DRAFT DATED 11/21/96
MILLENNIUM AMERICA INC.
[ ]% SENIOR NOTES DUE NOVEMBER __, 2006
[ ]% SENIOR DEBENTURES DUE NOVEMBER __, 2026
---------------------------
UNCONDITIONALLY GUARANTEED BY
MILLENNIUM CHEMICALS INC.
UNDERWRITING AGREEMENT
.................., 1996
Goldman, Sachs & Co.,
Bear, Stearns & Co. Inc.,
Merrill Lynch, Pierce, Fenner & Smith
Incorporated,
J.P. Morgan Securities Inc.,
Salomon Brothers Inc
As representatives of the several Underwriters
named in Schedule I hereto,
c/o Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004
Ladies and Gentlemen:
Millennium America Inc., a Delaware corporation (the "Issuer"), proposes,
subject to the terms and conditions stated herein, to issue and sell to the
Underwriters named in Schedule I hereto (the "Underwriters") an aggregate of
$_______ principal amount of the Issuer's __% Senior Notes due November __, 2006
(the "Notes") and an aggregate of $________ principal amount of the Issuer's __%
Senior Debentures due November __, 2026 (the "Debentures" and, together with the
Notes, the "Securities"). The Securities are unconditionally guaranteed (the
"Guarantees") by Millennium Chemicals Inc., a Delaware corporation (the
"Company").
1. The Company and the Issuer represent and warrant to, and agree with,
each of the Underwriters that:
(a) A registration statement on Form S-1 (File No. 333-15975 and
333-15975-01) (including all pre-effective amendments thereto, if any,
the "Initial Registration Statement") in respect of the Securities has
been filed with the Securities and Exchange Commission (the
"Commission"); the Initial Registration Statement and any post-effective
amendment thereto, each in the form heretofore delivered to you, and,
excluding exhibits thereto, to you for each of the other Underwriters,
have been declared effective by the Commission in such form; other than
a registration statement, if any, increasing the size of the offering (a
"Rule 462(b) Registration Statement"), filed pursuant to Rule 462(b)
under the Securities Act of 1933, as amended (the "Act"), which will
become effective upon filing, no other document with respect to the
Initial Registration Statement has heretofore been filed with the
Commission; and no stop order suspending the effectiveness of the
Initial Registration Statement, any post-effective amendment thereto or
the Rule 462(b) Registration Statement, if any, has been issued and no
proceeding for that purpose has been initiated or threatened by the
Commission (any preliminary prospectus included in the Initial
Registration Statement and incorporated by reference in the Rule 462(b)
Registration Statement, if any, or filed with the Commission pursuant to
Rule 424(a) of the rules and regulations of the Commission under the
Act, is hereinafter called a "Preliminary Prospectus"; the various parts
of the Initial Registration Statement and the Rule 462(b) Registration
Statement, if any, including all exhibits thereto but excluding Form T-1
and including the information contained in the form of final prospectus
filed with the Commission pursuant to Rule 424(b) under the Act in
accordance with Section 5(a) hereof and deemed by virtue of Rule 430A
under the Act to be part of the Initial Registration Statement at the
time it was declared effective or the Rule 462(b) Registration
Statement, if any, at the time it became or hereafter becomes effective,
each as amended at the time such part of the registration statement
became effective, are hereinafter collectively called the "Registration
Statement"; and such final prospectus, in the form first filed pursuant
to Rule 424(b) under the Act, is hereinafter called the "Prospectus");
(b) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary
Prospectus, at the time of filing thereof, conformed in all material
respects to the requirements of the Act and the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"), and the rules and
regulations of the Commission thereunder, and did not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that this representation and warranty shall not apply
to any statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Company or the Issuer by an
Underwriter through Goldman, Sachs & Co. expressly for use therein;
(c) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of
the Act and the Trust Indenture Act and the rules and regulations of the
Commission thereunder and do not and will not, as of the applicable
effective date as to the Registration Statement and any amendment
thereto and as of the applicable filing date as to the Prospectus and
any amendment or supplement thereto, contain an 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;
provided, however, that this representation and warranty shall not apply
to any statements or omissions made in
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reliance upon and in conformity with information furnished in writing to
the Company or the Issuer by an Underwriter through Goldman, Sachs & Co.
expressly for use therein;
(d) Neither the Company nor any of its subsidiaries has sustained
since the date of the latest audited financial statements included in
the Prospectus any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance,
or from any labor dispute or court or governmental action, order or
decree, otherwise than as set forth or contemplated in the Prospectus or
such as singly or in the aggregate do not have a material adverse effect
on the financial position, stockholders' equity, or results of
operations of the Company and its subsidiaries, taken as a whole; and,
since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there has not been any change
in the capital stock or long-term debt of the Company and its
subsidiaries, taken as a whole, or any material adverse change, or any
development involving a prospective material adverse change, in or
affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries, taken as a whole, otherwise than as set forth or
contemplated in the Prospectus;
(e) The Company and each of its Significant Subsidiaries (as such
term is defined in Rule 1-02 of Regulation S-X under the Act) has good
and marketable title in fee simple to all real property and good and
marketable title to all personal property owned by it, in each case free
and clear of all liens, encumbrances and defects except such as are
described in the Prospectus or such as could not reasonably be expected
to, singly or in the aggregate, have a material adverse effect on the
financial position, stockholders' equity or results of operations of the
Company and its subsidiaries, taken as a whole; and any real property
and buildings held under lease by the Company and its Significant
Subsidiaries are held by them under valid, subsisting and enforceable
leases with such exceptions as are not material to the Company and its
subsidiaries taken as a whole;
(f) Each of the Company and the Issuer has been duly incorporated
and is validly existing as a corporation in good standing under the laws
of the State of Delaware, with corporate power and authority to own its
properties and conduct its business as described in the Prospectus, and
has been duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties or conducts any
business so as to require such qualification, except where the failure
to be so qualified or in good standing could not reasonably be expected
to, singly or in the aggregate, have a material adverse effect on the
financial position, stockholders' equity or results of operations of the
Company and its subsidiaries, taken as a whole; and each Significant
Subsidiary of the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation, with corporate power and authority to own
its properties and conduct its business as described in the Prospectus,
and has been duly qualified as a foreign corporation for the transaction
of business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties or conducts any
business so as to require such qualification, except where the failure
to be so qualified or in good standing could not reasonably be expected
to, singly or in the aggregate, have a material adverse effect on the
financial position, stockholders' equity or results of operations of the
Company and its subsidiaries, taken as a whole;
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(g) The Company has an authorized capitalization as set forth in
the Prospectus, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued and are fully
paid and non-assessable; and all of the issued shares of capital stock
of each Significant Subsidiary of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and (except for
directors' qualifying shares) are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities or claims;
(h) (i) The Securities have been duly authorized and, when issued
and delivered pursuant to this Agreement, will have been duly executed,
authenticated, issued and delivered and will constitute valid and
legally binding obligations of the Issuer, enforceable in accordance
with their terms and entitled to the benefits provided by the indenture
to be dated as of ___________, 1996 (the "Indenture") among the Company,
the Issuer and The Bank of New York, as Trustee (the "Trustee"), under
which they are to be issued, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles; (ii) the Indenture will be substantially in the form filed
as an exhibit to the Registration Statement; (iii) the Guarantees have
been duly authorized and, upon due execution, authentication and
delivery of the Securities and the endorsement of the Guarantees
thereon, the Guarantees will have been duly executed, issued and
delivered and will constitute valid and legally binding obligations of
the Company, enforceable in accordance with their terms and entitled to
the benefits provided by the Indenture, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to general
equity principles; (iv) the Indenture has been duly authorized and duly
qualified under the Trust Indenture Act and, when executed and delivered
by the Company, the Issuer and the Trustee, will constitute a valid and
legally binding instrument, enforceable in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency, reorganization
and other laws of general applicability relating to or affecting
creditors' rights and to general equity principles; (v) this Agreement
has been duly authorized, executed and delivered by the Company and the
Issuer; and (vi) the Securities, the Guarantees and the Indenture will
conform to the descriptions thereof in the Prospectus;
(i) The issue and sale of the Securities, the endorsement of the
Guarantees on the Securities by the Company and the compliance by the
Company and the Issuer with all of the provisions of the Securities, the
Guarantees, the Indenture and this Agreement and the consummation of the
transactions herein and therein contemplated will not (i) conflict with
or result in a breach or violation of any of the terms or provisions of,
or constitute a default under any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Company or
any of its Significant Subsidiaries is a party or by which the Company
or any of its Significant Subsidiaries is bound or to which any of the
property or assets of the Company or any of its Significant Subsidiaries
is subject, (ii) result in any violation of the provisions of the
Certificate of Incorporation or By-laws of the Company or the Issuer or
(iii) result in any violation of any statute or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its Significant Subsidiaries or
any of their properties, which conflicts, breach or violations, in the
case of Clauses (i) and (iii), could reasonably be expected to, singly
or in the aggregate, have a material adverse effect on the financial
position, stockholders' equity or results of operations of the Company
and its subsidiaries, taken as a whole; and no consent, approval,
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authorization, order, registration or qualification of or with any such
court or governmental agency or body is required for the issue and sale
of the Securities and the Guarantees or the consummation by the Company
and the Issuer of the transactions contemplated by this Agreement or the
Indenture, except the registration under the Act of the Securities and
the Guarantees, such as have been obtained under the Trust Indenture Act
and such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky
laws in connection with the purchase and distribution of the Securities
by the Underwriters;
(j) Neither the Company nor any of its Significant Subsidiaries is
(i) in violation of its Certificate of Incorporation or By-laws or (ii)
in default in the performance or observance of any obligation, covenant
or condition contained in any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which it is a party
or by which it or any of its properties may be bound, which defaults, in
the case of this Clause (ii), could reasonably be expected to, singly or
in the aggregate, have a material adverse effect on the financial
position, stockholders' equity or results of operations of the Company
and its subsidiaries, taken as a whole;
(k) The statements set forth in the Prospectus under the caption
"Description of the Securities", insofar as they purport to constitute a
summary of the terms of the Securities, the Guarantees and the
Indenture, are accurate, complete and fair;
(l) Other than as set forth in the Prospectus, there are no legal
or governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any
of its subsidiaries is the subject which could reasonably be expected
to, singly or in the aggregate, have a material adverse effect on the
financial position, stockholders' equity or results of operations of the
Company and its subsidiaries, taken as a whole; and, to the best of the
Company's and the Issuer's knowledge, no such proceedings are threatened
or contemplated by governmental authorities or threatened by others;
(m) Neither the Company nor the Issuer is and, after giving effect
to the offering and sale of the Securities, will be an "investment
company" or an entity "controlled" by an "investment company", as such
terms are defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act");
(n) Neither the Company, the Issuer nor any of their affiliates
does business with the government of Cuba or with any person or
affiliate located in Cuba within the meaning of Section 517.075, Florida
Statutes;
(o) Price Waterhouse LLP, who have certified certain financial
statements of the Company and its subsidiaries, and Quantum Chemical
Corporation and its subsidiaries, and Ernst & Young LLP, who have
certified certain financial statements of HMB Holdings Inc. and SCM
Chemicals Limited, are each independent public accountants as required
by the Act and the rules and regulations of the Commission thereunder;
(p) All intangibles (including, but not limited to, trademarks,
service marks, trade names, copyrights, patents, patent rights,
inventions and know-how) that the Company or its
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Significant Subsidiaries own or have pending, or under which any of them
are licensed, and which are material to the business of the Company and
its subsidiaries, taken as a whole, are in good standing and uncontested
in all respects material to the Company and its subsidiaries, taken as a
whole, and not subject to any material liens or encumbrances or rights
thereto or therein by third parties, other than license agreements
entered into by the Company or any of its subsidiaries. All of the
trademarks and trade names used by the Company and its subsidiaries and
their respective licensees to identify their products and services,
which are material to the Company and its subsidiaries, taken as a whole
("Trademarks"), are protected by registration or applications for
registration in the name of the Company or its subsidiaries on the
principal register in the United States Patent and Trademark Office and
by rights in the United States accorded the Company and its subsidiaries
by virtue of the common law, as well as, where applicable, by issued and
existing registrations or applications for registration in the name of
the Company or its subsidiaries (or their nominees) and rights accorded
the Company and its subsidiaries by virtue of common or civil law in
foreign jurisdictions in which the Company or its subsidiaries currently
conducts its or their business, except where the failure to be so
registered could not reasonably be expected to, singly or in the
aggregate, result in a material adverse effect upon the financial
position, stockholders' equity or results of operations of the Company
and its subsidiaries, taken as a whole. To the best of the Company's
knowledge, the Company and its subsidiaries and their respective
licensees have the right to use the Trademarks and there are no
oppositions, cancellations or other proceedings challenging such right
of use which, singly or in the aggregate, could reasonably be expected
to have a material adverse effect on the Company and its subsidiaries,
taken as a whole. To the best of the Company's knowledge, no claims are
pending challenging or questioning the use, ownership or validity of any
intangibles owned or used by the Company or any of its subsidiaries
material to the business of the Company and its subsidiaries taken as a
whole;
(q) Except as disclosed in the Prospectus or as could not
reasonably be expected to, singly or in the aggregate, result in a
material adverse effect on the financial position, stockholders' equity
or results of operations of the Company and its subsidiaries, taken as a
whole, (i) neither the Company nor any of its subsidiaries is in
violation of any Environmental Laws (as defined below), (ii) the Company
and its subsidiaries have all permits, authorizations and approvals
required under all applicable Environmental Laws and are each in
compliance with their requirements, (iii) there are no pending or, to
the Company's knowledge, threatened administrative, regulatory or
judicial actions, suits, demands, notices of noncompliance or violation,
proceedings or, to the Company's knowledge, investigations relating to
any Environmental Law against the Company or any of its subsidiaries,
and (iv) there have been no releases, spills or discharges of Hazardous
Materials (as defined below) on or underneath any of the properties
currently or formerly owned, leased or operated by the Company or any of
its subsidiaries. For purposes of this Agreement, the term
"Environmental Law" means any federal, state, local or foreign statute,
law, rule, regulation, ordinance, code, policy or rule of common law and
any judicial or administrative interpretation thereof including any
judicial or administrative order, consent decree or judgment, relating
to pollution or protection of human health, the environment (including,
without limitation, ambient air, surface water, groundwater, land
surface or subsurface strata) or wildlife, including, without
limitation, laws and regulations relating to the release or threatened
release of Hazardous Materials or to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling
of Hazardous Materials. The term "Hazardous Materials" means any
chemical, pollutants, contaminants,
6
wastes, toxic substances, hazardous substances, petroleum or petroleum
products, asbestos, polychlorinated biphenyls, caustic substances,
radioactive materials, or any other substance defined as hazardous,
toxic, or dangerous by, or regulated under, any Environmental Law; and
(r) The Unaudited Pro Forma Combined Financial Data set forth in
the Registration Statement and the Prospectus with respect to the
Company has been prepared in accordance with the applicable requirements
of Rule 11-02 of Regulation S-X promulgated by the Commission, has been
compiled on the pro forma basis described therein, and in the opinion of
the Company, the assumptions used in the preparation thereof were
reasonable at the time made and the adjustments used therein are based
on good faith estimates and assumptions believed by the Company to be
reasonable at the time made.
2. Subject to the terms and conditions herein set forth, the Issuer
agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Issuer, (a)
at a purchase price of ____% of the principal amount thereof, plus accrued
interest, if any, from ____________, 1996 to the Time of Delivery hereunder, the
principal amount of the Notes set forth opposite the name of such Underwriter in
Schedule I hereto under column (A), and (b) at a purchase price of ___% of the
principal amount thereof, plus accrued interest, if any from _________, 1996 to
the Time of Delivery hereunder, the principal amount of the Debentures set forth
opposite the name of such Underwriter in Schedule I hereto under column (B).
3. Upon the authorization by the Underwriters of the release of the
Securities, the several Underwriters propose to offer the Securities for sale
upon the terms and conditions set forth in the Prospectus.
4. (a) The Securities to be purchased by each Underwriter hereunder will
be represented by one or more definitive global Securities in book-entry form
which will be deposited by or on behalf of the Issuer with The Depository Trust
Company ("DTC") or its designated custodian. The Issuer will deliver the
Securities to Goldman, Sachs & Co., for the account of each Underwriter, against
payment by or on behalf of such Underwriter of the purchase price therefor by
wire transfer of Federal (same day) funds, to the account specified by the
Issuer, by causing DTC to credit the Securities to the account of Goldman, Sachs
& Co. at DTC. The Issuer will cause the certificates representing the Securities
to be made available to Goldman, Sachs & Co. for checking at least twenty-four
hours prior to the Time of Delivery (as defined below) at the office of DTC or
its designated custodian (the "Designated Office"). The time and date of such
delivery and payment shall be 9:30 a.m., New York City time, on ____________,
1996 or such other time and date as Goldman, Sachs & Co., the Company and the
Issuer may agree upon in writing. Such time and date are herein called the "Time
of Delivery".
(b) The documents to be delivered at the Time of Delivery by or on
behalf of the parties hereto pursuant to Section 7 hereof, including the
cross-receipt for the Securities and any additional documents requested by the
Underwriters pursuant to Section 7(i) hereof, will be delivered at the offices
of Fried, Frank, Harris, Shriver & Jacobson, One New York Plaza, New York, New
York 10004 (the "Closing Location"), and the Securities will be delivered at the
Designated Office, all at the Time of Delivery. A meeting will be held at the
Closing Location at 2:00 p.m., New York City time, on the New York Business Day
next preceding the Time of Delivery, at which meeting the final drafts of the
documents to be delivered pursuant to the preceding sentence will be available
for review by the
7
parties hereto. For the purposes of this Section 4, "New York Business Day"
shall mean each Monday, Tuesday, Wednesday, Thursday and Friday which is not a
day on which banking institutions in New York City are generally authorized or
obligated by law or executive order to close.
5. Each of the Company and the Issuer agrees with each of the
Underwriters:
(a) To prepare the Prospectus in a form approved by you and to file such
Prospectus pursuant to Rule 424(b) under the Act not later than the Commission's
close of business on the second business day following the execution and
delivery of this Agreement, or, if applicable, such earlier time as may be
required by Rule 430A(a)(3) under the Act; to make no further amendment or any
supplement to the Registration Statement or Prospectus which shall be
disapproved by you promptly after reasonable notice thereof; to advise you,
promptly after it receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective or any supplement to
the Prospectus or any amended Prospectus has been filed and to furnish you with
copies thereof; to advise you, promptly after it receives notice thereof, of the
issuance by the Commission of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or prospectus, of the
suspension of the qualification of the Securities for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for any such
purpose, or of any request by the Commission for the amending or supplementing
of the Registration Statement or Prospectus or for additional information; and,
in the event of the issuance of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or prospectus or suspending any
such qualification, to promptly use its best efforts to obtain the withdrawal of
such order;
(b) Promptly from time to time to take such action as you may reasonably
request to qualify the Securities and the Guarantees for offering and sale under
the securities laws of such jurisdictions as you may request and to comply with
such laws so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution of
the Securities, provided that in connection therewith neither the Company nor
the Issuer shall be required to qualify as a foreign corporation or to file a
general consent to service of process in any jurisdiction;
(c) Prior to 10:00 a.m., New York City time, on the New York Business
Day next succeeding the date of this Agreement and from time to time, to furnish
the Underwriters with copies of the Prospectus in New York City in such
quantities as you may reasonably request, and, if the delivery of a prospectus
is required at any time prior to the expiration of nine months after the time of
issue of the Prospectus in connection with the offering or sale of the
Securities and the Guarantees and if at such time any event shall have occurred
as a result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in light of the
circumstances under which they were made when such Prospectus is delivered, not
misleading, or, if for any other reason it shall be necessary during such same
period to amend or supplement the Prospectus in order to comply with the Act or
the Trust Indenture Act, to notify you and upon your request to prepare and
furnish without charge to each Underwriter and to any dealer in securities as
many copies as you may from time to time reasonably request of an amended
Prospectus or a supplement to the Prospectus which will correct such statement
or omission or effect such compliance; and in case any Underwriter is required
to deliver a prospectus in connection with sales of any of the Securities at any
time nine months or more after the time of issue of the Prospectus, upon your
request but at the expense of
8
such Underwriter, to prepare and deliver to such Underwriter as many copies as
you may request of an amended or supplemented Prospectus complying with Section
10(a)(3) of the Act;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the effective
date of the Registration Statement (as defined in Rule 158(c)), an earnings
statement of the Company and its subsidiaries (which need not be audited)
complying with Section 11(a) of the Act and the rules and regulations of the
Commission thereunder (including, at the option of the Company, Rule 158);
(e) During the period beginning from the date hereof and continuing to
and including the later of the Time of Delivery and such earlier time as you may
notify the Company and the Issuer, not to offer, sell, contract to sell or
otherwise dispose of, except as provided hereunder any securities of the Company
or the Issuer that are substantially similar to the Securities and the
Guarantees;
(f) To furnish to the holders of the Securities all of the documents
specified in Section 1010 of the Indenture, all in the manner specified therein;
(g) During a period of five years from the effective date of the
Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to stockholders of the Company,
and to deliver to you (i) as soon as they are available, copies of any reports
and financial statements which the Company or the Issuer furnishes to or files
with the Commission or any national securities exchange on which the Securities
or any class of securities of the Company or the Issuer are listed;
(h) To use the net proceeds received by it from the sale of the
Securities pursuant to this Agreement in the manner specified in the Prospectus
under the caption "Use of Proceeds;" and
(i) If the Company and the Issuer elect to rely upon Rule 462(b), to
file a Rule 462(b) Registration Statement with the Commission in compliance with
Rule 462(b) by 10:00 p.m., Washington, D.C. time, on the date of this Agreement,
and at the time of filing either to pay to the Commission the filing fee for the
Rule 462(b) Registration Statement or to give irrevocable instructions for the
payment of such fee pursuant to Rule 111(b) under the Act.
6. The Company and the Issuer covenant and agree with one another and
the several Underwriters that the Company and the Issuer (without duplication)
will pay or cause to be paid the following: (i) the fees, disbursements and
expenses of the Company's and the Issuer's counsel and accountants in connection
with the registration of the Securities and the Guarantees under the Act and all
other expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or producing
any Agreement among Underwriters, this Agreement, the Indenture, the Blue Sky
and Legal Investment Memoranda, closing documents (including any compilations
thereof) and
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any other documents in connection with the offering, purchase, sale and delivery
of the Securities and the Guarantees; (iii) all expenses in connection with the
qualification of the Securities and the Guarantees for offering and sale under
state securities laws as provided in Section 5(b) hereof, including the fees and
disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky and legal investment surveys;
(iv) any fees charged by securities rating services for rating the Securities
and the Guarantees; (v) the filing fees incident to, and the fees and
disbursements of counsel for the Underwriters in connection with, any required
review by the National Association of Securities Dealers, Inc. of the terms of
the sale of the Securities and the Guarantees; (vi) the cost of preparing the
Securities and the Guarantees; (vii) the fees and expenses of the Trustee and
any agent of the Trustee and the fees and disbursements of counsel for the
Trustee in connection with the Indenture, the Securities and the Guarantees; and
(viii) all other costs and expenses incident to the performance of its
obligations hereunder which are not otherwise specifically provided for in this
Section. It is understood, however, that, except as provided in this Section,
and Sections 8 and 11 hereof, the Underwriters will pay all of their own costs
and expenses, including the fees of their counsel, transfer taxes on resale of
any of the Securities and the Guarantees by them, and any advertising expenses
connected with any offers they may make.
7. The obligations of the Underwriters hereunder shall be subject, in
their discretion, to the condition that all representations and warranties and
other statements of each of the Company and the Issuer herein are, at and as of
the Time of Delivery, true and correct, the condition that each of the Company
and the Issuer shall have performed all of its obligations hereunder theretofore
to be performed, and the following additional conditions:
(a) The Prospectus shall have been filed with the Commission pursuant to
Rule 424(b) within the applicable time period prescribed for such filing by the
rules and regulations under the Act and in accordance with Section 5(a) hereof;
if the Company and the Issuer have elected to rely upon Rule 462(b), the Rule
462(b) Registration Statement shall have become effective by 10:00 p.m.
Washington, D.C. time on the date of this Agreement; no stop order suspending
the effectiveness of the Registration Statement or any part thereof shall have
been issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and all requests for additional information on the
part of the Commission shall have been complied with to your reasonable
satisfaction;
(b) Fried, Frank, Harris, Shriver & Jacobson, counsel for the
Underwriters, shall have furnished to you such opinion (a draft of such opinion
is attached as Annex II(a) hereto), dated the Time of Delivery, with respect to
the valid existence of the Company and the Issuer, this Agreement, the validity
of the Indenture, the Securities and the Guarantees, the Registration Statement,
the Prospectus and such other related matters as you may reasonably request, and
such counsel shall have received such papers and information as they may
reasonably request to enable them to pass upon such matters;
(c) Weil, Gotshal & Manges LLP, counsel for the Company and the Issuer,
shall have furnished to you their written opinion (a draft of such opinion is
attached as Annex II(b) hereto), dated the Time of Delivery, in form and
substance satisfactory to you, to the effect that:
(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of Delaware, with
corporate power and authority to own its properties and conduct its
business as described in the Prospectus;
10
(ii) The Issuer has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of
Delaware, with corporate power and authority to own its properties and
conduct its business as described in the Prospectus;
(iii) The Company has authorized capital stock as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued and are fully paid and
non-assessable;
(iv) This Agreement has been duly authorized, executed and
delivered by each of the Company and the Issuer;
(v) The Securities have been duly authorized, executed and
delivered by the Issuer, and, when authenticated by the Trustee and paid
for by you in accordance with the terms of the Underwriting Agreement,
will constitute valid and legally binding obligations of the Issuer,
entitled to the benefits provided by the Indenture, enforceable against
the Issuer in accordance with their terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws affecting creditors' rights and
remedies generally, and, as to enforceability, to general principles of
equity, including principles of commercial reasonableness, good faith
and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity);
(vi) The Guarantees have been duly authorized, executed and
delivered by the Company and, when the Securities have been
authenticated by the Trustee and paid for by you in accordance with the
terms of the Underwriting Agreement, will constitute valid and legally
binding obligations of the Company, entitled to the benefits provided by
the Indenture, enforceable against the Company in accordance with their
terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws affecting
creditors' rights and remedies generally, and, as to enforceability, to
general principles of equity, including principles of commercial
reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity);
(vii) The Indenture has been duly authorized, executed and
delivered by the Company and the Issuer and (assuming its due
authorization, execution and delivery by the Trustee) constitutes a
valid and legally binding obligation of the Company and the Issuer,
enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws affecting creditors' rights and
remedies generally and, as to enforceability, to general principles of
equity, including principles of commercial reasonableness, good faith
and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity); and the Indenture has been duly
qualified under the Trust Indenture Act;
(viii) The issue and sale of the Securities by the Issuer and the
Guarantees by the Company and the compliance by the Company and the
Issuer with all of the provisions of the Securities, the Guarantees, the
Indenture and this Agreement and the consummation by them of the
transactions herein and therein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument known to us which is
material to the Company and its subsidiaries, taken as a whole,
11
to which the Company or the Issuer is a party or by which the Company or
the Issuer is bound or to which any of the property or assets of the
Company or the Issuer is subject, nor will such actions result in any
violation of the provisions of the Certificate of Incorporation or
By-laws of the Company or the Issuer or any New York, Delaware corporate
or federal statute, rule or regulation (other than foreign and state
securities or Blue Sky laws, as to which such counsel need not express
an opinion, and other than federal securities laws, as to which such
counsel need not express an opinion except as otherwise set forth
herein) or any order of any court or governmental agency or body having
jurisdiction over the Company or the Issuer or any of their properties
of which we are aware;
(ix) No consent, approval, authorization, order, registration or
qualification of or with any New York, Delaware corporate or federal
governmental agency or body or, to our knowledge, any New York or
federal court, is required for the issue and sale of the Securities by
the Issuer or of the Guarantees by the Company or the consummation by
the Company and the Issuer of the transactions contemplated by this
Agreement or the Indenture, except such as have been obtained under the
Act and the Trust Indenture Act and such consents, approvals,
authorizations, registrations or qualifications as may be required under
state securities or Blue Sky laws in connection with the purchase and
distribution of the Securities and the Guarantees by the Underwriters
(as to which such counsel need not express an opinion);
(x) The statements set forth in the Prospectus under the caption
"Description of the Securities", insofar as they purport to constitute a
summary of the terms of the Securities and the Guarantees or of the
Indenture, are accurate summaries in all material respects;
(xi) Neither the Company nor the Issuer is an "investment company"
as such term is defined in the Investment Company Act; and
(xii) The Registration Statement and the Prospectus and any further
amendments and supplements thereto made by the Company and the Issuer
prior to the Time of Delivery (other than the financial statements and
related notes, financial statement schedules and the other financial and
accounting data therein and Exhibit 25.1 to the Registration Statement,
as to which such counsel need express no opinion) comply as to form in
all material respects with the requirements of the Act and the rules and
regulations thereunder.
In addition, Weil, Gotshal & Manges LLP shall state that it has
participated in conferences with directors, officers and other representatives
of the Company and the Issuer, representatives of the independent public
accountants for the Company and the Issuer, representatives of the Underwriters
and representatives of counsel for the Underwriters, at which conferences the
contents of the Registration Statement and the Prospectus and related matters
were discussed, and, although it has not independently verified and is not
passing upon and assumes no responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement and
Prospectus (except to the extent specified in subsection (x) of this Section
7(c)), no facts have come to its attention which lead it to believe that the
Registration Statement, on the effective date thereof, contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements contained therein not
misleading or that the Prospectus, on the date thereof or at the Time of
Delivery, contained or contains an untrue statement
12
of a material fact or omitted or omits to state a material fact required to be
stated therein or necessary to make the statements contained therein, in light
of the circumstances under which they were made, not misleading (it being
understood that such counsel expresses no view with respect to the financial
statements and related notes, financial statement schedules and the other
financial and accounting data included in the Registration Statement or
Prospectus, or with respect to Exhibit 25.1 to the Registration Statement).
(d) George H. Hempstead, III, Esq., Senior Vice President-Law and
Adminstration, of the Company and the Issuer, shall have furnished to you his
written opinion (a draft of such opinion is attached as Annex II(c) hereto),
dated the Time of Delivery, in form and substance satisfactory to you, to the
effect that:
(i) Each of the Company and the Issuer has been duly qualified as a
foreign corporation for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it owns or
leases properties or conducts any business so as to require such
qualification, except where the failure to be so qualified or in good
standing could not reasonably be expected to, singly or in the
aggregate, have a material adverse effect on the financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries, taken as a whole (such counsel being entitled to rely in
respect of the opinion in this clause upon opinions of local counsel and
in respect of matters of fact upon certificates of officers of the
Company, provided that such counsel shall state that they believe that
both you and they are justified in relying upon such opinions and
certificates and a copy of such opinions and certificates are furnished
to you);
(ii) Each Significant Subsidiary of the Company that is an
operating company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of its jurisdiction of
incorporation; and all of the issued shares of capital stock of each
Significant Subsidiary of the Company that is an operating company have
been duly and validly authorized and issued, are fully paid and
non-assessable, and (except for directors' qualifying shares) are owned
directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims (such counsel being entitled to rely
in respect of the opinion in this clause upon opinions of local counsel
and in respect of matters of fact upon certificates of officers of the
Company or its subsidiaries, provided that such counsel shall state
that they believe that both you and they are justified in relying upon
such opinions and certificates and a copy of such opinions and
certificates are furnished to you);
(iii) To the best of such counsel's knowledge, (i) the Company and
each of its Significant Subsidiaries have good and marketable title in
fee simple to all real property owned by them, in each case free and
clear of all liens, encumbrances and defects, except such as are
described in the Prospectus or such as could not reasonably be expected
to, singly or in the aggregate, have a material adverse effect on the
financial position, stockholders' equity or results of operations of the
Company and its subsidiaries, taken as a whole; and (ii) any real
property and buildings held under lease by the Company and its
Significant Subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material to the
Company and its subsidiaries, taken as a whole (in giving the opinion in
this clause, such counsel may state that no examination of record titles
for the purpose of such opinion has been made, and that they are relying
upon a general review of the titles of the Company and its subsidiaries,
upon opinions of local counsel and abstracts, reports and
13
policies of title companies rendered or issued at or subsequent to the
time of acquisition of such property by the Company or its Significant
Subsidiaries, upon opinions of counsel to the lessors of such property
and, in respect of matters of fact, upon certificates of officers of the
Company or its Significant Subsidiaries, provided that such counsel
shall state that they believe that both you and they are justified in
relying upon such opinions, abstracts, reports, policies and
certificates and copies thereof are furnished to you); and
(iv) To the best of such counsel's knowledge and other than as set
forth in the Prospectus, there are no legal or governmental proceedings
pending to which the Company or any of its subsidiaries is a party or of
which any property of the Company or any of its subsidiaries is the
subject which could reasonably be expected to, singly or in the
aggregate, have a material adverse effect on the financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries, taken as a whole.
In addition, such counsel shall state that no facts have come to his
attention which lead him to believe that the Registration Statement, on the
effective date thereof, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements contained therein not misleading or that the Prospectus, on
the date thereof or at the Time of Delivery, contained or contains an untrue
statement of a material fact or omitted or omits to state a material fact
required to be stated therein or necessary to make the statements contained
therein, in light of the circumstances under which they were made, not
misleading (it being understood that such counsel expresses no view with respect
to the financial statements and related notes, the financial statement schedules
and the other financial data included in the Registration Statement or
Prospectus, or with respect to Exhibit 25.1 to the Registration Statement).
(e) On the date of the Prospectus at a time prior to the execution of
this Agreement, at 9:30 a.m., New York City time, on the effective date of any
post-effective amendment to the Registration Statement filed subsequent to the
date of this Agreement and also at the Time of Delivery, Price Waterhouse LLP
shall have furnished to you a letter, dated the respective dates of delivery
thereof, in form and substance satisfactory to you, to the effect set forth in
Annex I(a) hereto (the executed copy of the letter delivered by Price Waterhouse
LLP prior to the execution of this Agreement is attached as Annex I(b) hereto
and a draft of the form of letter to be delivered by Price Waterhouse LLP on the
effective date of any post-effective amendment to the Registration Statement and
as of each Time of Delivery is attached as Annex I(c) hereto;
(f) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included in
the Prospectus any loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise than as set
forth or contemplated in the Prospectus, and (ii) since the respective dates as
of which information is given in the Prospectus there shall not have been any
change in the capital stock or long-term debt of the Company or any of its
subsidiaries or any change, or any development involving a prospective change,
in or affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the Prospectus, the
effect of which, in any such case described in Clause (i) or (ii), is in your
judgment so material and adverse as to make it impracticable or inadvisable to
proceed with the public offering or the delivery of the Securities and the
Guarantees on the terms and in the manner contemplated in the Prospectus;
14
(g) On or after the date hereof (i) no downgrading shall have occurred
in the rating accorded the Company's or the Issuer's debt securities by any
"nationally recognized statistical rating organization", as that term is defined
by the Commission for purposes of Rule 436(g)(2) under the Act, and (ii) no such
organization shall have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of any of the Company's
or the Issuer's debt securities;
(h) On or after the date hereof there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange; (ii) a suspension or material
limitation in trading in the Company's securities on the New York Stock
Exchange; (iii) a general moratorium on commercial banking activities declared
by either Federal or New York State authorities; or (iv) the outbreak or
escalation of hostilities involving the United States or the declaration by the
United States of a national emergency or war, if the effect of any such event
specified in this Clause (iv) in your judgment makes it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Securities and the Guarantees on the terms and in the manner contemplated in the
Prospectus;
(i) The Company and the Issuer shall have furnished or caused to be
furnished to you at the Time of Delivery certificates of officers of the Company
and the Issuer satisfactory to you as to the accuracy of the representations and
warranties of the Company and the Issuer herein at and as of such Time of
Delivery, as to the performance by the Company and the Issuer of all of its
respective obligations hereunder to be performed at or prior to such Time of
Delivery, as to the matters set forth in subsections (a) and (f) of this Section
and as to such other matters as you may reasonably request; and
(j) The Company and the Issuer shall have complied with the provisions
of Section 5(c) hereof with respect to the furnishing of prospectuses on the New
York Business Day next succeeding the date of the Agreement.
8. (a) The Issuer will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each Underwriter for any legal or
other expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Issuer shall not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration Statement
or the Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company or the Issuer by
any Underwriter through Goldman, Sachs & Co. expressly for use therein. The
Company irrevocably and unconditionally guarantees the prompt performance and
payment of the indemnification obligations of the Issuer set forth in this
Section 8(a), when and as the same shall become due and payable in accordance
with the terms of this Section 8(a) (and if any payments
15
made by the Company pursuant to such guarantee are subject to any withholding
tax, the Company shall gross up the payments for the withholding tax).
(b) Each Underwriter will indemnify and hold harmless the Company and
the Issuer against any losses, claims, damages or liabilities to which the
Company or the Issuer may become subject, under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in any Preliminary Prospectus, the Registration Statement or
the Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company or the Issuer by
such Underwriter through Goldman, Sachs & Co. expressly for use therein; and
will reimburse the Company and the Issuer for any legal or other expenses
reasonably incurred by the Company and the Issuer in connection with
investigating or defending any such action or claim as such expenses are
incurred.
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the written consent
of the indemnified party, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or threatened action or
claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential party
to such action or claim) unless such settlement, compromise or judgment (i)
includes an unconditional release of the indemnified party from all liability
arising out of such action or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act, by or on behalf of
any indemnified party.
(d) If the indemnification provided for in this Section 8 is unavailable
to or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received
by the Company and the Issuer on the one hand and the
16
Underwriters on the other from the offering of the Securities and the
Guarantees. If, however, the allocation provided by the immediately preceding
sentence is not permitted by applicable law or if the indemnified party failed
to give the notice required under subsection (c) above, then each indemnifying
party shall contribute to such amount paid or payable by such indemnified party
in such proportion as is appropriate to reflect not only such relative benefits
but also the relative fault of the Company and the Issuer on the one hand and
the Underwriters on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable considerations. The
relative benefits received by the Company and the Issuer on the one hand and the
Underwriters on the other shall be deemed to be in the same proportion as the
total net proceeds from the offering (before deducting expenses) received by the
Company and the Issuer bear to the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on the
cover page of the Prospectus. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company and the Issuer on the one hand or
the Underwriters on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company, the Issuer and the Underwriters agree that it would not
be just and equitable if contribution pursuant to this subsection (d) 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 which does not
take account of the equitable considerations referred to above in this
subsection (d). The amount paid or payable by an indemnified party as a result
of the losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this subsection (d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the Securities and the Guarantees underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this subsection
(d) to contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company and the Issuer under this Section 8
shall be in addition to any liability which the Company and the Issuer may
otherwise have and shall extend, upon the same terms and conditions, to each
person, if any, who controls any Underwriter within the meaning of the Act; and
the obligations of the Underwriters under this Section 8 shall be in addition to
any liability which the respective Underwriters may otherwise have and shall
extend, upon the same terms and conditions, to each officer and director of the
Company or the Issuer and to each person, if any, who controls the Company
within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase
the Securities and the Guarantees which it has agreed to purchase hereunder, you
may in your discretion arrange for you or another party or other parties to
purchase such Securities and Guarantees on the terms contained herein. If within
thirty-six hours after such default by any Underwriter you do not arrange for
the purchase of such Securities and Guarantees, then the Company and the Issuer
shall be entitled to a further period of thirty-six hours within which to
procure another party or other parties satisfactory to
17
you to purchase such Securities and Guarantees on such terms. In the event that,
within the respective prescribed periods, you notify the Company and the Issuer
that you have so arranged for the purchase of such Securities and Guarantees, or
the Company and the Issuer notify you that they have so arranged for the
purchase of such Securities and Guarantees, you or the Company and the Issuer
shall have the right to postpone the Time of Delivery for a period of not more
than seven days, in order to effect whatever changes may thereby be made
necessary in the Registration Statement or the Prospectus, or in any other
documents or arrangements, and the Company and the Issuer agrees to file
promptly any amendments to the Registration Statement or the Prospectus which in
your opinion may thereby be made necessary. The term "Underwriter" as used in
this Agreement shall include any person substituted under this Section with like
effect as if such person had originally been a party to this Agreement with
respect to such Securities and Guarantees.
(b) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Underwriter or Underwriters by you, the Company and
the Issuer as provided in subsection (a) above, the aggregate principal amount
of such Securities which remains unpurchased does not exceed one-eleventh of the
aggregate principal amount of all the Securities, then the Company and the
Issuer shall have the right to require each non-defaulting Underwriter to
purchase the principal amount of Securities which such Underwriter agreed to
purchase hereunder and, in addition, to require each non-defaulting Underwriter
to purchase its pro rata share (based on the principal amount of Securities
which such Underwriter agreed to purchase hereunder) of the Securities of such
defaulting Underwriter or Underwriters for which such arrangements have not been
made; but nothing herein shall relieve a defaulting Underwriter from liability
for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Underwriter or Underwriters by you, the Company and
the Issuer as provided in subsection (a) above, the aggregate principal amount
of Securities which remains unpurchased exceeds one-eleventh of the aggregate
principal amount of all the Securities, or if the Company and the Issuer shall
not exercise the right described in subsection (b) above to require
non-defaulting Underwriters to purchase Securities of a defaulting Underwriter
or Underwriters, then this Agreement shall thereupon terminate, without
liability on the part of any non-defaulting Underwriter, the Company or the
Issuer, except for the expenses to be borne by the Company and the Issuer and
the Underwriters as provided in Section 6 hereof and the indemnity and
contribution agreements in Section 8 hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company, the Issuer and the several Underwriters, as
set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless of
any investigation (or any statement as to the results thereof) made by or on
behalf of any Underwriter or any controlling person of any Underwriter, the
Company or the Issuer, or any officer or director or controlling person of the
Company or the Issuer, and shall survive delivery of and payment for the
Securities.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
the Company and the Issuer shall not then be under any liability to any
Underwriter except as provided in Sections 6 and 8 hereof; but, if for any other
reason, the Securities are not delivered by or on behalf of the Issuer as
provided herein, the Company and the Issuer will reimburse the Underwriters
through you for all out-of-pocket expenses approved in writing by you, including
fees and disbursements of counsel, reasonably incurred by the Underwriters in
making preparations for the purchase, sale and delivery of
18
the Securities, but the Company and the Issuer shall then be under no further
liability to any Underwriter except as provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by Goldman, Sachs & Co. on behalf of you as the
representatives.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives in care of Goldman, Sachs &
Co., 85 Broad Street, New York, New York 10004, Attention: Registration
Department; and if to the Company shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: Secretary; provided, however, that any notice
to an Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by
mail, telex or facsimile transmission to such Underwriter at its address set
forth in its Underwriters' Questionnaire, or telex constituting such
Questionnaire, which address will be supplied to the Company and the Issuer by
you upon request. Any such statements, requests, notices or agreements shall
take effect upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Company, the Issuer and, to the extent
provided in Sections 8 and 10 hereof, the officers and directors of the Company
and the Issuer and each person who controls the Company or the Issuer or any
Underwriter, and their respective heirs, executors, administrators, successors
and assigns, and no other person shall acquire or have any right under or by
virtue of this Agreement. No purchaser of any of the Securities and the
Guarantees from any Underwriter shall be deemed a successor or assign by reason
merely of such purchase.
14. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such respective counterparts shall together constitute one and
the same instrument.
19
If the foregoing is in accordance with your understanding, please sign
and return to us eight counterparts hereof, and upon the acceptance hereof by
you, on behalf of each of the Underwriters, this letter and such acceptance
hereof shall constitute a binding agreement between each of the Underwriters,
the Company and the Issuer. It is understood that your acceptance of this letter
on behalf of each of the Underwriters is pursuant to the authority set forth in
a form of Agreement among Underwriters, the form of which shall be submitted to
the Company and the Issuer for examination upon request, but without warranty on
your part as to the authority of the signers thereof.
Very truly yours,
MILLENNIUM AMERICA INC.
By: ......................................
Name:
Title:
MILLENNIUM CHEMICALS INC.
By: ......................................
Name:
Title:
Accepted as of the date hereof:
Goldman, Sachs & Co.
Bear, Stearns & Co. Inc.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
J.P. Morgan Securities Inc.
Salomon Brothers Inc
By: ...........................................
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
20
SCHEDULE I
(A) (B)
PRINCIPAL PRINCIPAL
AMOUNT OF AMOUNT OF
NOTES DEBENTURES
TO BE TO BE
UNDERWRITER PURCHASED PURCHASED
--------- ---------
Goldman, Sachs & Co. ..................................... $ $
Bear, Stearns & Co. Inc. .................................
Merrill Lynch, Pierce, Fenner & Smith
Incorporated..................................
J.P. Morgan Securities Inc. ..............................
Salomon Brothers Inc .....................................
Total...................................... ------------ ------------
$ $
============ ============
21
ANNEX I(a)
Pursuant to Section 7(e) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect
to the Company and its subsidiaries within the meaning of the Act and
the applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules (and, if applicable,
financial forecasts and/or pro forma financial information) examined by
them and included in the Prospectus or the Registration Statement comply
as to form in all material respects with the applicable accounting
requirements of the Act and the related published rules and regulations
thereunder; and, if applicable, they have made a review in accordance
with standards established by the American Institute of Certified Public
Accountants of the unaudited consolidated interim financial statements,
selected financial data, pro forma financial information, financial
forecasts and/or condensed financial statements derived from audited
financial statements of the Company for the periods specified in such
letter, as indicated in their reports thereon, copies of which have been
separately furnished to the Underwriters;
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants of
the unaudited condensed consolidated statements of income, consolidated
balance sheets and consolidated statements of cash flows included in the
Prospectus as indicated in their reports thereon copies of which have
been separately furnished to the Underwriters and on the basis of
specified procedures including inquiries of officials of the Company who
have responsibility for financial and accounting matters regarding
whether the unaudited condensed consolidated financial statements
referred to in paragraph (vi)(A)(i) below comply as to form in all
material respects with the applicable accounting requirements of the Act
and the related published rules and regulations, nothing came to their
attention that cause them to believe that the unaudited condensed
consolidated financial statements do not comply as to form in all
material respects with the applicable accounting requirements of the Act
and the related published rules and regulations;
(iv) The unaudited selected financial information with respect to
the consolidated results of operations and financial position of the
Company for the five most recent fiscal years included in the Prospectus
agrees with the corresponding amounts (after restatements where
applicable) in the audited consolidated financial statements for such
five fiscal years;
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K and
on the basis of limited procedures specified in such letter nothing came
to their attention as a result of the foregoing procedures that caused
them to believe that this information does not conform in all material
respects with the disclosure requirements of Items 301, 302, 402 and
503(d), respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available interim
financial statements of the Company and its subsidiaries, inspection of
the minute books of the Company and its subsidiaries since the date of
the latest audited financial statements included in the Prospectus,
inquiries of officials of the Company and its subsidiaries responsible
for financial and accounting matters and such other inquiries and
procedures as may be specified in such letter, nothing came to their
attention that caused them to believe that:
(A) (i) the unaudited consolidated statements of income,
consolidated balance sheets and consolidated statements of cash
flows included in the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements of
the Act and the related published rules and regulations, or (ii)
any material modifications should be made to the unaudited
condensed consolidated statements of income, consolidated balance
sheets and consolidated statements of cash flows included in the
Prospectus for them to be in conformity with generally accepted
accounting principles;
(B) any other unaudited income statement data and balance
sheet items included in the Prospectus do not agree with the
corresponding items in the unaudited consolidated financial
statements from which such data and items were derived, and any
such unaudited data and items were not determined on a basis
substantially consistent with the basis for the corresponding
amounts in the audited consolidated financial statements included
in the Prospectus;
(C) the unaudited financial statements which were not included
in the Prospectus but from which were derived any unaudited
condensed financial statements referred to in Clause (A) and any
unaudited income statement data and balance sheet items included
in the Prospectus and referred to in Clause (B) were not
determined on a basis substantially consistent with the basis for
the audited consolidated financial statements included in the
Prospectus;
(D) any unaudited pro forma consolidated condensed financial
statements included in the Prospectus do not comply as to form in
all material respects with the applicable accounting requirements
of the Act and the published rules and regulations thereunder or
the pro forma adjustments have not been properly applied to the
historical amounts in the compilation of those statements;
(E) as of a specified date not more than five days prior to
the date of such letter, there have been any changes in the
consolidated capital stock (other than issuances of capital stock
upon exercise of options and stock appreciation rights, upon
earn-outs of performance shares and upon conversions of
convertible securities, in each case which were outstanding on
the date of the latest financial statements included in the
Prospectus) or any increase in the consolidated long-term debt of
the Company and its subsidiaries, or any decreases in
consolidated net current assets or stockholders' equity or other
items specified by the Underwriters, or any increases in any
items specified by the Underwriters, in each case as compared
with amounts shown in the
latest balance sheet included in the Prospectus, except in each
case for changes, increases or decreases which the Prospectus
discloses have occurred or may occur or which are described in
such letter; and
(F) for the period from the date of the latest financial
statements included in the Prospectus to the specified date
referred to in Clause (E) there were any decreases in
consolidated net revenues or operating profit or the total or per
share amounts of consolidated net income or other items specified
by the Underwriters, or any increases in any items specified by
the Underwriters, in each case as compared with the comparable
period of the preceding year and with any other period of
corresponding length specified by the Underwriters, except in
each case for decreases or increases which the Prospectus
discloses have occurred or may occur or which are described in
such letter; and
(vii) In addition to the examination referred to in their report(s)
included in the Prospectus and the limited procedures, inspection of
minute books, inquiries and other procedures referred to in paragraphs
(iii) and (vi) above, they have carried out certain specified
procedures, not constituting an examination in accordance with generally
accepted auditing standards, with respect to certain amounts,
percentages and financial information specified by the Underwriters,
which are derived from the general accounting records of the Company and
its subsidiaries, which appear in the Prospectus, or in Part II of, or
in exhibits and schedules to, the Registration Statement specified by
the Underwriters, and have compared certain of such amounts, percentages
and financial information with the accounting records of the Company and
its subsidiaries and have found them to be in agreement.
ANNEX I(b)
[Executed Comfort Letter to Come]
ANNEX I(c)
[Form of Bring-Down Comfort Letter to Come]
ANNEX II(a)
[Fried, Frank Opinion to Come]
ANNEX II(b)
[Weil, Gotshal Opinion to Come]
ANNEX II(c)
[Hempstead Opinion to Come]