New York, New York
To the Underwriters
named in Schedule II hereto
Dear Sirs:
Masco Corporation, a Delaware corporation (the "Company"), proposes to
issue its Securities described in Schedule I hereto (the "Securities") to be
issued pursuant to the provisions of the Indenture relating thereto listed in
Schedule I hereto (the "Indenture"), between the Company and the Trustee named
in Schedule I hereto (the "Trustee"). The Company has filed with the Securities
and Exchange Commission (the "Commission"), and there has become effective, a
registration statement (the file number of which is set forth in Schedule I
hereto), including a prospectus, relating to the Securities. The registration
statement as amended to the date of this Agreement is hereinafter referred to as
the "Registration Statement", and the prospectus as amended to the date of this
Agreement (other than as amended by prospectus supplements relating to
securities other than the Securities) (the "Base Prospectus") and as amended by
a prospectus supplement (the "Prospectus Supplement") relating to the Securities
to be filed pursuant to Rule 424 under the Securities Act of 1933, as amended
(the "Act"), is hereinafter referred to as the "Prospectus" (including in each
case documents incorporated by reference). The term preliminary prospectus means
a preliminary prospectus supplement (including any amendments or supplements
thereto) specifically relating to the Securities, together with the Base
Prospectus. The term free writing prospectus has the meaning set forth in Rule
405 under the Act. The term issuer free writing prospectus has the meaning set
forth in Rule 433 under the Act. The time when sales of Securities are first
made is referred to as the "Time of Sale". The term Time of Sale Prospectus
means the Base Prospectus and preliminary prospectus, if any, together with the
term sheet as set forth in Schedule IV hereto. As used herein, the terms "Base
Prospectus", "Prospectus", "preliminary prospectus" and "Time of Sale
Prospectus" shall include in each case the documents, if any, incorporated by
reference therein. The terms "supplement", "amendment" and "amend" as used
herein shall include all documents deemed to be incorporated by reference in the
Prospectus that are filed subsequent to the date of the Base Prospectus by the
Company with the Commission pursuant to the Securities Exchange Act of 1934, as
amended (the "Exchange Act").
I.
The Company hereby agrees to sell to the several Underwriters named in
Schedule II hereto (the "Underwriters"), and the Underwriters, upon the basis of
the representations and warranties herein contained, but subject to the
conditions hereinafter stated, agree to purchase from the Company, severally and
not jointly, the principal amounts of Securities set forth opposite their names
in Schedule II hereto, less their respective amounts, if any, of Contract
Securities (as hereinafter defined), determined as provided below, at the
respective purchase prices set forth in Schedule II hereto, plus accrued
interest, if any, from the date set forth in Schedule I hereto to the date of
payment and delivery. Securities to be purchased by the Underwriters are
hereinafter called "Underwriters' Securities"; Securities to be purchased
pursuant to delayed delivery contracts as herein provided are hereinafter called
"Contract Securities".
If so indicated in Schedule I hereto, the Company hereby authorizes the
Underwriters to solicit offers to purchase Contract Securities on the terms and
subject to the conditions set forth herein pursuant to delayed delivery
contracts substantially in the form of Schedule III attached hereto but with
such changes therein as the Company may authorize or approve ("Delayed Delivery
Contracts"). Delayed Delivery Contracts are to be with institutional investors
approved by the Company and of the types set forth in the Prospectus. The
aggregate principal amount of Contract Securities shall not exceed the amount
set forth in Schedule I hereto. On the Closing Date (as defined in Article III
hereof) the Company will pay to you as compensation, for the accounts of the
Underwriters, the fees specified in Schedule I hereto in respect of all Contract
Securities. The Underwriters may pay to dealers the commission specified in
Schedule I hereto in respect of Securities for which Delayed Delivery Contracts
are arranged by such dealers. The Underwriters will not have any responsibility
in respect of the validity or the performance of Delayed Delivery Contracts.
The deduction for the Contract Securities referred to in the first
paragraph of this Article I shall become effective upon execution and delivery
by the Company and the several institutional investors of the Delayed Delivery
Contracts, and such deduction shall be in the amount which shall bear the same
proportion to the total principal amount of Contract Securities as the principal
amount of Underwriters' Securities set forth opposite the name of the respective
Underwriter bears to the aggregate principal amount of Underwriters' Securities
set forth in Schedule I hereto, except to the extent that you determine that
such deduction shall be otherwise than in such proportions and so advise the
Company in writing.
II.
The Company is advised by you that the Underwriters propose to make a
public offering of their respective portions of the Underwriters' Securities as
soon after this Agreement is entered into as in your judgment is advisable
(unless the
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timing of the offering is otherwise described in Schedule I hereto). The terms
of the public offering of the Underwriters' Securities are as specified in
Schedule I hereto.
III.
Payment for the Underwriters' Securities shall be made by wire transfer
of immediately available funds to an account specified by the Company, on the
date and at the time specified in Schedule I hereto, upon delivery to you for
the respective accounts of the several Underwriters of the Underwriters'
Securities registered in such names and in such denominations as you shall
request in writing not later than 1:30 P.M., New York City time on the second
business day prior to the date of delivery. The time and date of such payment
and delivery are herein referred to as to the Closing Date.
IV.
The several obligations of the Underwriters hereunder are subject to
the following conditions:
(a) No stop order suspending the effectiveness of the
Registration Statement shall be in effect and no proceedings
for such purpose shall be pending before or be threatened by
the Commission and there shall have been no material adverse
change (not in the ordinary course of business) in the
condition of the Company and its subsidiaries taken as a whole
from that set forth in the Registration Statement, the Time of
Sale Prospectus and the Prospectus; and you shall have
received on the Closing Date a certificate, dated the Closing
Date and signed by the Chairman of the Board, the President or
a Vice President of the Company, to the foregoing effect. The
officer making such certificate may rely upon the best of his
knowledge as to proceedings pending or threatened.
(b) You shall have received on the Closing Date an
opinion dated the Closing Date, satisfactory to you and
counsel for the Underwriters, of John R. Leekley, Senior Vice
President and General Counsel of the Company, to the effect
that:
(i) the Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware, is authorized by its certificate of incorporation to
transact the business in which it is engaged and is duly
registered and qualified to conduct the business in which it
is engaged and is in good standing in each jurisdiction in
which its failure so to register or qualify would materially
adversely affect the results of
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operations or financial condition of the Company and its
subsidiaries, taken as a whole;
(ii) all the outstanding shares of capital stock of
Masco Corporation of Indiana and Behr Holdings Corporation
have been duly authorized and validly issued and are fully
paid and non-assessable; all of the outstanding limited
liability company interests of Merillat Industries, LLC have
been duly authorized and validly issued; and all such
outstanding shares of capital stock and limited liability
company interests are owned directly or indirectly by the
Company free and clear of all liens or encumbrances;
(iii) the Indenture has been duly authorized, executed
and delivered by the Company and is a valid and binding
agreement of the Company in accordance with its terms and has
been qualified under the Trust Indenture Act of 1939, as
amended;
(iv) the Securities have been duly authorized and, when
executed and authenticated in accordance with the provisions
of the Indenture and delivered to and paid for by the
Underwriters pursuant to this Agreement (or, in the case of
Contract Securities, by institutional investors pursuant to
Delayed Delivery Contracts), will be valid and binding
obligations of the Company and will be entitled to the
benefits of the Indenture;
(v) this Agreement has been duly authorized, executed
and delivered by the Company;
(vi) the Delayed Delivery Contracts, if any, have been
duly authorized, executed and delivered by the Company and are
valid and binding agreements of the Company in accordance with
their terms;
(vii) no authorization, consent or approval of, or
registration or filing with, any governmental or public body
or regulatory authority is required on the part of the Company
for the issuance of the Securities in accordance with the
provisions of the Indenture or the sale of the Securities
pursuant to this Agreement, other than registration of the
Securities under the Act, qualification of the Indenture under
the Trust Indenture Act of 1939, as amended, and compliance
with the securities or Blue Sky laws of various jurisdictions;
(viii) the execution and delivery of the Indenture and
this Agreement, the issuance of the Securities in accordance
with the provisions of the Indenture and the sale of the
Securities pursuant to this Agreement do not result in any
violation by the Company of
4
any of the terms or provisions of any law or regulation, or of
the certificate of incorporation or Bylaws of the Company, or,
to the knowledge of such counsel, of any indenture, mortgage
or other agreement or instrument by which the Company or any
of its subsidiaries is bound;
(ix) the statements contained in the Time of Sale
Prospectus and the Prospectus under the captions "Description
of Debt Securities" and "Description of Notes" (and "Delayed
Delivery Arrangements", if any), insofar as such statements
constitute summaries of the documents or matters referred to
therein, fairly present the information called for with
respect to such documents or matters;
(x) the Company is not an "ineligible issuer" in
connection with the offering pursuant to Rules 164, 405 and
433 under the Act. The Company has not made any offer relating
to the Securities that would constitute a free writing
prospectus other than the issuer free writing prospectus
containing substantially the same terms as provided for in
Schedule IV hereto. Any such free writing prospectus as of its
issue date complied in all material respects with the
requirements of the Act and the rules and regulations
thereunder and was filed with the Commission in accordance
with the Act (to the extent required pursuant to Rule 433(d)
thereunder).
(xi) such counsel does not know of any legal or
governmental proceeding required to be described in the
Registration Statement, the Time of Sale Prospectus or the
Prospectus which is not described as required, nor of any
material contract or other material document required to be
described in the Registration Statement, the Time of Sale
Prospectus or the Prospectus or to be filed as an exhibit to
the Registration Statement which is not described or filed as
required;
(xii) the Registration Statement and the Prospectus and
any amendment or supplement thereto (except for the financial
statements and other statistical and financial data included
therein and except for supplements relating only to securities
other than the Securities, as to which such counsel need not
express an opinion) comply as to form in all material respects
with the requirements of the Act, and such counsel has no
reason to believe (A) that (except as aforesaid and except for
the Statements of Eligibility on Form T-1 furnished by the
Trustees and filed as exhibits to the Registration Statement)
the Registration Statement, as of the date of this Agreement
and as of the Closing Date, contained an untrue statement of a
material fact or omitted to state
5
a material fact required to be stated therein or necessary to
make the statements therein not misleading or (B) that (except
for the financial statements and other statistical and
financial data included therein and except for supplements
relating only to securities other than the Securities, as to
which such counsel need not express an opinion) the Time of
Sale Prospectus, as of the Time of Sale, or the Prospectus, as
of its date and as of the Closing Date, contained any untrue
statement of material fact or omitted 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; and
(xiii) such counsel believes that the documents
incorporated by reference in the Registration Statement, the
Time of Sale Prospectus and the Prospectus and any supplements
or amendments thereto (except for the financial statements and
other statistical and financial data included therein as to
which such counsel need not express an opinion) complied when
so filed as to form in all material respects with the
Securities Exchange Act of 1934, as amended (the "Exchange
Act") and the rules and regulations thereunder.
In rendering such opinion (A) such counsel may rely to the
extent such counsel deems appropriate on the opinion of other counsel
reasonably satisfactory to you and (B) with respect to clauses (xii)
and (xiii) of this paragraph (b), such counsel may state that his
opinion and belief is based upon his participation in the preparation
of the Registration Statement, the Time of Sale Prospectus, and the
Prospectus and any amendment and supplement thereto and review and
discussion of the contents thereof, but without independent check or
verification except as specified in such opinion.
(c) You shall have received on the Closing Date an
opinion, dated the Closing Date, of Davis Polk & Wardwell,
counsel for the Underwriters, as to the matters referred to in
clauses (iii), (iv), (v), (ix) and (xii) of the foregoing
paragraph (b), provided that with respect to clause (xii) of
the foregoing paragraph (b) such counsel may state that their
opinion and belief are based upon their participation in the
preparation of the Registration Statement, the Time of Sale
Prospectus, and the Prospectus and any amendments or
supplements thereto (other than documents incorporated by
reference) and review and discussion of the contents thereof
(including documents incorporated by reference), but without
independent check or verification except as specified in such
opinion.
6
(d) You shall have received a letter addressed to you
and dated the Closing Date of PricewaterhouseCoopers LLP, an
independent registered public accounting firm, 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.
(e) The Company shall not have failed on or prior to the
Closing Date to have performed or complied with any of the
agreements herein contained and required to be performed or
complied with by it on or prior to the Closing Date, and all
of the representations and warranties of the Company contained
herein shall be true and correct in all material respects on
and as of the date hereof and as of the Closing Date as if
made on and as of the Closing Date.
V.
In further consideration of the agreements of the Underwriters herein
contained, the Company covenants as follows:
(a) To furnish to each of you without charge two copies
of the Registration Statement (including exhibits and
documents incorporated by reference) and, during the period
mentioned in paragraph (c) below, as many copies of the
Prospectus and any amendments or supplements thereto prepared
pursuant to paragraph (c) below as you may reasonably request.
(b) To prepare and file (or mail for filing) with the
Commission pursuant to Rule 424 under the Act, as promptly as
practicable after the execution of this Agreement, a
prospectus supplement setting forth such information as is
necessary so that the Prospectus, when delivered to a
purchaser of the Securities, will comply with law and, before
amending the Registration Statement or supplementing the Time
of Sale Prospectus or the Prospectus with respect to the
Securities, to furnish you a copy of each such proposed
amendment or supplement.
(c) If the Time of Sale Prospectus is being used to
solicit offers to buy the Securities at a time when the
Prospectus is not yet available to prospective purchasers and
any event shall occur 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
existing at the time, not misleading, or if any event shall
occur as a result of which any
7
free writing prospectus included as part of the Time of Sale
Prospectus conflicts with the information contained in the
Registration Statement then on file, the Company shall
forthwith prepare and furnish, at its expense, to the
Underwriters and to the dealers (whose names and addresses you
will furnish to the Company), 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 existing at the time,
be misleading or so that any free writing prospectus which is
included as part of the Time of Sale Prospectus, as amended or
supplemented, will no longer conflict with the Registration
Statement.
(d) If, during such period after the first date of the
public offering of the Securities as in the opinion of your
counsel a prospectus is required by law to be delivered in
connection with sales by an Underwriter or dealer (including
in circumstances where no physical delivery is required
pursuant to Rule 172), any event shall occur as a result of
which it is necessary to amend or supplement the Prospectus in
order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser,
not misleading, or if it is necessary to amend or supplement
the Prospectus to comply with law, forthwith to prepare, file
with the Commission (if required) and furnish, at its own
expense, to the Underwriters and to the dealers (whose names
and addresses you shall furnish to the Company) to which
Securities may have been sold by you on behalf of the
Underwriters and to any other dealers upon request, either
amendments or supplements to the Prospectus so that the
statements in the Prospectus as so amended or supplemented
will not, in the light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading or so
that the Prospectus will comply with law.
(e) To endeavor to qualify the Securities for offer and
sale under the securities or Blue Sky laws of such
jurisdictions as you shall reasonably request and to pay all
expenses (including fees and disbursements of counsel) in
connection with such qualification and in connection with the
determination of the eligibility of the Securities for
investment under the laws of such jurisdictions as you may
designate; provided that the Company shall not be required to
qualify to do business in any jurisdiction where it is not now
qualified or to take any action which would make it subject to
general or unlimited service of process in any jurisdiction
where it is not now so subject.
8
(f) To make generally available to its security holders
as soon as practicable an earnings statement (which need not
be audited) covering a twelve-month period beginning with the
first calendar quarter after the date of this Agreement which
shall satisfy the provisions of Section 11(a) of the Act.
(g) To notify you not less than 48 hours prior to the
Closing Date of the principal amount of Contract Securities.
(h) Not to offer, sell, contract to sell or otherwise
dispose of for cash any debt securities of the Company
substantially similar to the Securities during the period
beginning on the date of this Agreement as indicated on
Schedule I hereto and continuing to and including the Closing
Date, without your prior written consent.
VI.
The Company represents and warrants to each Underwriter that (a) each
document filed by the Company pursuant to the Exchange Act which is incorporated
by reference in the Time of Sale Prospectus or the Prospectus complied when so
filed in all material respects with the Exchange Act and the rules and
regulations thereunder, and each document, if any, hereafter filed and so
incorporated by reference in the Time of Sale Prospectus or the Prospectus will
comply when so filed in all material respects with the Exchange Act and such
rules and regulations; (b) the Registration Statement, the Time of Sale
Prospectus and the Prospectus comply, and the Registration Statement, the Time
of Sale Prospectus and the Prospectus (and any amendments and supplements
thereto, other than supplements relating only to securities other than the
Securities) will on the Closing Date comply, in all material respects with the
Act and the applicable rules and regulations of the Commission thereunder; (c)
each preliminary prospectus, if any, relating to the Securities filed pursuant
to Rule 424 under the Act complied when so filed in all material respects with
the Act and the applicable rules and regulations thereunder; (d) each part of
the Registration Statement at the time such part became effective and as of the
date of the prospectus supplement relating to the Securities 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 not misleading,
and the Time of Sale Prospectus, as of the Time of Sale, did not and on the
Closing Date, will not, and the Prospectus (as amended or supplemented, other
than by supplements relating only to securities other than the Securities), as
of its date, did not, and on the Closing Date, will not contain any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; except that these representations and warranties do
not apply to statements or omissions in the Registration Statement, the Time of
Sale Prospectus or the Prospectus based upon information furnished to the
Company in writing by or on behalf of any
9
Underwriter expressly for use therein or contained in the Statement of
Eligibility on Form T-1 furnished by the Trustee and filed as an exhibit to the
Registration Statement; and (e) the Company and each of its subsidiaries
maintain a system of internal accounting controls sufficient to provide
reasonable assurances that (1) transactions are executed in accordance with
management's general or specific authorization; (2) transactions are recorded as
necessary to permit preparation of financial statements in conformity with GAAP
and to maintain accountability for assets; (3) access to assets is permitted
only in accordance with management's general or specific authorization; and (4)
the recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences; and except as described in the Prospectus, (I) since June 30, 2006,
nothing has come to the attention of management that would lead management to
believe that a material weakness has existed at any time thereafter, and (II)
since June 30, 2006, nothing has come to the attention of management that would
lead management to believe that a change has occurred which has materially
affected, or is reasonably likely to materially affect, the Company's internal
control over financial reporting.
The Company acknowledges and agrees that (a) the purchase and sale of
the Securities pursuant to this Agreement, including the determination of the
public offering price of the Securities and any related discounts and
commissions, is an arm's-length commercial transaction between the Company, on
the one hand, and the several Underwriters, on the other hand, (b) in connection
with the offering contemplated hereby and the process leading to such
transaction each Underwriter is and has been acting solely as a principal and is
not an agent or fiduciary of the Company, or its stockholders, creditors,
employees or any other party, (c) no Underwriter has assumed or will assume an
advisory or fiduciary responsibility in favor of the Company with respect to the
offering contemplated hereby or the process leading thereto (irrespective of
whether such Underwriter has advised or is currently advising the Company on
other matters) and no Underwriter has any obligation to the Company with respect
to the offering contemplated hereby except the obligations expressly set forth
in this Agreement, (d) the Underwriters and their respective affiliates may be
engaged in a broad range of transactions that involve interests that differ from
those of the Company, and (e) the Underwriters have not provided any legal,
accounting, regulatory or tax advice with respect to the offering contemplated
hereby and the Company has consulted its own legal, accounting, regulatory and
tax advisors to the extent it deemed appropriate.
The Company agrees that, unless it has or shall have obtained the prior
written consent of the representatives set forth in Schedule I hereto (the
"Representatives"), and each Underwriter, severally and not jointly, agrees with
the Company that, unless it has or shall have obtained, as the case may be, the
prior written consent of the Company, it has not made and will not make any
offer relating to the Securities that would constitute an Issuer Free Writing
Prospectus or that would otherwise constitute a "free writing prospectus" (as
defined in Rule 405) required to be filed by the Company with the Commission or
retained by the
10
Company under Rule 433, other than a free writing prospectus containing the
information contained in the final term sheet, as set forth in Schedule IV
hereto; provided that the prior written consent of the parties hereto shall be
deemed to have been given in respect of the Free Writing Prospectus included in
Schedule IV hereto. Any such free writing prospectus consented to by the
Representatives or the Company is hereinafter referred to as a "Permitted Free
Writing Prospectus." The Company agrees that (x) it has treated and will treat,
as the case may be, each Permitted Free Writing Prospectus as an Issuer Free
Writing Prospectus and (y) it has complied and will comply, as the case may be,
with the requirements of Rules 164 and 433 applicable to any Permitted Free
Writing Prospectus, including in respect of timely filing with the Commission,
legending and record-keeping.
The Company agrees to indemnify and hold harmless each Underwriter, and
each person, if any, controlling any Underwriter within the meaning of Section
15 of the Act or Section 20 of the Exchange Act, against any and all losses,
claims, damages, liabilities and reasonable expenses (including reasonable costs
of investigation) arising out of or based upon any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement, the
Time of Sale Prospectus (as amended or supplemented), any issuer free writing
prospectus that the Company has filed or is required to file under Rule 433(d)
under the Act or the Prospectus, or in any amendment or supplement thereto (if
used within the period referred to in paragraph (c) of Article V hereof), or in
any preliminary prospectus or arising out of or based upon any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages, liabilities or expenses are caused by any such
untrue statement or omission or allegation thereof which has been made therein
or omitted therefrom in reliance upon and in conformity with information (a)
furnished in writing to the Company by or on behalf of any Underwriter expressly
for use therein or (b) contained in the Statement of Eligibility and
Qualification on Form T-1 furnished by the Trustee and filed as an exhibit to
the Registration Statement.
If any action or claim shall be brought or asserted against any
Underwriter or any person so controlling an Underwriter in respect of which
indemnity may be sought from the Company, such Underwriter or controlling person
shall promptly notify the Company in writing, and the Company shall assume the
defense thereof, including the employment of counsel and the payment of all
expenses. Any Underwriter or any such controlling person shall have the right to
employ separate counsel in any such action and to participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
such Underwriter or such controlling person unless (a) the employment thereof
has been specifically authorized by the Company in writing, (b) the Company has
failed to assume the defense and employ counsel or (c) the named parties to any
such action (including any impleaded parties) include both such Underwriter or
such controlling person and the Company and such Underwriter or such controlling
person shall have
11
been advised by such counsel that there are one or more material legal defenses
available to it which are different from or additional to those available to the
Company (in which case the Company shall not have the right to assume the
defense of such action on behalf of such Underwriter or such controlling person,
it being understood, however, that the Company shall not, in connection with any
one such action or separate but substantially similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances,
be liable for the reasonable fees and expenses of more than one separate firm of
attorneys (other than local counsel, if required), at any time for all such
Underwriters and controlling persons, which firm shall be designated in writing
by you, and that all such reasonable fees and expenses shall be reimbursed as
they are incurred). The Company shall not be liable for any settlement of any
such action effected without its written consent, but if settled with the
written consent of the Company, or if there be a final judgment for the
plaintiff in any such action, the Company agrees to indemnify and hold harmless
any Underwriter and any such controlling person from and against any loss or
liability by reason of such settlement or judgment.
Each Underwriter agrees to indemnify and hold harmless the Company and
its directors and officers, and each person, if any, controlling any such person
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act to
the same extent in the foregoing indemnity from the Company to each Underwriter,
but only with respect to information relating to such Underwriter furnished to
the Company in writing by it, or on its behalf, expressly for use in the
Registration Statement, any preliminary prospectus, the Time of Sale Prospectus,
any issuer free writing prospectus, the Prospectus, or in any amendment or
supplement thereto. In case any action or claim shall be brought against the
Company or its directors or officers or any such controlling person in respect
of which indemnity may be sought against any Underwriter, such Underwriter shall
have the rights and duties given to the Company, and the Company or its
directors or officers or any such controlling person shall have the rights and
duties given to the Underwriters by the preceding paragraph.
If the indemnification provided for in this Article VI is unavailable
to an indemnified party under the fourth or sixth paragraph of this Article VI
in respect of any losses, claims, damages, liabilities or expenses referred to
therein, then each indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses (a) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriters on the other from the offering of
the Securities or (b) if the allocation provided by clause (a) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (a) above but also the relative
fault of the Company on the one hand and of the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits
12
received by the Company on the one hand and the Underwriters on the other shall
be deemed to be in the same proportion as the total net proceeds from the
offering of Securities (before deducting expenses) received by the Company bear
to the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault of the Company on the one hand and of the
Underwriters on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
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 Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Article VI were to be determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities and expenses referred to in the immediately
preceding paragraph 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 defending any such action or claim. Notwithstanding the
provisions of this Article VI, no Underwriter shall be required to contribute
any amount in excess of the amount by which the total price at which the
Securities underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages which such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to this
Article VI are several in proportion to their respective underwriting
obligations and not joint.
The indemnity and contribution agreements contained in this Article VI
and the representations and warranties of the Company set forth in this
Agreement shall remain operative and in full force and effect, regardless of (a)
any investigation made by or on behalf of any person, (b) acceptance of any
Securities and payment therefor hereunder and (c) any termination of this
Agreement. A successor of any Underwriter or of the Company or of its directors
and officers or of any such controlling person, as the case may be, shall be
entitled to the benefits of the indemnity, reimbursement and contribution
agreements contained in this Article VI.
VII.
In the event that on or prior to the Closing Date, (a) trading on the
New York Stock Exchange or the American Stock Exchange shall have been wholly
13
suspended, (b) minimum or maximum prices for trading shall have been fixed, or
maximum ranges for prices for securities shall have been required, on the New
York Stock Exchange or the American Stock Exchange, by the New York Stock
Exchange or the American Stock Exchange or by order of the Commission or any
other governmental authority having jurisdiction, (c) a banking moratorium shall
have been declared by Federal or New York authorities, (d) a material disruption
shall have occurred in commercial banking or securities settlement or clearance
services in the United States or (e) an outbreak or escalation of hostilities or
a declaration by the United States of a national emergency or war or other
calamity or crisis shall have occurred since the execution of this Agreement
which, in your judgment, makes it impractical or inadvisable to proceed with the
completion of the sale of or any payment for the Securities, this Agreement and
all obligations of the Underwriters hereunder may be canceled at, or any time
prior to, the Closing Date by you, without liability on the part of any
Underwriter to the Company. Notice of such cancellation may be given to the
Company by telegraph or telephone but shall be subsequently confirmed by letter.
VIII.
If any of you shall fail or refuse to purchase Underwriters' Securities
which you have agreed to purchase hereunder, and the aggregate principal amount
of Underwriters' Securities which such defaulting Underwriter agreed but failed
or refused to purchase is not more than one-tenth of the aggregate principal
amount of Securities, the other Underwriters shall be obligated, in the
proportions which the principal amount of Securities set forth opposite their
names in Schedule II hereto bears to the aggregate principal amount of
Securities, or in such other proportions as you may specify, to purchase the
Underwriters' Securities which such defaulting Underwriter agreed but failed or
refused to purchase; provided, that in no event shall the principal amount of
Securities which any Underwriter has agreed to purchase pursuant to Article I of
this Agreement be increased pursuant to this paragraph by an amount in excess of
one-ninth of such principal amount of Securities without the written consent of
such Underwriter. If any of you shall fail or refuse to purchase Underwriters'
Securities and the aggregate principal amount of Underwriters' Securities with
respect to which such default occurs is more than said one-tenth of the
aggregate principal amount of Securities and arrangements satisfactory to you
and the Company for the purchase of such Underwriters' Securities are not made
within 36 hours after such default, this Agreement will 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 and the Prospectus or any other
documents or arrangements may be effected. Any action taken under this paragraph
shall not relieve any defaulting Underwriter from liability in respect of any
default of any such Underwriter under this Agreement.
14
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 transactions contemplated hereby.
The Agreement herein set forth has been and is made solely for the
benefit of the several Underwriters and the Company and of the controlling
persons, directors and officers referred to in Article VI hereof and their
respective successors and assigns or personal representatives, and no other
person shall acquire or have any right under or by virtue of this Agreement. The
terms "successor" or "successors and assigns" as used in this Agreement shall
not include a purchaser of any of the Securities from any of the several
Underwriters in his or its status as such purchaser.
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.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
15
Very truly yours,
MASCO CORPORATION
By: /s/ Richard A. Manoogian
-------------------------------------
Name: Richard A. Manoogian
Title: Chairman of the Board and
Chief Executive Officer
Accepted, as of the date set
forth in Schedule I hereto
Acting on behalf of themselves and the several Underwriters named in Schedule II
hereto.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:/s/ David Portugal
--------------------------------------------
Name: David Portugal
Title: Vice President
CITIGROUP GLOBAL MARKETS INC.
By:/s/ Jack D. McSpadden, Jr.
--------------------------------------------
Name: Jack D. McSpadden, Jr.
Title: Managing Director
J.P. MORGAN SECURITIES INC.
By:/s/ Maria Sramek
----------------------------------------
Name: Maria Sramek
Title: Vice President
16
SCHEDULE I
Underwriting Agreement dated September 28, 2006
Registration Statement No. 333-100641
Representatives and addresses: Merrill Lynch, Pierce, Fenner & Smith
Incorporated
4 World Financial Center
New York, NY 10080
Citigroup Global Markets Inc.
388 Greenwich Street
New York, NY 10013
J.P. Morgan Securities Inc.
270 Park Avenue
New York, NY 10017
Title of Securities: 6.125% Notes Due 2016
Principal Amount of Securities: $1,000,000,000
Title of Indenture: Indenture dated as of February 12, 2001 between Masco Corporation and
J.P. Morgan Trust Company, National Association as successor in
interest to Bank One Trust Company, as Trustee
Trustee: J.P. Morgan Trust Company, National Association (effective October 1,
2006, The Bank of New York Trust Company, N.A., will become successor
in interest to J.P. Morgan Trust Company, National Association)
Maturity: October 3, 2016
Redemption Provisions: The Securities will be subject to make-whole redemption as set forth
in the supplement dated September 28, 2006 to the preliminary prospectus
supplement dated September 28, 2006 relating to the Securities.
Interest Rate: 6.125%
Interest Payment Dates: April 3 and October 3 of each year, commencing April 3, 2007
Change of Control Put: The Securities will be subject to a change of control repurchase event
as set forth in the supplement dated September 28, 2006 to the
preliminary prospectus supplement dated September 28, 2006 relating to
the Securities.
Other principal terms, if any: The Securities will be subject to defeasance and covenant defeasance
as provided in the Indenture
Purchase Price: 98.841% of the principal amount of the Securities, plus accrued
interest, if any, on the Securities from October 3, 2006
The Underwriters' Securities are to be offered to the public at the Public Offering Price specified below, and to dealers
at prices which represent concessions not in excess of the Dealer Concession set forth below, and any Underwriter may
allow and such dealers may reallow concessions not in excess of the Reallowance Concession set forth below.
Public Offering Price: 99.491% of the principal amount of the Securities, plus accrued
interest, if any, on the Securities from October 3, 2006
Dealer Concession: 0.28% of the principal amount of the Securities
Reallowance Concession: 0.28% of the principal amount of the Securities
Closing: Davis Polk & Wardwell, 450 Lexington Ave, New York, New York, 10017,
at 10:00 AM, Eastern time, on October 3, 2006
2
The foregoing terms set forth on this Schedule I are hereby confirmed.
MASCO CORPORATION
By: /s/ Richard A. Manoogian
-------------------------------------
Name: Richard A. Manoogian
Title: Chairman of the Board and
Chief Executive Officer
The foregoing terms set forth on this Schedule I are hereby confirmed.
Acting on behalf of themselves and the several Underwriters named in Schedule II
hereto.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:/s/ David Portugal
--------------------------------------------
Name: David Portugal
Title: Vice President
CITIGROUP GLOBAL MARKETS INC.
By:/s/ Jack D. McSpadden, Jr.
--------------------------------------------
Name: Jack D. McSpadden, Jr.
Title: Managing Director
J.P. MORGAN SECURITIES INC.
By:/s/ Maria Sramek
----------------------------------------
Name: Maria Sramek
Title: Vice President
3
SCHEDULE II
PRINCIPAL
UNDERWRITER AMOUNT
----------- ------
Merrill Lynch, Pierce, Fenner & Smith
Incorporated..................................................... $320,000,000
Citigroup Global Markets Inc. ................................................... $300,000,000
J.P. Morgan Securities Inc. ..................................................... $300,000,000
Banc of America Securities LLC................................................... $10,000,000
BNP Paribas Securities Corp. .................................................... $10,000,000
Comerica Securities, Inc. ....................................................... $10,000,000
Daiwa Securities America Inc. ................................................... $10,000,000
KeyBanc Capital Markets,
a division of McDonald Investments, Inc. ............................... $10,000,000
Lazard Capital Markets LLC....................................................... $10,000,000
RBC Capital Markets Corporation ................................................. $10,000,000
Sun Trust Capital Markets, Inc. ................................................. $10,000,000
--------------
Total................................................................... $1,000,000,000
==============
SCHEDULE III
Not applicable.
2
SCHEDULE IV
Term Sheet
3
Filed Pursuant to Rule 433
Registration No. 333-100641
Term Sheet
September 28, 2006
MASCO CORPORATION
$1,000,000,000 6.125% NOTES DUE 2016
ISSUER: Masco Corporation
TITLE OF SECURITIES: 6.125% Notes due 2016
RATINGS: Baa1 by Moody's Investors Service, Inc and BBB+
by Standard & Poor's Rating Services
TRADE DATE: September 28, 2006
SETTLEMENT DATE (T+3): October 3, 2006
MATURITY DATE: October 3, 2016
AGGREGATE PRINCIPAL AMOUNT OFFERED: $1,000,000,000
PRICE TO PUBLIC (ISSUE PRICE): 99.491%
BENCHMARK: UST 4.875% due August 15, 2016
BENCHMARK TREASURY YIELD: 4.614%
SPREAD TO TREASURY: 158 basis points
INTEREST RATE: 6.125% per annum
INTEREST PAYMENT DATES: Semi-annually on each April 3 and October 3;
commencing on April 3, 2007
DENOMINATIONS: $1,000 by $1,000
OPTIONAL REDEMPTION: Make-whole call at any time at the greater of
100% of the principal amount of the notes being
redeemed or discounted present value at the
treasury rate plus 25 basis points
JOINT BOOKRUNNERS: Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Citigroup Global Markets Inc. and
J.P. Morgan Securities Inc.
CO-MANAGERS: Banc of America Securities LLC, BNP Paribas
Securities Corp., Comerica Securities, Inc.,
Daiwa Securities America Inc., KeyBanc Capital
Markets, a division of McDonald Investments,
Inc., Lazard Capital Markets LLC, RBC Capital
Markets Corporation and SunTrust Capital
Markets, Inc.
CUSIP: 574599BD7
THE ISSUER HAS FILED A REGISTRATION STATEMENT (INCLUDING A PROSPECTUS) WITH THE
SEC FOR THE OFFERING TO WHICH THIS COMMUNICATION RELATES. BEFORE YOU INVEST, YOU
SHOULD READ THE PROSPECTUS IN THAT REGISTRATION STATEMENT AND OTHER DOCUMENTS
THE ISSUER HAS FILED WITH THE SEC FOR MORE COMPLETE INFORMATION ABOUT THE ISSUER
AND THIS OFFERING. YOU MAY GET THESE DOCUMENTS FOR FREE BY VISITING EDGAR ON THE
SEC WEB SITE AT WWW.SEC.GOV. ALTERNATIVELY, THE ISSUER, ANY UNDERWRITER OR ANY
DEALER PARTICIPATING IN THE OFFERING WILL ARRANGE TO SEND YOU THE PROSPECTUS IF
YOU REQUEST IT BY CALLING MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
TOLL-FREE AT 1-866-500-5408, CITIGROUP GLOBAL MARKETS INC. TOLL-FREE AT 1-877-
858-5407 OR J.P. MORGAN SECURITIES INC. AT 1-212-834-4533.
ANY DISCLAIMERS OR OTHER NOTICES THAT MAY APPEAR BELOW ARE NOT APPLICABLE TO
THIS COMMUNICATION AND SHOULD BE DISREGARDED. SUCH DISCLAIMERS OR OTHER NOTICES
WERE AUTOMATICALLY GENERATED AS A RESULT OF THIS COMMUNICATION BEING SENT VIA
BLOOMBERG OR ANOTHER EMAIL SYSTEM.