EXHIBIT 1.4
VARITY CORPORATION
MEDIUM-TERM NOTES
AGENCY AGREEMENT
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__________, 199_
[Names and Addresses of Agents]
Dear Sirs:
Varity Corporation, a Delaware corporation (the
"Company"), confirms its agreement with [Name of Agents] (each
an "Agent" and collectively, the "Agents") with respect to the
issue and sale from time to time by the Company of up to
$________ aggregate principal amount of its Medium-Term Notes
(the "Notes"). The Notes are registered under the registration
statement referred to in Section 1 hereof. The Notes will be
issued as a series under an indenture (as amended or
supplemented, the "Indenture"), dated as of ______________, as
supplemented from time to time, between the Company and
Manufacturers and Traders Trust Company, as trustee (the
"Trustee"). The Notes shall have the designations,
denominations, interest rates, payment dates, maturities,
redemption provisions, selling prices and other terms set forth
in the Prospectus referred to in Section 1 as it may be
supplemented from time to time. The Notes will be issued, and
the terms thereof established, from time to time by the Company
in accordance with the Indenture, the Notes and the Procedures
(as defined in Section 2(d) hereof).
1. Registration Statement and Prospectus. The
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Company and Kelsey-Hayes Company, a subsidiary of the Company,
have prepared and filed with the Securities and Exchange
Commission (the "Commission"), in accordance with the
provisions of the Securities Act of 1933, as amended, and the
rules and regulations of the Commission thereunder
(collectively, the "Act"), a joint registration statement on
Form S-3 (the "registration statement"), including a prospectus
relating to the Notes. The term "Registration Statement," as
used in this Agreement, means the registration statement
(including all financial schedules and exhibits), as amended at
the time it becomes effective, and as thereafter amended by any
post-effective amendment at the date hereof. The term "Prospectus"
as used in this Agreement means the prospectus in the
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form included in the Registration Statement, as supplemented to
reflect the terms of the Notes and the plan of distribution
thereof, in the form in which it shall be filed with the Commission
pursuant to Rule 424(b). Any reference in this Agreement to the
registration statement, the Registration Statement or any
Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3
under the Act, as of the date of the registration statement, the
Registration Statement or any Prospectus, as the case may be, and
any reference to any amendment or supplement to the registration
statement, the Registration Statement or any Prospectus shall be
deemed to refer to and include any documents filed after such date
under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), which, upon filing, are incorporated by reference
therein, as required by paragraph (b) of Item 12 of Form S-3. As
used herein, the term "Incorporated Documents" means the documents
which at the time are incorporated by reference in the registration
statement, the Registration Statement, any Prospectus, or any
amendment or supplement thereto. Any reference herein to any
amendment or supplement to the Registration Statement or Prospectus
shall be deemed to include any documents incorporated by reference
in the Registration Statement, any Prospectus, or any amendment or
supplement thereto subsequent to the date hereof.
2. Appointment as Agents; Solicitations as Agents;
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Purchases as Principal. (a) Appointment of Agents. Subject
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to the terms and conditions stated herein and subject to the
reservation by the Company of the right to sell Notes directly
on its own behalf, without the consent of the Agents, the
Company hereby (i) appoints the Agents as the agents for the
purpose of soliciting purchases of the Notes from the Company
by others and (ii) agrees that whenever the Company determines
to sell Notes directly to an Agent as principal for resale to
others, it will enter into a Terms Agreement (hereafter
defined) relating to such sale in accordance with the
provisions hereof.
(b) Solicitations as Agents. On the basis of the
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representations and warranties herein contained, but subject to
the terms and conditions herein set forth, each Agent, upon
receipt of instructions from the Company, agrees, as an agent
of the Company, to use its best efforts consistent with
industry practice to solicit offers to purchase the Notes upon
the terms and conditions set forth herein and in the
Prospectus.
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The Company reserves the right, in its sole
discretion, to suspend solicitation of purchases of the Notes
through one or more of the Agents, commencing at any time for
any period of time or permanently. Upon receipt of instructions
from the Company, the Agents will forthwith suspend solicitation
of purchases of Notes from the Company until such time as the
Company has advised the Agents that such solicitation may be
resumed.
The Company agrees to pay each Agent a commission, in
the form of a discount, equal to the applicable percentage of
the price to the public of each Note sold by the Company as a
result of a solicitation made by such Agent as set forth in
Exhibit A hereto. It is understood that no commission will be
payable with respect to any offer to purchase Notes accepted by
the Company in the event that the Company tenders such Note and
delivery of such Note is not accepted by the purchaser or the
purchaser fails to make timely payment and the sale is not
consummated as a result of such failure.
The purchase price, interest rate, maturity date and
other terms of the Notes shall be agreed upon by the Company
and the applicable Agent and set forth in a pricing supplement
to the Prospectus to be prepared following each acceptance by
the Company of an offer for the purchase of Notes. Except as
may be otherwise provided in such supplement to the Prospectus,
the Notes will be issued in denominations of U.S. $10,000 or
any amount in excess thereof which is an integral multiple of
U.S. $1,000. All Notes sold through an Agent as agent will be
sold at 100% of their principal amount unless otherwise agreed
to by the Company and such Agent.
Each Agent will communicate to the Company, orally or
in writing, each offer to purchase Notes, other than those
offers rejected by such Agent. Each Agent shall have the
right, in its discretion reasonably exercised, to reject any
proposed purchase of Notes, in whole or in part, and any such
rejection shall not be deemed a breach of such Agent's
agreement contained herein. The Company may accept or reject
any proposed purchase of the Notes, in whole or in part.
In soliciting purchases of the Notes on behalf of the
Company, each Agent shall act solely as Agent for the Company
and not as principal. Each Agent shall make reasonable efforts
to assist the Company in obtaining performance by each
purchaser whose offer to purchase Notes has been solicited by
such Agent and accepted by the Company; provided that such Agent
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shall not have any liability to the Company in the event
that any such purchase is not consummated for any reason. The
Agents shall not have any obligation to purchase Notes from the
Company as principal, but an Agent may agree from time to time
to purchase Notes as principal. Any such purchase of Notes by
an Agent as principal shall be made pursuant to a Terms
Agreement in accordance with the provisions of Section 2(c)
hereof.
(c) Purchases as Principal. Each sale of Notes to
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an Agent as principal shall be made in accordance with the
terms contained herein and pursuant to a separate agreement
which will provide for the sale of such Notes to, and the
purchase and reoffering thereof by, such Agent. Each such
separate agreement (which may be an oral agreement and
confirmed in writing as described below between the applicable
Agent and the Company) is herein referred to as a "Terms
Agreement". Unless the context otherwise requires, each
reference contained herein to "this Agreement" shall be deemed
to include any applicable Terms Agreement between the Company
and the applicable Agent. Each such Terms Agreement whether
oral (and confirmed in writing, which may be by facsimile
transmission) or in writing, shall be with respect to such
information (as applicable) as is specified in Exhibit B
hereto. An Agent's commitment to purchase Notes as principal
pursuant to any Terms Agreement shall be deemed to have been
made on the basis of the representations and warranties of the
Company herein contained and shall be subject to the terms and
conditions herein set forth. Each Terms Agreement shall
specify the principal amount of Notes to be purchased by the
applicable Agent pursuant thereto, the price to be paid to the
Company for such Notes, the time and place of delivery of and
payment for such Notes, any provisions relating to rights of,
and default by purchasers acting together with the Agent in the
reoffering of the Notes, and such other provisions (including
further terms of the Notes) as may be mutually agreed upon. The
Agent may utilize a selling or dealer group in connection with
the resale of the Notes purchased. Such Terms Agreement shall
also specify the requirements for the opinions of counsel,
officers' certificate, comfort letter and stand-off agreement
pursuant to Sections 9(b), 9(c), 9(d) and 3(i), respectively,
hereof.
(d) Administrative Procedures. The Notes will be
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issued and the terms thereof established, in accordance with
the Indenture and the Medium-Term Note Administrative
Procedures attached hereto as Exhibit C (the "Procedures").
The Procedures may only be amended by written agreement of the
Company and each Agent, after notice to the Trustee.
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3. Agreements of the Company. The Company agrees
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with each Agent as follows:
(a) The Company will advise the Agents promptly and,
if requested, will confirm such advice in writing: (i) of
the filing and effectiveness of any amendment to the
Registration Statement (other than by virtue of the
Company's filing of any report to be filed under the
Exchange Act), (ii) of the transmittal to the Commission
for filing of any supplement to the Prospectus, (iii) of
any request by the Commission for amendment of or a
supplement to the Registration Statement or any Prospectus
or for additional information; (iv) upon knowledge
thereof, of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration
Statement or of the suspension of qualification of the
Offered Securities for offering or sale in any
jurisdiction or of the initiation of any proceeding for
such purpose; and (v) within the period of time referred
to in paragraph (e) below, of the happening of any event,
including the filing of any information, documents or
reports pursuant to the Exchange Act, that makes any
statement made in the Registration Statement or the
Prospectus (as then amended or supplemented) untrue or
which requires the making of any additions to or changes
in the Registration Statement or the Prospectus (as then
amended or supplemented) in order to state a material fact
required by the Act to be stated therein or necessary in
order to make the statements therein not misleading, or of
the necessity to amend or supplement the Prospectus (as
then amended or supplemented) to comply with the Act or
any other law. If at any time the Commission shall issue
any stop order suspending the effectiveness of the
Registration Statement, the Company, upon knowledge
thereof, will make every reasonable effort to obtain the
withdrawal of such order at the earliest possible time.
(b) Except as otherwise provided in Section 3(k)
hereof, the Company will not file any amendment to the
Registration Statement or supplement to the Prospectus
unless the Company has furnished the Agents with a copy
for their review prior to filing and given each Agent a
reasonable opportunity to comment on any such proposed
amendment or supplement; provided that the foregoing
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requirement shall not apply to periodic or current reports
filed under the Exchange Act, copies of which filings the
Company will cause to be delivered to each Agent promptly
after being mailed or otherwise forwarded for filing with
the Commission;
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provided, further, that the Company need only provide the
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opportunity to comment on a pricing supplement to the
particular Agent or Agents which, in the judgment of the
Company, is/are involved in the solicitation or purchase
which leads to the filing of such supplement.
(c) The Company will furnish to each Agent and to
counsel to the Agents, without charge (i) one signed copy
of the registration statement as originally filed with the
Commission and of each amendment thereto, including
financial statements and all exhibits to the Registration
Statement, and (ii) such number of conformed copies of the
Registration Statement as originally filed and of each
amendment thereto, but without exhibits, as the Agents may
reasonably request. The Company will furnish to the
Agents as many copies of the Prospectus (as amended or
supplemented) (other than an amendment or supplement which
relates exclusively to an offering of debt securities
under the Registration Statement other than the Notes) as
the Agents shall reasonably request so long as the Agents
are required to deliver a Prospectus in connection with
sales and solicitations of offers to purchase the Notes.
(d) The Company will prepare, with respect to any
Notes to be sold through or to the Agents pursuant to this
Agreement, a pricing supplement with respect to such Notes
in a form previously approved by the Agents and will file
such supplement pursuant to Rule 424(b) under the Act
within the time period prescribed.
(e) Except as otherwise provided in Section 3(k)
hereof, if during the term of this Agreement any event
shall occur that in the judgment of the Company or in the
opinion of counsel for the Agents is required to be set
forth in the Prospectus (as then amended or supplemented)
or should be set forth therein in order to make the
statements therein, in the light of the circumstances
under which they were made, not misleading, or if it is
necessary to supplement or amend the Prospectus in order
to comply with the Act or any other law, the Company shall
give immediate notice to the Agents to cease the
solicitation of offers to purchase the Notes in their
capacity as Agents and to cease sales of any Notes an
Agent may then own as principal pursuant to a Terms
Agreement, and the Company will forthwith prepare and,
subject to the provisions of paragraph (d) above, file
with the Commission an appropriate supplement or amendment
thereto, and will
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expeditiously furnish to the Agents a reasonable number of
copies thereof.
(f) The Company will cooperate with the Agents and
with counsel for the Agents in connection with the
registration or qualification of the Notes for offering
and sale under the securities or Blue Sky laws of such
jurisdictions as the Agents may reasonably designate and
will file such consents to service of process or other
documents necessary or appropriate in order to effect such
registration or qualification; provided that in no event
shall the Company be obligated to qualify to do business
in any jurisdiction where it is not now so qualified or to
take any action which would subject it to service of
process in suits, other than those arising out of the
offering or sale of the Securities, in any jurisdiction
where it is not now so subject.
(g) The Company will make generally available to its
security holders a consolidated earnings statement, which
need not be audited, covering a twelve-month period
commencing after the effective date of the Registration
Statement and ending not later than 15 months thereafter,
as soon as reasonably practicable after the end of such
period, which consolidated earnings statement shall
satisfy the provisions of Section 11(a) of the Act and
Rule 158 thereunder.
(h) The Company, during the period when the
Prospectus is required to be delivered under the Act, will
file promptly all documents required to be filed with the
Commission pursuant to Sections 13(a), 13(c), 14 or 15(d)
of the Exchange Act and will furnish each of the Agents with
copies of such documents. Except as otherwise provided in
Section 3(k) hereof, on or prior to the date on which
there shall be released to the general public interim
financial statement information related to the Company
with respect to the first three fiscal quarters of any
fiscal year or preliminary financial statement information
with respect to any fiscal year, the Company shall furnish
such information to the Agents.
(i) If required by the terms of any Terms Agreement,
between the date of any Terms Agreement and the related
Settlement Date (as defined below) specified in such
agreement, the Company will not, without the applicable
Agent's prior consent, offer, sell, contract to sell or
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otherwise dispose of debt securities of the Company having
a maturity of more than one year from the date of issue
covered by the Registration Statement or another
registration statement filed by the Company under the Act
(other than the Notes being offered pursuant to such Terms
Agreement), except that the Company may offer, sell,
contract to sell or otherwise dispose of obligations of
the Company in respect of industrial revenue bonds or
similar securities exempt from federal income taxes.
(j) The Company will apply the net proceeds from the
sale of the Notes substantially in accordance with the
description set forth in the Prospectus.
(k) The Company shall not be required to comply with
the provisions of subsections (a), (b), (c), (e) or (h) of
this Section or the provisions of Section 9 hereof during
any period from the time (i) the Agents shall have
received written notification from the Company to suspend
solicitations of purchasers of the Notes in their capacity
as agents and (ii) the earlier of the date on which no
Agent shall then hold Notes as principal purchased
pursuant to a Terms Agreement and the date which is
fifteen days (nine months with respect to subsections (e)
and (h) of this Section) from the date on which the Agents
shall have received written notice from the Company to
suspend solicitations of purchases of the Notes, to the
time the Company shall determine that solicitation of
purchases of the Notes should be resumed or shall
subsequently enter into a new Terms Agreement with the
Agents.
4. Representations and Warranties of the Company.
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The Company represents and warrants to each Agent as of the
date hereof, as of the date of each acceptance by the Company
of an offer for the purchase of Notes (whether through the
Agents as agents or to one or more of the Agents as principal),
as of the date of each delivery of Notes (whether through the
Agents as agents or to one or more of the Agents as principal)
(the date of each such delivery to one or more Agents as
principal being hereafter referred to as a "Settlement Date"),
and as of any time that the Registration Statement or the
Prospectus shall be amended or supplemented (it being
understood that such representations and warranties shall be
deemed to relate to the Registration Statement and the
Prospectus, each as amended or supplemented as of each such
date) that:
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(a) The Registration Statement and any post-
effective amendment thereto have been declared effective
by the Commission and no stop order suspending the
effectiveness of such Registration Statement has been
issued and no proceeding for that purpose has been
initiated or threatened by the Commission.
(b) Each Prospectus included as part of the
registration statement as originally filed or as part of
any amendment or supplement thereto, or filed pursuant to
Rule 424 under the Act, complied when so filed in all
material respects with the provisions of the Act 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 light of the
circumstances under which they were made, not misleading;
except that this representation and warranty does not
apply to statements in or omissions from such Prospectus
(or any amendment or supplement thereto) made in reliance
upon and in conformity with information furnished to the
Company in writing by an Agent expressly for use therein.
The Commission has not issued any order preventing or
suspending the use of any Prospectus.
(c) The Company and the transactions contemplated by
this Agreement meet the requirements for using Form S-3
under the Act. The registration statement in the form in
which it became effective and also in such form as it may
be when any post-effective amendment thereto shall become
effective and the Prospectus and any supplement or
amendment thereto when filed with the Commission under
Rule 424(b) under the Act, complied or will comply in all
material respects with the provisions of the Act and the
Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), and will not at any such times 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; except that
this representation and warranty does not apply to
statements in or omissions from the registration statement
or the Prospectus made in reliance upon and in conformity
with information furnished to the Company in writing by an
Agent expressly for use therein.
(d) The Incorporated Documents heretofore filed,
when they were filed (or, if any amendment with respect to
any such document was filed, when such amendment was
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filed), conformed in all material respects with the
requirements of the Exchange Act and the rules and
regulations thereunder; any further Incorporated Documents
so filed will, when they are filed, conform in all
material respects with the requirements of the Exchange
Act and the rules and regulations thereunder; no such
document when it was filed (or, if any amendment with
respect to any such document was filed, when such
amendment was filed), contained an untrue statement of a
material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the
statements therein not misleading; and no such further
document, when it is filed, will contain an untrue
statement of a material fact or will omit to state a
material fact required to be stated therein or necessary
in order to make the statements therein not misleading.
(e) The Company is a corporation duly organized and
validly existing in good standing under the laws of the
State of Delaware with full corporate power and authority
to own, lease and operate its properties and to conduct
its business, and is duly registered and qualified to
conduct its business and is in good standing in each
jurisdiction where the nature of its properties or the
conduct of its business requires such registration or
qualification, except where the failure so to register or
qualify does not have a material adverse effect on the
financial condition, business, properties, net worth or
results of operations of the Company and its subsidiaries
taken as a whole (a "Material Adverse Effect").
(f) Each Material Subsidiary (as defined below) is a
corporation duly organized, validly existing and in good
standing in the jurisdiction of its organization, with
full corporate power and authority to own, lease and
operate its properties and to conduct its business, except
where the failure of a Material Subsidiary to be duly
organized and existing or to have full corporate power and
authority would not have a Material Adverse Effect; each
Material Subsidiary is duly registered, qualified or
licensed to conduct its business and is in good standing
in each jurisdiction or place where the nature of its
properties or the conduct of its business requires such
registration or qualification, except where the failure so
to register, be licensed or qualify would not have a
Material Adverse Effect; all the outstanding shares of
capital stock of each Material Subsidiary have been duly
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authorized and validly issued, are fully paid and
nonassessable, and are owned by the Company directly, or
indirectly through one of its other subsidiaries, free and
clear of any lien, adverse claim, security interest,
equity, or other encumbrance; and there are no outstanding
rights, warrants or options to acquire, or instruments
convertible into or exchangeable for, shares of capital
stock or other equity interests in any Material
Subsidiary. As used herein, the term "Material
Subsidiaries" means the following subsidiaries of the
Company: Varity Holdings Limited and Perkins Group
Limited, each a corporation organized under the laws of
the United Kingdom; Dayton Walther Corporation, an Ohio
corporation; K-H Corporation, a Delaware corporation; and
Kelsey-Hayes Company, a Delaware corporation.
(g) When the Notes are issued and delivered pursuant
to this Agreement, such Notes will have been duly
authorized by the Company and, when executed by the
Company and authenticated by the applicable Trustee in
accordance with the terms of the applicable Indenture
(assuming the due authorization, execution and delivery
thereof by the Trustee thereunder), and delivered to and
paid for by the purchasers thereof, will be entitled to
the benefits of the Indenture and will constitute the
valid and binding obligations of the Company enforceable
against the Company in accordance with their terms,
subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally and subject to
general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at
law).
(h) There are no legal or governmental proceedings
pending or, to the knowledge of the Company, threatened,
against the Company or any of its subsidiaries which are
reasonably likely to have a Material Adverse Effect, or to
which the Company or any of its subsidiaries, or to which
any of their respective properties, is subject which are
material to the Company and its subsidiaries taken as a
whole, that are required to be described in the
Registration Statement or the Prospectus, but are not
described as required, and there are no agreements,
contracts, indentures, leases or other instruments
relating to the Company or its subsidiaries that are
required to be described in the Registration Statement or
the Prospectus or to be filed as an exhibit to the
Registration Statement or any
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Incorporated Document that are not described or filed as
required by the Act or the Exchange Act. The descriptions
of the terms of any such contracts or documents contained
in the Registration Statement, the Prospectus or any
Incorporated Documents are correct in all material respects.
(i) Neither the Company nor any of its subsidiaries
is (i) in violation of its certificate or articles of
incorporation or bylaws, or other organizational
documents, (ii) in violation of any law, ordinance,
administrative or governmental rule or regulation
applicable to the Company or any of its subsidiaries or of
any decree of any court or governmental agency or body
having jurisdiction over the Company or any of its
subsidiaries or any of their respective properties, or
(iii) in default in any material respect in the
performance of any obligation, agreement or condition
contained in any bond, debenture, note or any other
evidence of indebtedness or in any agreement, indenture,
lease or instrument to which the Company or any of its
subsidiaries is a party or by which any of them or any of
their respective properties may be bound, and no condition
or state of facts exists, which, with the passage of time
or the giving of notice or both, would constitute such a
default, except in the case of clauses (i), (ii) and (iii)
where any such violation or default, or violations and
defaults in the aggregate, would not have a Material
Adverse Effect.
(j) None of the issuance and sale of the Notes, the
execution, delivery or performance of this Agreement, any
Terms Agreement and the Indenture relating to the Notes by
the Company or the consummation by the Company of the
transactions contemplated hereby and thereby to be
consummated by the Company (i) requires any consent,
approval, authorization or other order of or registration
or filing with, any court, regulatory body, administrative
agency or other governmental body, agency or official
(except such as may be required for the registration of
the Securities under the Act and the Exchange Act, and
compliance with the securities or Blue Sky laws of various
jurisdictions, all of which have been or will be effected
in accordance with this Agreement) or conflicts or will
conflict with or constitutes or will constitute a breach
of, or a default under, the certificate or articles of
incorporation or bylaws, or other organizational
documents, of the Company or any of its subsidiaries or
(ii) conflicts or will
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conflict with or constitutes or will constitute a breach of,
or a default under, any material agreement, indenture, lease
or instrument to which the Company or any of its subsidiaries
is a party or by which any of them or any of their respective
properties may be bound, or violates or will violate any
statute, law, regulation or filing or judgment, injunction,
order or decree applicable to the Company or any of its
subsidiaries or any of their respective properties, or
will result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the
Company or any of its subsidiaries pursuant to the terms
of any agreement or instrument to which any of them is a
party or by which any of them may be bound or to which any
of the property or assets of any of them is subject,
except in the case of clauses (i) and (ii) where any such
conflict, breach, default or violation, or conflicts,
breaches, defaults or violations in the aggregate, would
not have a Material Adverse Effect.
(k) The accountants who have certified or shall
certify the financial statements included or incorporated
by reference in the Registration Statement and the
Prospectus (or any amendment or supplement thereto) were
or shall be, for the periods in which they certified or
certify such financial statements, independent public
accountants as required by the Act.
(l) The historical financial statements, together
with related schedules and notes, included or incorporated
by reference in the Registration Statement and the
Prospectus (and any amendment or supplement thereto),
present fairly the consolidated financial position,
results of operations, cash flows and changes in
stockholders' equity of the Company and its subsidiaries
on the basis stated in the Registration Statement at the
respective dates or for the respective periods to which
they apply; such statements and related schedules and
notes have been prepared in accordance with United States
generally accepted accounting principles (as described in
the Prospectus) consistently applied throughout the
periods involved, except as disclosed therein; and the
other financial and statistical information and data
included or incorporated by reference in the Registration
Statement and the Prospectus (and any amendment or
supplement thereto) are accurately presented and prepared
on a basis consistent with such financial statements and
the books and records of the Company and its subsidiaries.
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(m) The execution and delivery of, and the
performance by the Company of its obligations under, each
of this Agreement, any Terms Agreement and the Indenture
have been duly and validly authorized, executed and
delivered by the Company and constitutes the valid and
legally binding agreement of the Company enforceable
against the Company in accordance with its terms, subject
to applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in
effect relating to creditors' rights and remedies gener-
ally and subject to general principles of equity
(regardless of whether enforcement is sought in a
proceeding in equity or at law). The Indenture has been
duly qualified under the Trust Indenture Act.
(n) Except as disclosed in the Registration
Statement and the Prospectus (or any amendment or
supplement thereto), subsequent to the respective dates as
of which such information is given in the Registration
Statement and the Prospectus (or any amendment or
supplement thereto), neither the Company nor any of its
subsidiaries has incurred any liability or obligation,
direct or contingent, or entered into any transaction, not
in the ordinary course of business, that is material to
the Company and its subsidiaries taken as a whole, and
there has not been any material change in the capital
stock of the Company, or material increase in the
short-term debt or long-term debt of the Company and any
of its subsidiaries taken as a whole, or any Material
Adverse Effect.
(o) Each of the Company and its subsidiaries has
good and marketable title to all property (real and
personal) described in the Prospectus as being owned by
it, free and clear of all liens, claims, security
interests or other encumbrances, except such as are
described in the Registration Statement and the Prospectus
or in a document filed as an exhibit to the Registration
Statement and all the property described in the Prospectus
as being held under lease by each of the Company and its
subsidiaries is held by it under valid, subsisting and
enforceable leases, in each case with only such exceptions
as in the aggregate would not have a Material Adverse
Effect.
(p) The Company and each of its subsidiaries has
such permits, licenses, franchises and authorizations of
governmental or regulatory authorities ("Permits") as are
necessary to own its respective properties and to conduct
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its business in the manner described in the Prospectus,
except where the failure to have any such Permit would not
have a Material Adverse Effect and subject to such
qualifications as may be set forth in the Prospectus; the
Company and each of its subsidiaries has fulfilled and
performed all its material obligations with respect to
such Permits and no event has occurred that allows, or
after notice or lapse of time would allow, revocation or
termination thereof or results in any other material
impairment of the rights of the holder of any such Permit,
except where such action would not have a Material Adverse
Effect and subject in each case to such qualification as
may be set forth in the Prospectus; and, except as
described in the Prospectus, none of such Permits contains
any restriction that is materially burdensome to the
Company and its subsidiaries, taken as a whole.
(q) The Company and its subsidiaries own or possess
all patents, trademarks, trademark registrations, service
marks, service mark registrations, trade names,
copyrights, licenses, inventions, trade secrets and rights
described in the Prospectus as being owned by them or any
of them or necessary for the conduct of their respective
businesses, except where the lack of such ownership or
possession would not have a Material Adverse Effect, and
the Company is not aware of any claim to the contrary or
any challenge by any other person to the rights of the
Company or any of its subsidiaries with respect to the
foregoing.
5. Indemnification and Contribution. (a) The
--------------------------------
Company agrees to indemnify and hold harmless each Agent and
each person, if any, who controls any Agent within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act from
and against any and all losses, claims, damages, liabilities,
judgments and 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 or the Prospectus or in
any amendment or supplement thereto, 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, judgments or
expenses arise out of or are based upon any untrue statement or
omission or alleged untrue statement or omission which has been
made therein or omitted therefrom in reliance upon and in conformity
-16-
with the information furnished in writing to the Company by or
on behalf of any Agent; provided, however, that the
indemnification contained in this paragraph (a) with respect to
any Prospectus shall not inure to the benefit of any Agent (or
to the benefit of any person controlling such Agent) on account
of any such loss, claim, damage, liability, judgment or expense
arising from the sale of the Notes by such Agent to any person
if a copy of the Prospectus shall not have been delivered or
sent to such person within the time required by the Act and the
regulations thereunder, and the untrue statement or alleged
untrue statement or omission or alleged omission of a material
fact contained in any preliminary prospectus was corrected in
the Prospectus. The foregoing indemnity agreement shall be in
addition to any liability which the Company may otherwise have.
(b) If any action, suit or proceeding shall be
brought against any Agent or any person controlling any Agent
in respect of which indemnity may be sought against the
Company, such Agent or such controlling person shall promptly
notify the Company, and the Company shall assume the defense
thereof, including the employment of counsel and payment of all
reasonable fees and expenses of such counsel. Any such Agent
or any such controlling person shall have the right to employ
separate counsel in any such action, suit or proceeding and to
participate in the defense thereof, but the reasonable fees and
expenses of such counsel shall be at the expense of such Agent
or such controlling person, rather than the Company, unless
(i) the Company has agreed in writing to pay such fees and
expenses, (ii) the Company has failed to assume the defense and
employ counsel, or (iii) the named parties to any such action,
suit or proceeding (including any impleaded parties) include
both such Agent or such controlling person and the Company and
such Agent or such controlling person shall have been advised
by its counsel that representation of such indemnified party
and the Company by the same counsel would be inappropriate
under applicable standards of professional conduct (whether or
not such representation by the same counsel has been proposed)
due to actual or potential differing interests between them (in
which case the Company shall not have the right to assume the
defense of such action, suit or proceeding on behalf of such
Agent or such controlling person). It is understood, however,
that the Company shall, in connection with any one such action,
suit or proceeding or separate but substantially similar or
related actions, suits or proceedings in the same jurisdiction
arising out of the same general allegations or circumstances,
be liable for the reasonable fees and expenses of only one
separate firm of attorneys (in addition to any local counsel,
-17-
not more than one per jurisdiction) at any time for all such
Agents and controlling persons, which firm shall be designated
in writing by the Agents, and that all such fees and expenses
shall be reimbursed promptly as they are incurred. The Company
shall not be liable for any settlement of any such action, suit
or proceeding effected without its written consent, but if
settled with such written consent, or if there be a final
judgment for the plaintiff in any such action, suit or
proceeding, the Company agrees to indemnify and hold harmless
any Agent, to the extent provided in the preceding paragraph,
and any such controlling person from and against any loss,
claim, damage, liability, judgment or expense by reason of such
settlement or judgment. Notwithstanding the foregoing
sentence, if at any time an Agent or any person controlling an
Agent is entitled to employ separate counsel pursuant to the
second sentence of this Section 5(b) and shall have requested
the Company in writing to reimburse such Agent or such
controlling person for fees and expenses of counsel, the
Company agrees that it shall be liable for any settlement of
any proceeding effected by such Agent or such controlling
person and for which the Company is liable pursuant to Section
5(a) without its written consent if (i) such settlement is
entered into more than ten (10) business days after receipt by
the Company of the aforesaid request or (ii) the Company shall
not have reimbursed such Agent or such controlling person in
accordance with such request prior to the date of such
settlement. The Company shall not, without the prior written
consent of such Agent or such controlling person, effect any
settlement of any pending or threatened proceeding in respect
of which any Agent or any person controlling an Agent is or
could have been a party and indemnity could have been sought
hereunder by such Agent or such controlling person, unless such
settlement includes an unconditional release of such Agent or
such controlling person from all liability on claims that are
subject matter of such proceeding.
(c) Each Agent agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors,
officers who sign the Registration Statement, and any person
who controls the Company within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act, to the same extent
as the foregoing indemnity from the Company to each Agent, but
only with respect to information relating to such Agent
furnished in writing by or on behalf of such Agent expressly
for use in the Registration Statement, the Prospectus or any
amendment or supplement thereto. If any action, suit or
proceeding shall be brought against the Company, any of its
directors, officers, or any such controlling person based on the
-18-
Registration Statement, the Prospectus or any amendment or
supplement thereto, and in respect of which indemnity may be
sought against any Agent pursuant to this paragraph (c), such
Agent shall have the rights and duties given to the Company by
paragraph (b) above (except that if the Company shall have
assumed the defense thereof such Agent shall not be required to
do so, but may employ separate counsel therein and participate
in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of such Agent), and the
Company, its directors, officers, and any such controlling
person shall have the rights and duties given to the Agents by
paragraph (b) above. The foregoing indemnity agreement shall
be in addition to any liability which the Agents may otherwise
have.
(d) If the indemnification provided for in this
Section 5 is unavailable to, or insufficient to hold harmless,
an indemnified party under paragraphs (a) or (c) hereof in
respect of any losses, claims, damages, liabilities, judgments
or expenses referred to therein, then an 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, judgments
or expenses (i) in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand
and the Agents on the other hand from the offering of the
Notes, or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred
to in clause (i) above, but also the relative fault of the
Company on the one hand and the Agents on the other hand in
connection with the statements or omissions that resulted in
such losses, claims, damages, liabilities, judgments or
expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company
on the one hand and the Agents on the other hand shall be
deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by the
Company bear to the total underwriting discounts and
commissions received by the Agents, 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 the Agents on the
other hand shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company on
the one hand or by the Agents on the other hand and the parties'
relative intent, knowledge, access
-19-
to information and opportunity to correct or prevent such
statement or omission.
(e) The Company and the Agents agree that it would
not be just and equitable if contribution pursuant to this
Section 5 were determined by a pro rata allocation (even if the
Agents were treated as one entity for such purpose) or by any
other method of allocation that does not take account of the
equitable considerations referred to in paragraph (d) above.
The amount paid or payable by an indemnified party as a result
of the losses, claims, damages, liabilities, judgments and
expenses referred to in paragraph (d) above shall be deemed to
include, subject to the limitations set forth above, any legal
or other expenses reasonably incurred by such indemnified party
in connection with investigating any claim or defending any
such action, suit or proceeding. Notwithstanding the
provisions of this Section 5, no Agent shall be required to
contribute any amount in excess of the amount by which the
total price of the Notes sold by it and distributed to the
public exceeds the amount of any damages which such Agent 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.
(f) Any losses, claims, damages, liabilities,
judgments or expenses for which an indemnified party is
entitled to indemnification or contribution under this
Section 5 shall be paid by the indemnifying party to the
indemnified party promptly as such losses, claims, damages,
liabilities, judgments or expenses are incurred. The indemnity
and contribution agreements contained in this Section 5 and the
representations and warranties of the Company set forth in this
Agreement shall remain operative and in full force and effect,
regardless of (i) any investigation made by or on behalf of any
Agent or any person controlling any Agent, the Company, its
directors or officers, or any person controlling the Company,
(ii) acceptance of any Notes and payment therefor hereunder,
and (iii) any termination of this Agreement. A successor to
any Agent or any person controlling any Agent, or to the
Company, its directors or officers, or any person controlling
the Company, shall be entitled to the benefits of the
indemnity, contribution and reimbursement agreements contained
in this Section 5.
-20-
6. Conditions of Obligations. The obligations of
-------------------------
the Agents to solicit offers to purchase the Notes as agent of
the Company, and each Agent's obligation to purchase Notes as
principal pursuant to any Terms Agreement, will be subject to
the accuracy of the representations and warranties of the
Company contained herein on the date hereof, and to the
accuracy of the statements of the Company's officers made in
any certificate, to the extent contemplated in such
certificate, to the performance by the Company of its
obligations hereunder and to the following additional
conditions:
(a) All filings, if any, required by Rule 424 under
the Act shall have been timely made; no stop order
suspending the effectiveness of the registration statement
shall have been issued and no proceeding for that purpose
shall have been instituted or, to the knowledge of the
Company or any Underwriter, threatened by the Commission,
and any request of the Commission for additional
information (to be included in the Registration Statement
or the Prospectus or otherwise) shall have been complied
with.
(b) Subsequent to the execution of any applicable
Terms Agreement, there shall not have occurred (i) any
change, or any development involving a prospective change,
in or affecting the financial condition, business,
properties, net worth, or results of operations of the
Company and its subsidiaries taken as a whole from the
date of the latest balance sheet included or incorporated
by reference in the Prospectus in each case not
contemplated by the Prospectus, which is material and
adverse; (ii) any downgrading in, or notice of any
proposal to downgrade, the rating of the Company's debt
securities by any "nationally recognized statistical
rating organization" (as defined for purposes of Rule
436(g) under the Act) or any public announcement that any
such organization has under surveillance or review with
negative implications the rating of the Company's debt
securities; (iii) any suspension or limitation of trading
in securities generally on or by the New York Stock
Exchange, the American Stock Exchange, the National
Association of Securities Dealers, Inc., the Chicago Board
Options Exchange, the Chicago Mercantile Exchange or the
Chicago Board of Trade, or any setting of minimum prices
for trading on such exchange; (iv) any suspension of
trading of any securities of the Company on any exchange;
(v) any banking moratorium declared by Federal or New York
authorities; or (vi) the outbreak or escalation of
hostilities involving the United States or the
-21-
declaration by the United States of a national emergency
or war, if the effect of any such event set forth in (i)
through (vi), in the judgment of the Agents, makes it
impractical or inadvisable to proceed with the solicitation
of purchases of the Notes.
(c) The Agents shall have received on the date
hereof, an opinion of Cahill Gordon & Reindel (a
partnership including a professional corporation), counsel
for the Company, dated the date hereof and addressed to
the Agents, to the effect that:
(i) The Company is a corporation duly
incorporated and validly existing in good standing
under the laws of the State of Delaware with full
corporate power and authority to own, lease and
operate its properties and to conduct its business as
described in the Prospectus;
(ii) The Indenture relating to the Notes has
been duly qualified under the Trust Indenture Act and
has been duly authorized, executed and delivered by
the Company and is a valid and binding agreement of
the Company, enforceable in accordance with its
terms, except as limited by bankruptcy, insolvency,
reorganization, fraudulent transfer and similar laws
affecting creditors' rights generally and by general
equitable principles (regardless of whether
enforcement is sought in a proceeding in equity or at
law);
(iii) The Notes have been duly authorized and,
when executed and authenticated in accordance with
the Indenture and delivered to the purchasers thereof
against payment therefor in accordance with the terms
of this Agreement, will be valid and binding
obligations of the Company, enforceable in accordance
with their terms, except as limited by bankruptcy,
insolvency, reorganization, fraudulent transfer and
similar laws affecting creditors' rights generally
and by general equitable principles (regardless of
whether enforcement is sought in a proceeding in
equity or at law) and will be entitled to the
benefits of the Indenture;
(iv) The Registration Statement and all post-
effective amendments, if any, have become effective
under the Act and, to the best knowledge of such
-22-
counsel after reasonable inquiry, no stop order
suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that
purpose are pending before or contemplated by the
Commission; and any required filing of the Prospectus
pursuant to Rule 424(b) has been made in accordance
with Rule 424(b);
(v) The Company has all requisite corporate
power and authority to enter into this Agreement, any
Terms Agreement and the Indenture relating to the
Notes and to issue and deliver the Notes to the
purchasers thereof;
(vi) This Agreement has been duly authorized,
executed and delivered by the Company and is a valid,
legal and binding agreement of the Company,
enforceable against the Company in accordance with
its terms, except (A) as limited by bankruptcy,
insolvency, reorganization, fraudulent transfer and
similar laws affecting creditors' rights generally
and by general equitable principles (regardless of
whether enforcement is sought in a proceeding in
equity or at law) and (B) that rights to indemnity
and contribution hereunder may be limited by Federal
or state securities laws or the public policy
underlying such laws;
(vii) The Notes and the Indenture conform in all
material respects to the descriptions thereof
contained in the Registration Statement and the
Prospectus;
(viii) None of the offer, sale, or delivery of the
Notes, or the execution, delivery or performance of
this Agreement and the Indenture relating to the
Notes, nor compliance by the Company with all the
provisions of this Agreement and the Indenture
applicable to it, nor consummation by the Company of
the transactions contemplated hereby conflicts or
will conflict with or constitutes or will constitute
a breach of, or a default under, the certificate of
incorporation or bylaws of the Company or any
indenture or other debt instrument or any other
material agreement or lease to which the Company is a
party or by which the Company or any of its
properties is bound that is an exhibit to the
Registration
-23-
Statement or to any Incorporated Document, which
conflict, breach or default would have a Material
Adverse Effect, or, except as disclosed in the
Registration Statement, will result in the creation
or imposition of any lien, charge or encumbrance upon
any property or assets of the Company under any such
indenture, debt instrument, agreement or lease which
lien, charge or encumbrance would have a Material
Adverse Effect, nor will any such action result in any
violation of any existing law, regulation, ruling
(assuming compliance with all applicable state
securities and Blue Sky laws), judgment, injunction,
order or decree known to such counsel after reasonable
inquiry, applicable to the Company or any of its
properties, which violation would have a Material
Adverse Effect;
(ix) No consent, approval, authorization or
other order of, or registration or filing with, any
Delaware, New York State or Federal court, regulatory
body, administrative agency or other governmental
body, agency, or official is required on the part of
the Company (except as have been obtained or made
under the Act and the Exchange Act or such as may be
required under state securities or Blue Sky laws
governing the purchase and distribution of the
Securities) for the valid issuance and sale of the
Notes to the purchasers thereof as contemplated by
this Agreement; and
(x) The Registration Statement and the
Prospectus and any supplements or amendments thereto
(except for the financial statements, schedules and
notes thereto and other financial and statistical
data included therein, as to which such counsel need
not express any opinion) comply as to form in all
material respects with the requirements of the Act;
and each of the Incorporated Documents (except for
the financial statements, schedules and notes thereto
and other financial and statistical data included
therein, as to which such counsel need not express
any opinion), when they were filed (or, if an
amendment with respect to any Incorporated Document
was filed, when such amendment was filed) complied as
to form in all material respects with the Exchange
Act.
-24-
In addition, such counsel shall state that such
counsel participated in conferences with officers and
other representatives of the Company, representatives of
the independent public accountants and representatives of
the Agents at which the contents of the Registration
Statement and Prospectus were discussed and, although such
counsel is not passing upon and does not assume any
responsibility for the accuracy, completeness or fairness
of the statements contained in the Registration Statement
and Prospectus (except as otherwise indicated above) on
the basis of the foregoing (relying as to materiality to a
large extent upon the opinions of officers and
representatives of the Company), no facts have come to the
attention of such counsel which lead them to believe that
either the Registration Statement or any amendment
thereto, at the time the Registration Statement or
amendment became effective, contained an untrue statement
of a material fact or omitted to state a material fact
necessary to make the statements therein not misleading or
that the Prospectus as of its date or any supplement
thereto as of its date, or the Registration Statement or
the Prospectus and any amendment or supplement thereto as
of the Closing Date, 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 therein, in the light of the
circumstances under which they were made, not misleading
(it being understood that such counsel need express no
opinion with respect to the financial statements and
schedules and other financial and statistical data
included in the Registration Statement or the Prospectus).
The opinion of such counsel may be limited to the
laws of the State of New York, the General Corporation Law
of the State of Delaware and the Federal laws of the
United States. In rendering their opinion as aforesaid,
such counsel may, as to factual matters, rely upon written
certificates or statements of officers of the Company and
public officials.
(d) The Agents shall have received letters dated the
date hereof from KPMG Peat Marwick LLP, independent
certified public accountants, substantially in the forms
heretofore approved by the Agents.
(e) The Agents shall have received on the date
hereof, an opinion of Andrews & Kurth L.L.P., counsel for
-25-
the Agents, dated the date hereof and addressed to the
Agents, in form and substance satisfactory to the Agents.
(f) You shall have received a certificate signed by
the chief executive officer and the chief financial
officer of the Company (or such other officers as are
acceptable to you) that: (i) no stop order suspending the
effectiveness of the Registration Statement shall have
been issued and no proceedings for that purpose shall be
pending or, to the knowledge of the Company, shall be
contemplated by the Commission at the date hereof;
(ii) there shall not have been, since the respective dates
as of which information is given in the Registration
Statement and the Prospectus (or any amendment or
supplement thereto), except as may otherwise be stated in
the Registration Statement and the Prospectus (or any
amendment or supplement thereto), any material adverse
change in the financial condition, business, prospects,
properties, net worth or results of operations of the
Company and its subsidiaries taken as a whole; (iii) all
the representations and warranties of the Company
contained in this Agreement shall be true and correct on
and as of the date hereof; and (iv) the Company has
performed or complied with its agreements herein contained
and required to be performed or complied with by it
hereunder at or prior to the date of such certificate.
(g) The Company shall have furnished or caused to be
furnished to you such further certificates and documents
as you shall have reasonably requested.
All such opinions, certificates, letters and other
documents will be in compliance with the provisions hereof
only if they are reasonably satisfactory in form and
substance to the Agents and their counsel.
Any certificate or document signed by any officer of
the Company and delivered to you or to counsel for the
Agents, shall be deemed a representation and warranty by
the Company to each Agent as to the statements made
therein. Any certificate delivered by the Company to its
counsel for purposes of enabling such counsel to render
the opinions referred to in this Section 6 will also be
furnished to you and counsel for the Agents.
7. Expenses. The Company agrees to pay the
--------
following costs and expenses and all other costs and expenses
-26-
incident to the performance by them of their obligations
hereunder: (i) the preparation, printing (or reproduction),
and filing with the Commission of the registration statement
(including financial statements and exhibits thereto), each
Prospectus and each amendment or supplement to any of them;
(ii) the printing (or reproduction) and delivery (including
postage, air freight charges and charges for counting and
packaging) of such copies of the registration statement, the
Prospectus, the Incorporated Documents, and all amendments or
supplements to any of them, as may be reasonably requested for
use in connection with the offering and sale of the Notes,
(iii) the preparation, printing, authentication, issuance and
delivery of certificates for the Notes, including any stamp
taxes in connection with the original issuance and sale of the
Notes; (iv) the printing (or reproduction) and delivery of this
Agreement, the Indenture, the preliminary and supplemental Blue
Sky Memoranda and all other agreements or documents printed (or
reproduced) and delivered in connection with the offering of
the Notes; (vi) the registration or qualification of the Notes
for offer and sale under the securities or Blue Sky laws of the
several states as provided in Section 3(f) hereof (including
the reasonable fees, expenses and disbursements of counsel for
the Underwriters relating to the preparation, printing (or
reproduction), and delivery of the preliminary and supplemental
Blue Sky Memoranda and such registration and qualification);
(vii) the filing fees of the Underwriters in connection with
any filings required to be made with the National Association
of Securities Dealers, Inc.; and (viii) the fees and expenses
of the Company's accountants and the fees and expenses of
counsel (including local and special counsel) for the Company.
8. Delivery of and Payment for Notes Sold through
----------------------------------------------
the Agents. Delivery of Notes sold through an Agent as agent
- ----------
shall be made by the Company to such Agent for the account of
any purchaser only against payment therefor in immediately
available funds. In the event that a purchaser shall fail
either to accept delivery of or to make payment for a Note on
the date fixed for settlement, the applicable Agent shall
promptly notify the Company and deliver the Note to the Company
and, if such Agent has theretofore paid the Company for such
Note, the Company will promptly return such funds to such
Agent. If such failure occurred for any reason other than
default by the applicable Agent in the performance of its
obligations hereunder, the Company will reimburse such Agent on
an equitable basis for its loss of the use of the funds for the
period such funds were credited to the Company's account.
-27-
9. Additional Covenants of the Company. The
-----------------------------------
Company covenants and agrees with the Agents that:
(a) Reaffirmation of Representations and Warranties.
-----------------------------------------------
Each acceptance by the Company of an offer for the purchase
of Notes, and each delivery of Notes to an Agent pursuant to
a Terms Agreement, shall be deemed to be an affirmation
that the representations and warranties of the Company
contained in this Agreement and, to the extent therein
provided, in any certificate theretofore delivered to the
Agents pursuant hereto are true and correct at the time of
such acceptance or sale, as the case may be, and an
undertaking that such representations and warranties will
be true and correct at the time of delivery to the
purchaser or his agent, or to the Agents, of the Notes
relating to such acceptance or sale, as the case may be,
as though made at and as of each such time (and it is
understood that such representations and warranties shall
relate to the Registration Statement and Prospectus as
amended and supplemented to each such time).
(b) Subsequent Delivery of Certificates. Subject to
-----------------------------------
the provisions of Section 3(k) hereof, each time that
(1) the Registration Statement or the Prospectus shall be
amended or supplemented (other than by the filing of an
Annual Report on Form 10-K, a Quarterly Report on Form
10-Q and any Current Report on Form 8-K or an amendment or
supplement providing solely for a change in the interest
rate of Notes (excluding any change in the formulas by
which such interest rates may be determined) or similar
changes, and other than by an amendment or supplement
which relates exclusively to an offering of debt
securities other than the Notes), or (2) there is filed
with the Commission any document incorporated by reference
into the Prospectus (other than any Current Report on
Form 8-K, except upon the reasonable request of the Agents
therefor), or (3) (if required pursuant to the terms of a
Terms Agreement) the Company sells Notes to an Agent
pursuant to a Terms Agreement, the Company shall furnish
or cause to be furnished to the Agents forthwith a
certificate dated the date of filing with the Commission
of such supplement or document, the date of effectiveness
of such amendment or the Applicable Settlement date, as
the case may be, in form and substance satisfactory to the
Agents to the effect that the statements contained in the
certificate referred to in Section 6(f) hereof which were
last furnished to the Agents are true and correct at the
time of
-28-
such amendment, supplement, filing or sale, as the
case may be, as though made at and as of such time (except
that such statements shall be deemed to relate to the
Registration Statement and the Prospectus as amended and
supplemented to such time) or, in lieu of such
certificate, a certificate of the same tenor as the
certificate referred to in said Section 6(f), modified as
necessary to relate to the Registration Statement and the
Prospectus as amended and supplemented to the time of
delivery of such certificate.
(c) Subsequent Delivery of Legal Opinions. Subject
-------------------------------------
to the provisions of Section 3(k) hereof, each time that
(1) the Registration Statement or the Prospectus shall be
amended or supplemented (other than by an amendment or
supplement providing solely for a change in the interest
rates of the Notes (excluding any change in the formulas
by which such interest rates may be determined) or similar
changes or solely for the inclusion of additional
financial information, other than by an amendment by the
filing of a Quarterly Report on Form 10-Q and any Current
Report on Form 8-K (except in the circumstances
hereinafter described) and other than by an amendment or
supplement which relates exclusively to an offering of
debt securities other than the Notes) or (2) there is
filed with the Commission the Company's Annual Report on
Form 10-K and such Annual Report is incorporated by
reference into the Prospectus or (3) (if required pursuant
to the terms of a Terms Agreement) the Company sells Notes
to an Agent pursuant to a Terms Agreement, the Company
shall furnish or cause to be furnished forthwith to the
Agents the written opinion of Cahill Gordon & Reindel,
special counsel for the Company, or other counsel
satisfactory to the Agents (which shall be deemed to
include the General Counsel of the Company, unless
otherwise specified by the Agents), and, only when
required pursuant to an applicable Terms Agreement
pursuant to clause (3) above, the written opinion of
counsel for the Agents, in each case dated the date of
filing with the Commission of such supplement or document,
the date of effectiveness of such amendment or the
applicable Settlement Date, as the case may be, in form
and substance satisfactory to the Agents, of the same
tenor as the opinions referred to in Section 6(c) hereof,
but modified, as necessary, to relate to the Registration
Statement and the Prospectus as amended and supplemented
to the time of delivery of such opinions or, in lieu of
such opinions, counsel last furnishing such opinions to
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the Agents shall each furnish the Agents with a letter to
the effect that the Agents may rely on such last opinion
to the same extent as though it was dated the date of such
letter authorizing reliance (except that statements in
such last opinion shall be deemed to relate to the
Registration Statement and the Prospectus as amended and
supplemented to the time of delivery of such letter
authorizing reliance). If one or more of the Agents
reasonably determine that the information included in a
filing by the Company in a Quarterly Report filed on
Form 10-Q or a Current Report filed on Form 8-K is of such
importance that legal opinion should be delivered to the
Agents in conjunction therewith, such Agent or Agents
shall notify the Company promptly upon such determination
(and in any event not later than 30 days after such
filing) and the Company will thereupon furnish or cause to
be furnished the opinions described above.
(d) Subsequent Delivery of Comfort Letters. Subject
--------------------------------------
to the provisions of Section 3(k) hereof, each time that
the Registration Statement or the Prospectus shall be
amended or supplemented (other than by incorporation by
reference) to include additional financial information or
there is filed with the Commission any document
incorporated by reference into the Prospectus which
contains additional financial information or (if required
pursuant to the terms of a Terms Agreement) the Company
sells Notes to an Agent pursuant to a Terms Agreement, the
Company shall cause KPMG Peat Marwick LLP or their
successors forthwith to furnish the Agents a letter, dated
the date of filing with the Commission of such supplement
or document, the date of effectiveness of such amendment,
or the applicable Settlement Date, as the case may be, in
form and substance satisfactory to the Agents, of the same
tenor as the the letter referred to in Section 6(d) hereof
but modified to relate to the Registration Statement and the
Prospectus, as amended and supplemented to the date of
such letter; provided, however, that if the Registration
-------- -------
Statement or the Prospectus is amended or supplemented
solely to include financial information as of and for a
fiscal quarter, KPMG Peat Marwick LLP or their successors
may limit the scope of such letter to the unaudited
financial statements included in such amendment or
supplement unless any other information included therein
of an accounting, financial or statistical nature is of
such a nature that, in the reasonable judgment of the
Agents, such letter should cover such other information.
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10. Survival of Certain Representations and
---------------------------------------
Obligations. The respective indemnities, agreements,
- -----------
representations, warranties and other statements of the Company
or its officers and of the several Agents set forth in or made
pursuant to this Agreement will remain in full force and
effect, regardless of any investigation, or statement as to the
result thereof, made by or on behalf of any Agent, the Company
or any of their respective representatives, officers or
directors or any controlling person, and will survive delivery
of and payment for any of the Notes.
11. Termination. (a) Termination of this
----------- -------------------
Agreement. This Agreement (excluding any Terms Agreement) may
- ---------
be terminated for any reason, at any time by either the Company
with respect to one or more Agents or an Agent, as to itself,
upon the giving of 30 days' written notice of such termination
to the other parties hereto.
(b) General. In the event of any such termination,
-------
neither party will have any liability to the other party
hereto, except that (i) each Agent shall be entitled to any
commission with respect to Notes sold by the Company as a
result of a solicitation made by such Agent and earned in
accordance with the third paragraph of Section 2(b) hereof,
(ii) if at the time of termination (a) an Agent shall own any
Notes purchased pursuant to a Terms Agreement with the
intention of reselling them or (b) an offer to purchase any of
the Notes has been accepted by the Company but the time of
delivery to the purchaser or his agent of the Note or Notes
relating thereto has not occurred, the covenants set forth in
Sections 3 and 9 hereof shall remain in effect until such Notes
are so resold or delivered, as the case may be, and (iii) the
covenant set forth in Section 3(g) hereof, the provisions of
Section 6 hereof, the indemnity and contribution agreements set
forth in Section 5 hereof, and the provisions of Section 10 and
13 hereof shall remain in effect.
12. Notices. All notices and other communications
-------
hereunder shall be in writing and shall be deemed to have been
given if mailed or transmitted by any standard form of
telecommunication. Notices to the Company shall be directed to
Varity Corporation, 672 Delaware Avenue, Buffalo, New York
14209, Attention: Corporate Secretary; notices to the Agents
shall be directed to: [ ].
13. Parties. This Agreement shall inure to the
-------
benefit of and be binding upon each Agent, the Company and
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their respective successors, heirs and legal representatives.
Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation,
other than the Agents, the Company and their respective
successors, heirs and legal representatives and the controlling
persons and officers and directors referred to in Section 5 and
their heirs and legal representatives, any legal or equitable
right, remedy or claim under, by virtue of or in respect of
this Agreement or any provision herein or therein contained.
This Agreement and all conditions and provisions hereof are
intended to be for the sole and exclusive benefit of the
Agents, the Company and their respective successors, heirs and
legal representatives, and said controlling persons and
officers and directors and their heirs and legal
representatives, and for the benefit of no other person, firm
or corporation. No purchaser of Notes shall be deemed to be a
successor or assign by reason merely of such purchase.
14. Applicable Law; Counterparts. This Agreement
----------------------------
shall be governed by and construed in accordance with the laws
of the State of New York applicable to contracts made and to be
performed entirely within the State of New York. This
Agreement may be executed in counterparts and the executed
counterparts shall together constitute a single instrument.
If the foregoing is in accordance with your
understanding of our agreement, kindly sign and return to us
the enclosed duplicate hereof.
Very truly yours,
VARITY CORPORATION
By:__________________________
Name:
Title:
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The foregoing Agreement is
hereby confirmed as of the
date first above written
[NAME OF AGENT]
By______________________________
Name:
Title:
Exhibit A
to Agency Agreement
[Agent's Commission Schedule]
Exhibit B
to Agency Agreement
Terms to be agreed to by the Company and the Agents
in a Terms Agreement.
Exhibit C
to Agency Agreement
Exhibit C to the Agency Agreement will be added at
the time the Agency Agreement is signed and will consist of
Administrative Procedures agreed on by the Company and the
Agents.