foregoing restrictions.
A-1
The undersigned understands that the Company and the Underwriters are
relying upon this Lock-Up Agreement in proceeding toward consummation of the
Public Offering. The undersigned further understands that this Lock-Up Agreement
is irrevocable and shall be binding upon the undersigned's heirs, legal
representatives, successors and assigns.
Whether or not the Public Offering actually occurs depends on a number
of factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.
Very truly yours,
---------------------------------------
(Name)
---------------------------------------
(Address)
A-2
SCHEDULE I
Managers: [Morgan Stanley & Co. Incorporated/
Morgan Stanley & Co. International
Limited]
[additional Managers]
Manager authorized to release lock-up
under Section 6(k): [Morgan
Stanley & Co. Incorporated/Morgan
Stanley & Co. International
Limited]
Manager authorized to appoint counsel
under Section 8(c): [Morgan
Stanley & Co. Incorporated/Morgan
Stanley & Co. International
Limited]
Registration Statement File No.: 333-_______
Time of Sale Prospectus: A. Basic Prospectus dated ______,
20__
B. preliminary prospectus
dated __________, 20__
relating to the Securities
C. [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]
D. [Identify all free writing
prospectuses filed by the
Company under Rule 433(d)
of the Securities Act]
E. [orally communicated
pricing information to be
included on Schedule I if a
final term sheet is not
used] [to be discussed]
Offered Securities: [name of offered securities]
[CUSIP/ISIN/Common Code:
(if applicable)]
I-1
Aggregate Number of Firm Offered
Securities:
Aggregate Number of Additional Offered Up to
Securities:
Aggregate Number of Offered Securities
(if the Underwriters' over-allotment
option is exercised in full):
Purchase Price: $_____ per Offered Security, plus
accumulated distributions, if any,
from __________, 20__ to the date
of payment and delivery
Price to Public: $
Underwriters' Compensation per Offered $
Security:
Selling Concession per Offered Security: $
Reallowance per Offered Security: $
Terms of [Underlying] Preferred Shares:
[Original Issue Date:]
[Dividend Rate:] ____% per annum, accruing from
________,20__
[Dividend Payment Dates:]
[Redemption Provisions:]
[Conversion/Exchange Provisions:]
[Other Terms:]
[Terms of Depositary Shares]:
[Original Issue Date:]
[Dividend Rate:] ____% per annum, accruing from
________,20__
[Dividend Payment Dates:]
I-2
[Liquidation Preference:] $_____ per share (equivalent to
$____ per Underlying Preferred
Share)
[Redemption Provisions:]
[Other Terms:]
Closing Date and Time: _____________________, 20__ __:__ 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
Number of Firm
Offered Securities To
Underwriter Be Purchased
[NAMES OF MANAGERS]......................................
[NAMES OF OTHER UNDERWRITERS]............................
-------------------
Total............................................
II-1