EXHIBIT 1(a)
H.J. HEINZ COMPANY
COMMON STOCK
($0.25 Par Value)
U.S. UNDERWRITING AGREEMENT
August __, 1995
U.S. UNDERWRITING AGREEMENT
August __, 1995
Dillon, Read & Co. Inc.
535 Madison Avenue
New York, New York 10022
Lazard Freres & Co. LLC
One Rockefeller Plaza
New York, New York 10020
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
225 Liberty Street
New York, New York 10080
as representatives
(the "U.S. Representatives")
of the several underwriters
listed on Schedule A hereto
Dear Ladies and Gentlemen:
The Howard Heinz Endowment, Vira I. Heinz Endowment, Heinz Family
Foundation, H. John Heinz III Revocable Trust No. 1, John Heinz III Descendants
Trust (No. 1), H.J. Heinz II Family Trust and H.J. Heinz II Charitable and
Family Trust (collectively, the "Selling Shareholders") severally propose to
sell to the several underwriters named in Schedule A (the "Underwriters") an
aggregate of 10,200,000 shares (the "Firm Shares") of Common Stock, par value
$0.25 per share (the "Common Stock"), of H.J. Heinz Company, a Pennsylvania
corporation (the "Company"). In addition, solely for the purpose of covering
overallotments, if any, the Selling Shareholders severally propose to sell to
the Underwriters, at the Underwriters' option, an aggregate of up to 1,912,500
additional shares of Common Stock (the "Additional Shares"). The Additional
Shares and the Firm Shares are collectively referred to as the "Shares". The
Shares are described in the Prospectus which is referred to below.
It is understood and agreed to by all parties that the Company and the
Selling Shareholders are concurrently entering into an underwriting agreement
(the "International Underwriting Agreement") providing for the sale by the
Selling Shareholders of an aggregate of 2,550,000 shares of Common Stock, (the
"International Shares"), through certain
underwriters outside the United States and Canada (the "International
Underwriters"), for whom Lazard Brothers & Co. Limited, Dillon Read & Co. Inc.
and Merrill Lynch International Limited are acting as representatives (the
"International Representatives"). Anything herein or therein to the contrary
notwithstanding, the respective closings under this Agreement and the
International Underwriting Agreement are hereby expressly made conditional on
one another. The Underwriters hereunder and the International Underwriters are
simultaneously entering into an Agreement Between U.S. and International
Underwriters (the "Agreement Between U.S. and International Underwriters") which
provides, among other things, for the transfer of shares of Common Stock between
the two syndicates and for consultation by the International Representatives
with the U.S. Representatives. Two forms of prospectus are to be used in
connection with the offering and sale of shares of Common Stock contemplated by
the foregoing, one relating to the Shares hereunder and the other relating to
the International Shares. The latter form of prospectus will be identical to
the former except for the outside front and back cover pages as included in the
registration statement and amendments thereto. References herein to any
prospectus, whether in preliminary or final form, and whether amended or
supplemented, shall include both the international and U.S. versions thereof.
The Company has filed, in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations thereunder
(collectively, the "Act"), with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3, including prospectuses
relating to the Shares and the International Shares, which incorporates by
reference documents that the Company has filed in accordance with the provisions
of the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder (collectively, the "Exchange Act"). The Company has
furnished to you, for use by the Underwriters and by dealers, copies of one or
more preliminary prospectuses and all documents incorporated by reference
therein (collectively, the "Preliminary Prospectus"). Except where the context
otherwise requires, the registration statement as in effect at the time of
execution of this Agreement or, if the registration statement is not yet
effective, as amended when it becomes effective, including all documents filed
as a part thereof or incorporated by reference therein, and including any
information contained in a prospectus subsequently filed with the Commission
pursuant to Rule 424(b) or Rule 434(c) under the Act and deemed to be part of
the registration statement at the time of
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effectiveness pursuant to Rule 430A under the Act and any "abbreviated term
sheet" described in Rule 434(c) under the Act that is deemed to be a part of
such registration statement pursuant to Rule 434(d) under the Act (a "Term
Sheet"), is herein called the "Registration Statement", and the prospectus,
including all documents incorporated therein by reference, any Term Sheet which,
in addition to the related preliminary prospectus, constitutes a part thereof
pursuant to Rule 434(a) under the Act and any prospectus required pursuant to
Rule 434(c)(2) of the Act (the "Integrated Prospectus"), each in the form filed
by the Company with the Commission pursuant to Rule 424(b) under the Act or, if
none of such filings is required, in the form of final prospectus included in
the Registration Statement at the time it became effective, is herein called the
"Prospectus". Any reference herein to the "date" of a Prospectus that includes
a Term Sheet shall mean the date of such Term Sheet.
The Selling Shareholders and the Underwriters agree as follows:
1. Sale and Purchase. On the basis of the representations and
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warranties and the other terms and conditions herein set forth, each of the
Selling Shareholders, severally and not jointly, agrees to sell to the
respective Underwriters the number of Firm Shares set forth opposite the name
of such Selling Shareholder on Schedule B and each of the Underwriters,
severally and not jointly, agrees to purchase from the Selling Shareholders the
number of Firm Shares set forth opposite the name of such Underwriter on
Schedule A, at a purchase price of $__ per Share. You may release the Firm
Shares for public sale promptly after this Agreement becomes effective. You
may from time to time increase or decrease the public offering price after the
initial offering to such extent as you may determine.
In addition, on the basis of the representations and warranties and
the other terms and conditions herein set forth, each of the Selling
Shareholders, severally and not jointly, grants to the several Underwriters an
option to purchase, and the Underwriters shall have the right to purchase,
severally and not jointly, from the Selling Shareholders all or a portion of the
Additional Shares set forth opposite the name of such Selling Shareholder on
Schedule B as may be necessary to cover overallotments made in connection with
the offering of the Firm Shares, at the same purchase price per share to be paid
by the several Underwriters to the Selling Shareholders for the Firm Shares.
This option may be exercised at any time (but not
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more than once) on or before the thirtieth day following the date hereof, by
written notice to the Selling Shareholders. Such notice shall set forth the
aggregate number of Additional Shares as to which the option is being exercised,
and the date and time when the Additional Shares are to be delivered (such date
and time being herein referred to as the "additional time of purchase");
provided, however, that the additional time of purchase shall not be earlier
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than the time of purchase (as defined below) nor earlier than the second
business day/1/ after the date on which the option shall have been exercised nor
later than the eighth business day after the date on which the option shall have
been exercised. The number of Additional Shares to be purchased by each
Underwriter shall be the number which bears the same proportion to the aggregate
number of Additional Shares being purchased as the number of Firm Shares set
forth opposite the name of such Underwriter on Schedule A bears to the total
number of Firm Shares (subject, in each case, to such adjustment as you may
determine to eliminate fractional shares). The number of Additional Shares to
be sold by each Selling Shareholder shall be the number which bears the same
proportion to the aggregate number of Additional Shares being purchased as the
number of Additional Shares set forth opposite the name of such Selling
Shareholder on Schedule B bears to the total number of Additional Shares
available for sale under the over-allotment option (subject, in each case, to
such adjustment as you may determine to eliminate fractional shares).
2. Payment and Delivery. Payment of the purchase price for the Firm
--------------------
Shares shall be made to the Selling Shareholders by certified or official bank
checks, in New York Clearing House funds, at the office of Dillon, Read & Co.
Inc. in New York City, against delivery of the Firm Shares for the respective
accounts of the Underwriters. Such payment and delivery shall be made at 10:00
A.M., New York City time, on August __, 1995 (unless another time shall be
agreed to by you and the Selling Shareholders or unless postponed in accordance
with the provisions of Section 10). The time at which such payment and
delivery are actually made is called the "time of purchase". The Firm Shares
shall be delivered in such names and in such denominations as you shall specify
on the second business day preceding the time of purchase.
Payment of the purchase price for the Additional Shares shall be made
at the additional time of purchase in
-----------------------
/1/As used herein, "business day" shall mean a day on which the New York
Stock Exchange is open for trading.
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the same manner and at the same office as the payment for the Firm Shares. The
Additional Shares shall be delivered in such names and in such denominations as
you shall specify on the second business day preceding the additional time of
purchase.
3. Representations and Warranties of the Company. The Company
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represents and warrants to each of the Underwriters that:
(a) Each Preliminary Prospectus filed as part of the Registration
Statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Act and in each case used to offer to sell
the Shares (as defined in the Act), complied when so filed in all material
respects with the Act; when the Registration Statement becomes or became
effective and at all times subsequent thereto up to the time of purchase
and the additional time of purchase, the Registration Statement and the
Prospectus, and any supplements or amendments thereto, complied and will
comply in all material respects with the provisions of the Act; and the
Registration Statement at all such times did not and will 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 Prospectus at all such times did not and will 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; provided, however, that the Company makes no representation or
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warranty with respect to any statement contained in the Registration
Statement or the Prospectus in reliance upon and in conformity with
information concerning (i) the Underwriters that was furnished in writing
by or on behalf of any Underwriter through you to the Company expressly for
use in the Registration Statement or the Prospectus and set forth in the
section of the Registration Statement and the Prospectus entitled
"Underwriting" or (ii) the Selling Shareholders that was furnished in
writing by or on behalf of any Selling Shareholder to the Company expressly
for use in the Registration Statement or the Prospectus and set forth in
the section of the Registration Statement and the Prospectus entitled
"Selling Shareholders"; the documents incorporated by reference in the
Prospectus, at the time they were filed with the Commission,
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complied in all material respects with the requirements of the Exchange
Act.
(b) All of the issued and outstanding shares of capital stock of
the Company (including the Shares) have been duly authorized and validly
issued and are fully paid and nonassessable; the Company has been duly
organized and is validly existing as a corporation in good standing under
the laws of the Commonwealth of Pennsylvania with full power and authority
to own its properties and conduct its business as described in the
Registration Statement and the Prospectus and to execute and deliver this
Agreement.
(c) Each of the Company and its subsidiaries listed in Annex I
hereto (the "Material Subsidiaries") is duly qualified or licensed by, and
is in good standing in, each jurisdiction where the nature of its business
or the character of its properties makes such qualification necessary,
except for such jurisdictions where the failure, individually or in the
aggregate, to be so qualified or licensed would not be reasonably likely to
have a material adverse effect on the Company and its subsidiaries taken as
a whole; each of the Material Subsidiaries has been duly organized and is
validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation with full power and authority to own its
properties and conduct its business as described in the Registration
Statement and Prospectus.
(d) Neither the Company nor any of the Material Subsidiaries is
in breach of, or in default under (nor has any event occurred which with
notice, lapse of time or both would constitute a breach of, or default
under), its charter or bylaws, or in the performance or observance of any
obligation, agreement, covenant or condition contained in any license,
indenture, lease, mortgage, deed of trust, bank loan or credit agreement,
supply agreement or other agreement or instrument to which the Company or
any of the Material Subsidiaries is a party or by which any of them is
bound, which breach or default would be reasonably likely to have a
material adverse effect on the Company and its subsidiaries taken as a
whole; and the execution, delivery and performance of this Agreement by the
Company and the consummation of the transactions contemplated hereby will
not conflict with, or result in any breach of, or constitute a default
under (or constitute any event which with notice, lapse of time or both
would constitute a breach
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of, or default under), any provision of the charter or bylaws of the
Company or any of the Material Subsidiaries or under any provision of any
license, indenture, mortgage, deed of trust, bank loan or credit agreement,
supply agreement or other agreement or instrument to which the Company or
any of the Material Subsidiaries is a party or by which any of them or
their properties may be bound or affected that is material to the Company
and its subsidiaries, as a whole, or under any federal, state, local or
foreign law, regulation or rule or any decree, judgment or order applicable
to the Company or any of the Material Subsidiaries.
(e) Except as set forth in Annex I, all of the outstanding shares
of capital stock of, or other equity interests in, each of the Material
Subsidiaries are owned by the Company free and clear of any pledge, lien,
encumbrance, security interest, preemptive right or other claim and except
for the Material Subsidiaries no other domestic subsidiary accounted for
more than 2% of the consolidated net revenues of the Company and its
consolidated subsidiaries as reported in the Company's Annual Report on
Form 10-K for the year ended May 3, 1995 as filed with the Commission.
(f) This Agreement has been duly authorized, executed and
delivered by the Company.
(g) The capital stock of the Company, including the Shares,
conforms in all material respects to the description thereof contained in
the Registration Statement and the Prospectus.
(h) No approval, authorization, consent or order of or filing
with any federal, state, local or foreign governmental or regulatory
commission, board, body, authority or agency is required to be obtained by
the Company in connection with the sale of the Shares as contemplated
hereby, other than registration of the Shares under the Act and any
necessary qualifications under the federal securities or "blue sky" laws of
the various jurisdictions in which the Shares are being offered by the
Underwriters.
(i) Except as set forth in the Agreement for the Registration of
Stock among the Company and the Selling Shareholders dated June 22, 1995 as
amended by letter agreement dated August 2, 1995 (as amended, the
"Agreement for the Registration of Stock") and pursuant to a Registration
Rights Agreement dated as of May 2,
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1995 between the Company and AT&T Investment Management Corp., no person
has the right, contractual or otherwise, to cause the Company to issue to
it, or register pursuant to the Act, any securities of the Company in
consequence of the sale of the Shares to the Underwriters hereunder.
(j) Coopers & Lybrand, L.L.P., whose report on the consolidated
financial statements of the Company and its consolidated subsidiaries are
incorporated by reference in the Registration Statement and the Prospectus,
are independent public accountants with respect to the Company as required
by the Act and the applicable published rules and regulations thereunder.
(k) Each of the Company and the Material Subsidiaries has all
necessary licenses, authorizations, consents and approvals and has made all
necessary filings required under any federal, state, local or foreign law,
regulation or rule, and has obtained all necessary authorizations,
consents, licenses and approvals from other persons, in order to conduct
its business, except where the absence thereof would not be reasonably
likely to have a material adverse effect on the Company and its
subsidiaries taken as a whole; neither the Company nor any of the Material
Subsidiaries is in violation of, or in default under, any such license,
authorization, consent or approval or any federal, state, local or foreign
law, regulation or rule or any decree, order or judgment applicable to the
Company or any of the Material Subsidiaries the result of which would be
reasonably likely to have a material adverse effect on the Company and its
subsidiaries taken as a whole.
(l) There is no action, suit or proceeding pending or threatened
in writing against the Company or any of the Material Subsidiaries or any
of their properties, at law or in equity, or before or by any federal,
state, local or foreign governmental or regulatory commission, board, body,
authority or agency that would be reasonably likely to result in a
judgment, decree or order having a material adverse effect on the Company
and its subsidiaries taken as a whole or that is required to be described
in the Registration Statement or Prospectus and is not so described.
(m) The Company and its Material Subsidiaries are in compliance
with any and all applicable laws and regulations relating to the protection
of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("Environmental Laws")
except where
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such noncompliance with Environmental Laws would not singly or in the
aggregate be reasonably likely to have a material adverse effect on the
Company and its subsidiaries taken as a whole.
(n) The Company has complied with all provisions of Section
517.075, Florida Statutes relating to doing business with the Government of
Cuba or with any person or affiliate located in Cuba.
(o) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, and except as may
be otherwise stated in the Registration Statement or the Prospectus, there
has not been (A) any material adverse change in the properties, assets,
operations, business or financial condition of the Company and its
subsidiaries taken as a whole, (B) any transaction, that is material to the
Company and its subsidiaries taken as a whole, contemplated or entered into
by the Company or any of its subsidiaries or (C) any obligation, contingent
or otherwise, directly or indirectly incurred by the Company or any of its
subsidiaries that is material to the Company and its subsidiaries taken as
a whole.
4. Representations and Warranties of the Selling Shareholders. Each
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Selling Shareholder severally and not jointly represents and warrants to each
Underwriter that:
(a) Such Selling Shareholder is, and at the time of delivery of
the Shares to be sold by such Selling Shareholder will be, the owner of the
number of Shares to be sold by such Selling Shareholder pursuant to this
Agreement and, at the time of delivery thereof, will have valid title to
such Shares, and upon delivery of and payment for such Shares the
Underwriters will acquire valid title to such Shares free and clear of any
claim, lien, encumbrance, security interest, community property right,
restriction on transfer or other defect in title.
(b) Such Selling Shareholder has, and at the time of delivery of
such Shares will have, full legal right, power and capacity, and any
authorization or approval required by law to sell, assign, transfer and
deliver such Shares in the manner provided in this Agreement.
(c) The Irrevocable Instruction by such Selling Shareholder to
Mellon Bank, N.A., (the
9
"Irrevocable Instruction") has been duly executed and delivered by such
Selling Shareholder and is a legal, valid and binding instruction of such
Selling Shareholder enforceable in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and general principles of equity, whether
considered in a proceeding in equity or at law.
(d) Such Selling Shareholder has duly and irrevocably authorized
Mellon Bank, N.A., on behalf of such Selling Shareholder, to deliver the
Shares to be sold by such Selling Shareholder immediately upon receipt of
payment for the Shares pursuant hereto.
(e) The sale of the Shares by such Selling Shareholder pursuant
hereto is not prompted by any material adverse information concerning the
Company; and all information furnished in writing by or on behalf of such
Selling Shareholder expressly for use in the Registration Statement or the
Prospectus, and any supplement or amendment thereto, is and will be when
the Registration Statement became effective and at all times subsequent
thereto up to the time of purchase and the additional time of purchase,
true and correct and complete and at all such times did not and will not
contain any untrue statement of 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.
(f) The execution, delivery and performance of this Agreement and
the Irrevocable Instruction and the consummation of the transactions
contemplated hereby and thereby will not conflict with, or result in any
breach of or constitute a default under (or constitute any event which with
notice, lapse of time or both would constitute a breach of, or default
under), any provision of the charter or bylaws or trust agreement (as the
case may be), of such Selling Shareholder or under any provision of any
indenture, mortgage, deed of trust, bank loan or credit agreement, or other
agreement or instrument to which such Selling
10
Shareholder is a party or by which such Selling Shareholder or any of its
properties may be bound or affected or under any federal, state, local or
foreign law, regulation or rule or any decree, judgment or order applicable
to such Selling Shareholder.
(g) No approval, authorization, consent or order of or filing
with any federal, state, local or foreign governmental or regulatory
commission, board, body, authority or agency is required in connection with
the sale of the Shares contemplated hereby, other than registration of the
Shares under the Act and any necessary qualifications under the federal
securities or "blue sky" laws of the various jurisdictions in which the
Shares are being offered by the Underwriters.
5. Certain Covenants of the Company. The Company hereby agrees:
--------------------------------
(a) to furnish such information as may be required and otherwise
to cooperate in qualifying the Shares for offering and sale under the
securities or blue sky laws of such states as you may designate and to
maintain such qualifications in effect as long as required for the
distribution of the Shares, provided that the Company shall not be required
to qualify as a foreign corporation or to consent to the service of process
under the laws of any such state (except for service of process with
respect to the offering and sale of the Shares) or to subject itself to
taxation in any such jurisdiction; promptly to advise you of the receipt by
the Company of any notification with respect to the suspension of the
qualification of the Shares for sale in any jurisdiction or the initiation
or threat of any proceeding for such purpose; and to use its best efforts
to obtain the withdrawal of any order of suspension at the earliest
practicable moment;
(b) to make available in New York City, as soon as practicable
after the Registration Statement becomes effective, and thereafter from
time to time to furnish to the Underwriters, as many copies of the
Prospectus and documents incorporated by reference therein (or of the
Prospectus as amended or supplemented if the Company shall have made any
amendment or supplement thereto after the effective date of the
Registration Statement), including any Term Sheet or Integrated Prospectus,
as the Underwriters may reasonably request for the purposes contemplated by
the Act;
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(c) to advise you promptly and (if requested by you) to confirm
such advice in writing, (i) when the Registration Statement has become
effective and when any post-effective amendment thereto becomes effective
and (ii) when the Prospectus, including any Term Sheet or Integrated
Prospectus, is filed with the Commission pursuant to Rule 424(b) under the
Act, if required under the Act (which the Company agrees to file in a
timely manner under such Rule);
(d) to advise you promptly, confirming such advice in writing, of
any request by the Commission for amendments or supplements to the
Registration Statement or the Prospectus or for additional information with
respect thereto, or of notice of institution of proceedings for or the
entry of a stop order suspending the effectiveness of the Registration
Statement and, if the Commission should enter a stop order suspending the
effectiveness of the Registration Statement, to use its best efforts to
obtain the lifting or removal of such order as soon as possible; to advise
you promptly of any proposal to amend or supplement the Registration
Statement or the Prospectus, including by filing any document that would be
incorporated therein by reference, and to file no such amendment or
supplement to which you shall reasonably object in writing;
(e) for a period of thirty days following the date of the
Prospectus or until the conclusion of the distribution of the Shares,
whichever is sooner, to advise the Underwriters promptly of the happening
of any event known to the Company that, in the reasonable judgment of the
Company, would require the making of any change in the Prospectus then
being used, or in the information incorporated therein by reference, so
that the Prospectus, as then supplemented, would not include an untrue
statement of a material fact or omit to state a material fact necessary to
make the statements therein, in the light of the circumstances under which
they are made, not misleading and, during such time, promptly to prepare
and furnish, at the Selling Shareholders' expense, to the Underwriters such
amendments or supplements to such Prospectus as may be necessary to reflect
any such change in such quantities as reasonably requested by the
Underwriters, and to furnish to you a copy of such proposed amendment or
supplement before filing any such amendment or supplement with the
Commission;
(f) to make generally available to its security holders, and to
deliver to you, an earnings
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statement of the Company (which need not be audited and which will satisfy
the provisions of Section 11(a) of the Act including, at the option of the
Company, Rule 158) covering a period of at least 12 months beginning after
the effective date of the Registration Statement but ending not later than
15 months after the effective date of the Registration Statement, as soon
as is reasonably practicable after the termination of such 12-month period;
and
(g) to furnish to you three signed copies of the Registration
Statement, as initially filed with the Commission, and of all amendments
thereto (including all exhibits thereto and documents incorporated by
reference therein) and a sufficient number of additional conformed copies
of the foregoing (without exhibits) for distribution of a copy of each to
the other Underwriters.
6. Certain Covenants of the Selling Shareholders.
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Each Selling Shareholder, severally, and not jointly, agrees with
each Underwriter and the Company that;
(a) such Selling Shareholder will not offer, pledge, sell,
contract to sell, grant any option to purchase, transfer or otherwise
dispose of, directly or indirectly, any shares of Common Stock or
securities convertible into or exercisable or exchangeable for Common Stock
or warrants or other rights to purchase Common Stock except for the sales
to you pursuant to this Agreement and the International Underwriting
Agreement, for a period commencing on the date hereof and continuing for 90
days after the date of the Prospectus, without the prior written consent of
Dillon, Read & Co. Inc. and Lazard Freres & Co. LLC; and
(b) whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is otherwise terminated, each
Selling Shareholder shall be severally, and not jointly, liable (in
proportion to the number of shares of Common Stock set forth opposite such
Selling Shareholder's name in Schedule B hereto) to pay (A) all expenses,
fees and taxes (other than fees and disbursements of your counsel except as
set forth under clause (iii) below) in connection with (i) the preparation
and filing of the Registration Statement, each Preliminary Prospectus, the
Prospectus (including any Term Sheet or
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Integrated Prospectus) and any amendment or supplement thereto, and the
printing and furnishing of copies of each thereof to you and to dealers
(including the costs of mailing and shipment) as may be reasonably
requested for use in connection with the offer and sale of the Shares, (ii)
the sale and delivery of the Shares, including any transfer taxes payable
in connection with the transfer of the Shares to the Underwriters and fees
and expenses of Mellon Bank N.A. and the Company's transfer agent and
registrar, (iii) the qualification of the Shares for offering and sale
under state laws as aforesaid (including legal fees and filing fees and
other disbursements of your counsel in connection therewith and the
preparation of blue sky surveys) and the printing and furnishing of copies
of any blue sky surveys to you and to dealers, (iv) any filing for review
of the public offering of the Shares by the National Association of
Securities Dealers, Inc., (v) the "road show" presentation to potential
investors, and (vi) all other expenses incident to the performance of the
Company's and the Selling Shareholders' other obligations hereunder,
including the fees and disbursements of the Company's counsel and
accountants and the Selling Shareholders' counsel and (B) any other
Registration Expenses as defined in the Agreement for the Registration of
Stock.
7. Reimbursement of Underwriters' Expenses. If the Shares are not
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delivered for any reason other than as a result of a (i) default by one or more
of the Underwriters in its or their respective obligations hereunder or (ii) the
occurrence of any event specified in the second paragraph of Section 9 hereof,
the Selling Shareholders shall reimburse the Underwriters for all of their out-
of-pocket expenses, including the fees and disbursements of their counsel
reasonably incurred by them in connection with the offering of the Shares.
8. Conditions of Underwriters' Obligations. The several obligations
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of the Underwriters hereunder are subject to the accuracy of the representations
and warranties on the part of the Company and the Selling Shareholders on the
date hereof and at the time of purchase (and the several obligations of the
Underwriters at the additional time of purchase are subject to the accuracy of
the representations and warranties on the part of the Company and the Selling
Shareholders on the date hereof and at the time of purchase and at the
additional time of purchase, as the case may be), the performance by each of the
Company and the Selling Shareholders of its and their obligations hereunder and
to the following conditions:
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(a) The Company shall furnish to you at the time of purchase and
at the additional time of purchase, as the case may be, an opinion of Paul,
Weiss, Rifkind, Wharton & Garrison, counsel for the Company, addressed to
the Underwriters, and dated the time of purchase or the additional time of
purchase, as the case may be, with reproduced copies for each of the other
Underwriters and in form reasonably satisfactory to Davis Polk & Wardwell,
counsel for the Underwriters, stating that:
(i) the Registration Statement has become effective under the
Act and, to the best of such counsel's knowledge, no stop order
proceedings with respect thereto are pending or threatened under the
Act;
(ii) the capital stock of the Company, including the Shares,
conforms in all material respects to the description thereof contained
in the Registration Statement and the Prospectus;
(iii) no approval, authorization, consent or order of or filing
with any federal, state, local or foreign governmental or regulatory
commission, board, body, authority or agency is required to be
obtained by the Company in connection with the sale of the Shares as
contemplated hereby other than registration of the Shares under the
Act (except such counsel need express no opinion as to any necessary
qualification under the securities laws of any foreign country or the
state securities or blue sky laws of the various jurisdictions in
which the Shares are being offered by the Underwriters or the rules
and regulations of the National Association of Securities Dealers,
Inc.);
(iv) the statements (A) in the Prospectus under the captions
"Description of Capital Stock" and (B) in the Registration Statement
in Item 15, in each case insofar as such statements constitute
summaries of the legal matters, documents or proceedings referred to
therein, fairly present the information called for with respect to
such legal matters, documents and proceedings and fairly summarize the
matters referred to therein;
(v) the Company is not an "investment company" or an entity
"controlled" by an "investment company", as such terms are defined in
the Investment Company Act of 1940, as amended;
15
(vi) the documents incorporated by reference in the
Registration Statement and Prospectus, when they were filed (or, if
an amendment with respect to any such document was filed, when such
amendment was filed), complied as to form in all material respects
with the Exchange Act (except as to the financial statements and
schedules and other financial and statistical data contained or
incorporated by reference therein, as to which such counsel need
express no opinion);
(vii) the Registration Statement and the Prospectus (except as
to the financial statements and schedules and other financial and
statistical data contained or incorporated by reference therein, as to
which such counsel need express no opinion) comply as to form in all
material respects with the requirements of the Act; and
(viii) nothing has come to the attention of such counsel that
causes them to believe that the Registration Statement or any
amendment thereto at the time such Registration Statement or amendment
became effective contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or that the
Prospectus or any supplement thereto at the date of such Prospectus or
such supplement, and at all times up to and including the time of
purchase contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to
make the statements therein, in 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 or
incorporated by reference in the Registration Statement or
Prospectus).
The opinion furnished pursuant to this Section 8(a) shall be subject
to customary exceptions, assumptions and qualifications.
(b) The Company shall furnish to you at the time of purchase and at
the additional time of purchase, as the case may be, an opinion of Lawrence
J. McCabe, Esq., Senior Vice President - General Counsel of the Company,
addressed to the Underwriters, and dated the
16
time of purchase or the additional time of purchase, as the case may be,
with reproduced copies for each of the other Underwriters and in form
reasonably satisfactory to Davis Polk & Wardwell, counsel for the
Underwriters, stating that:
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
Commonwealth of Pennsylvania, with full corporate power and authority
to own its properties and conduct its business as described in the
Registration Statement and the Prospectus and to execute and deliver
this Agreement;
(ii) each of the Company and the Material Subsidiaries is duly
qualified or licensed to do business by, and is in good standing as a
foreign corporation in, each jurisdiction where the nature of its
business or the character of its properties makes such qualification
necessary, except for such jurisdictions where the failure,
individually or in the aggregate, to be so licensed or qualified would
not be reasonably likely to have a material adverse effect on the
Company and its subsidiaries taken as a whole; each of the Material
Subsidiaries has been duly organized and is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation with full power and authority to own its properties and
conduct its business as described in the Registration Statement and
Prospectus;
(iii) the Registration Statement has become effective under the
Act and, to the best of such counsel's knowledge, no stop order
proceedings with respect thereto are pending or threatened under the
Act;
(iv) this Agreement has been duly authorized, executed and
delivered by the Company;
(v) the Shares have been duly authorized and validly issued and
are fully paid, nonassessable and free of statutory and contractual
preemptive rights;
(vi) the capital stock of the Company, including the Shares,
conforms in all material
17
respects to the description thereof contained in the Registration
Statement and the Prospectus;
(vii) no approval, authorization, consent or order of or filing
with any federal, state, local or foreign governmental or regulatory
commission, board, body, authority or agency is required to be
obtained by the Company in connection with the sale of the Shares as
contemplated hereby other than registration of the Shares under the
Act (except such counsel need express no opinion as to any necessary
qualification under the securities laws of any foreign country or the
state securities or blue sky laws of the various jurisdictions in
which the Shares are being offered by the Underwriters or the rules
and regulations of the National Association of Securities Dealers,
Inc.);
(viii) the execution, delivery and performance of this Agreement
by the Company and the consummation of the transactions contemplated
hereby do not and will not conflict with, or result in any breach of,
or constitute a default under (or constitute any event which with
notice, lapse of time or both would constitute a breach of or default
under), any provision of the charter or bylaws of the Company or any
of the Material Subsidiaries, or under any provision of any license,
indenture, mortgage, deed of trust, bank loan or credit agreement or
other agreement or instrument to which the Company or any of the
Material Subsidiaries is a party or by which the Company or any of the
Material Subsidiaries or their properties are bound or affected that
is material to the Company and its subsidiaries as a whole, or under
federal law or the laws of the Commonwealth of Pennsylvania, or under
any other state, local or foreign law, regulation or rule of which
such counsel has been made specifically aware or which such counsel
has been advised in writing (by counsel authorized to practice law in
the relevant jurisdiction) is so applicable, or any decree, judgment
or order known by such counsel to be applicable to the Company or any
of the Material Subsidiaries;
(ix) all contracts or documents of a character required to be
described in the Registration Statement or the Prospectus or to be
filed as an exhibit to the Registration Statement have been so
described or filed;
18
(x) the statements (A) in the Prospectus under the captions
"Description of Capital Stock" and (B) in the Registration Statement
in Item 15, in each case insofar as such statements constitute
summaries of the legal matters, documents or proceedings referred to
therein, fairly present the information called for with respect to
such legal matters, documents and proceedings and fairly summarize
the matters referred to therein;
(xi) after due inquiry, such counsel does not know of any
action, suit or proceeding pending or threatened in writing against
the Company or any of the Material Subsidiaries or any of their
properties, at law or in equity, or before or by any federal, state,
local or governmental or regulatory commission, board, body, authority
or agency that would be reasonably likely to result in a judgment or
decree that would have a material adverse effect on the Company and
its subsidiaries taken as a whole or that is required to be described
in the Registration Statement or the Prospectus and is not so
described;
(xii) the documents incorporated by reference in the Registration
Statement and Prospectus, when they were filed (or, if an amendment
with respect to any such document was filed, when such amendment was
filed), complied as to form in all material respects with the Exchange
Act (except as to the financial statements and schedules and other
financial and statistical data contained or incorporated by reference
therein, as to which such counsel need express no opinion);
(xiii) the Registration Statement and the Prospectus (except as
to the financial statements and schedules and other financial and
statistical data contained or incorporated by reference therein as to
which such counsel need express no opinion) comply as to form in all
material respects with the requirements of the Act; and
(xiv) nothing has come to the attention of such counsel that
causes him to believe that the Registration Statement or any amendment
thereto at the time such Registration Statement or amendment became
effective contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, or that the Prospectus or
any supplement thereto at the date of such Prospectus or such
supplement,
19
and at all times up to and including the time of purchase contained an
untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements
therein, in 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 or incorporated by
reference in the Registration Statement or Prospectus).
The opinion furnished pursuant to this Section 8(b) shall be subject
to customary exceptions, assumptions and qualifications.
(c) You shall have received at the time of purchase and at the
additional time of purchase, as the case may be, an opinion of Dewey
Ballantine, counsel to the Selling Shareholders, addressed to the
Underwriters, and dated the time of purchase or the additional time of
purchase, as the case may be, with reproduced copies for each of the other
Underwriters and in form satisfactory to Davis Polk & Wardwell, counsel for
the Underwriters, stating that:
(i) the Irrevocable Instruction has been duly executed and
delivered by each of the Selling Shareholders; the Irrevocable
Instruction is a legal, valid and binding irrevocable instruction of
each of the Selling Shareholders authorizing Mellon Bank, N.A. to
deliver the Shares immediately upon receipt of payment for the Shares
pursuant hereto, which irrevocable instruction is enforceable in
accordance with its terms, except, as the enforceability thereof may
be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally
and general principles of equity, whether considered in a proceeding
in equity or law;
(ii) each of the Selling Shareholders has full legal right,
power and capacity, and to the best of such counsel's knowledge has
obtained any authorization or approval required by law (other than
those imposed by the Act and the securities or blue sky laws of
certain jurisdictions and the rules and regulations of the National
Association of Securities Dealers, Inc.), to sell, assign,
20
transfer and deliver the Shares to be sold by such Selling Shareholder
in the manner provided in this Agreement;
(iii) upon receipt of payment by the Selling Shareholders and
delivery of the Shares to be sold by the Selling Shareholders pursuant
hereto, title thereto will pass to the Underwriters severally, free
and clear of any claim, lien, encumbrance, security interest,
community property right, restriction on transfer or other defect in
title, assuming the Underwriters purchased such Shares for value in
good faith without notice of any adverse claim;
(iv) to the best of such counsel's knowledge, the execution,
delivery and performance of this Agreement and the Irrevocable
Instruction and the consummation of the transactions contemplated
hereby and thereby will not conflict with, or result in any breach of
or constitute a default under (nor constitute any event which with
notice, lapse of time or both would constitute a breach of, or default
under), any provision of the charter or bylaws or trust agreement, as
the case may be of such Selling Shareholder or under any provision of
any indenture, mortgage, deed of trust, bank loan or credit agreement,
or other agreement or instrument to which such Selling Shareholder or
by which such Selling Shareholder or any of its properties may be
bound or affected or under any federal, state, local or foreign law,
regulation or rule or any decree, judgment or order applicable to such
Selling Shareholder;
(v) no approval, authorization, consent or order of or filing
with any federal, state, local or foreign governmental or regulatory
commission, board, body, authority or agency is required in connection
with the sale of the Shares as contemplated hereby other than
registration of the Shares under the Act (except such counsel need
express no opinion as to any necessary qualification under the
securities laws of any foreign country or the state securities or blue
sky laws of the various jurisdictions in which the Shares are being
offered by the Underwriters and the rules and regulations of the
National Association of Securities Dealers, Inc.); and
(vi) the statements in the Prospectus under the caption "Selling
Shareholders" in so far as
21
such statements constitute summaries of the legal matters, documents
or proceedings referred to therein, fairly present the information
called for with respect to such legal matters, documents and
proceedings and fairly summarize the matters referred to therein.
In rendering such opinion Dewey Ballantine may, to the extent that the
laws of the Commonwealth of Pennsylvania are relevant to such opinion, with
your approval rely on an opinion of Pennsylvania counsel reasonably
satisfactory to you. The opinion furnished pursuant to this Section 8(c)
shall be subject to customary exceptions, assumptions and qualifications.
(d) You shall have received from Coopers & Lybrand L.L.P. and
Arthur Andersen LLP letters dated, respectively, the date of this Agreement
and the time of purchase and additional time of purchase, as the case may
be, and addressed to the Underwriters (with reproduced copies for each of
the Underwriters) in the forms presented upon execution of this Agreement.
(e) You shall have received at the time of purchase and at the
additional time of purchase, as the case may be, an opinion of Davis Polk &
Wardwell and dated the time of purchase or the additional time of purchase,
as the case may be, in form and substance satisfactory to you.
(f) No amendment or supplement to the Registration Statement or
the Prospectus, including documents deemed to be incorporated by reference
therein and any Term Sheet or Integrated Prospectus, shall be filed prior
to the time the Registration Statement becomes effective, to which you
shall have reasonably objected in writing.
(g) The Registration Statement shall become effective at or
before 5:00 P.M., New York City time, on the date of this Agreement and, if
Rule 430A or Rule 434 under the Act is used, the Prospectus including any
Term Sheet constituting a part thereof, shall have been filed with the
Commission pursuant to Rule 424(b) under the Act at or before 5:00 P.M.,
New York City time, on the second full business day after the date of this
Agreement; provided, however, that any Integrated Prospectus shall have
-------- -------
been filed on or prior to the date on which a confirmation is sent or
given;
22
(h) Prior to the time of purchase or the additional time of
purchase, as the case may be: (i) no stop order with respect to the
effectiveness of the Registration Statement shall have been issued under
the Act or proceedings initiated under Section 8(d) or 8(e) of the Act;
(ii) the Registration Statement and all amendments thereto, or
modifications thereof, if any, shall 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
(iii) the Prospectus and all amendments or supplements thereto, or
modifications thereof, if any, shall 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.
(i) Between the time of execution of this Agreement and the time
of purchase or the additional time of purchase, as the case may be, there
has not been (i) any material and adverse change, present or prospective,
in the properties, assets, operations, business or condition of the Company
and its subsidiaries taken as a whole, other than as described in the
Registration Statement and the Prospectus or incorporated therein by
reference, (ii) any transaction that is material to the Company and its
subsidiaries taken as a whole contemplated or entered into by the Company
or any of its subsidiaries, other than as described in the Registration
Statement and the Prospectus, or (iii) any obligation, contingent or
otherwise, directly or indirectly, incurred by the Company or any of its
subsidiaries that is material to the Company and its subsidiaries taken as
a whole, other than as described in the Registration Statement and the
Prospectus.
(j) The Company, at the time of purchase or additional time of
purchase, as the case may be, will deliver to you a certificate of two of
its executive officers to the effect that the representations and
warranties of the Company set forth in this Agreement are true and correct
as of each such date and the conditions set forth in Section 8(h) and
Section 8(i) have been met.
(k) The Company and the Selling Shareholders shall have furnished
to you such other documents and certificates as to the accuracy and
completeness of any statement in the Registration Statement or the
23
Prospectus as of the time of purchase and the additional time of purchase,
as the case may be, as you reasonably may request.
(l) The Company and the Selling Shareholders shall have performed
such of their respective obligations under this Agreement as are to be
performed by the terms hereof at or before the time of purchase and at or
before the additional time of purchase, as the case may be, and the closing
of the purchase and sale of the International Shares shall occur
concurrently with the closing of the purchase and sale of the Shares
hereunder.
9. Effective Date of Agreement; Termination. This Agreement shall
----------------------------------------
become effective (i) if neither Rule 430A nor Rule 434 under the Act is used,
when you shall have received notification of the effectiveness of the
Registration Statement, or (ii) if either Rule 430A or Rule 434 under the Act is
used, when the parties hereto have executed and delivered this Agreement.
The obligations of the several Underwriters hereunder shall be subject
to termination in your absolute discretion if, at any time prior to the time of
purchase or, with respect to the purchase of any Additional Shares, the
additional time of purchase, as the case may be, trading in securities generally
on the New York Stock Exchange shall have been suspended or minimum prices shall
have been established on the New York Stock Exchange, or if a general banking
moratorium shall have been declared either by the United States or New York
State authorities, or if the United States shall have declared war in accordance
with its constitutional processes or there shall have occurred any material
outbreak or escalation of hostilities or other national or international
calamity or crisis of such magnitude in its effect on, or any material adverse
change in, any financial market which, in each case, in your judgment makes it
impracticable to market the Shares or the International Shares.
If you elect to terminate this Agreement as provided in this Section
9, the Company, the Selling Shareholders and each other Underwriter shall be
notified promptly by written notice transmitted by facsimile and confirmed by
written notice sent by registered mail, return receipt requested.
If the sale to the Underwriters of the Shares, as contemplated by this
Agreement, is not carried out by the Underwriters for any reason permitted under
this Agreement
24
or if such sale is not carried out because the Company or the Selling
Shareholders, as the case may be, shall be unable to comply with any of the
terms of this Agreement, neither the Company nor the Selling Shareholders shall
be under any obligation or liability under this Agreement (except to the extent
provided in Sections 6(b), 7 and 11), and the Underwriters shall be under no
obligation or liability to the Company and the Selling Shareholders under this
Agreement (except to the extent provided in Section 11).
10. Increase in Underwriters' Commitments. If any Underwriter shall
-------------------------------------
default in its obligation to take up and pay for the Firm Shares to be purchased
by it hereunder and if the number of Firm Shares which all Underwriters so
defaulting shall have agreed but failed to take up and pay for does not exceed
10% of the total number of Firm Shares, the non-defaulting Underwriters shall
take up and pay for (in addition to the aggregate principal amount of Firm
Shares they are obligated to purchase pursuant to Section 1) the number of Firm
Shares agreed to be purchased by all such defaulting Underwriters as hereinafter
provided. Such Shares shall be taken up and paid for by such non-defaulting
Underwriter or Underwriters in such amount or amounts as you may designate with
the consent of each Underwriter so designated or, in the event no such
designation is made, such Shares shall be taken up and paid for by all non-
defaulting Underwriters pro rata in proportion to the aggregate number of Firm
Shares set opposite the names of such non-defaulting Underwriters in Schedule A.
Without relieving any defaulting Underwriter from its obligations
hereunder, the Selling Shareholders agree with the non-defaulting Underwriters
that they will not sell any Firm Shares hereunder unless all of the Firm Shares
are purchased by the Underwriters (or by substituted underwriters selected by
you with the approval of the Selling Shareholders or selected by the Selling
Shareholders with your approval).
If a new Underwriter or Underwriters are substituted by the
Underwriters or by the Selling Shareholders for a defaulting Underwriter or
Underwriters in accordance with the foregoing provision, the Selling
Shareholders or you shall have the right to postpone the time of purchase for a
period not exceeding five business days in order that any necessary change in
the Registration Statement and the Prospectus and other documents may be
effected.
25
The term Underwriter as used in this Agreement shall refer to and
include any Underwriter substituted under this Section 10 with like effect as if
such substituted Underwriter had originally been named in Schedule A.
11. Indemnity by the Company, the Selling Shareholders and the
----------------------------------------------------------
Underwriters.
------------
(a) The Company agrees to indemnify, defend and hold harmless
each Underwriter, each person that controls any Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, and
each Underwriter's agents, employees, officers and directors and the
agents, employees, officers and directors of any such controlling person
(collectively, the "Underwriter indemnified parties") from and against any
and all losses, claims, damages, judgments, liabilities and expenses
(including the reasonable fees and expenses of counsel and other expenses
in connection with investigating, defending or settling any such action or
claim) which, jointly or severally, any Underwriter indemnified party may
incur as they are incurred (and regardless of whether such Underwriter
indemnified party is a party to the litigation, if any) 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 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, judgments, liabilities or expenses
arise out of, or are based upon, any such untrue statement or omission or
alleged untrue statement or omission based upon and in conformity with (i)
information with respect to any Underwriter furnished in writing by or on
behalf of any Underwriter through you to the Company expressly for use
therein with reference to such Underwriter or (ii) information with respect
to any Selling Shareholder furnished in writing by any Selling Shareholder
to the Company expressly for use therein with reference to such Selling
Shareholder and provided that the Company shall not be liable to any
Underwriter or any person that controls such Underwriter or such
Underwriter's agents, employees, officers or directors (or the agents,
employees, officers or directors of any such controlling person) with
respect to any Preliminary Prospectus to the extent that any such loss,
claim, damage, judgment, liability or expense results from the fact that
such Underwriter sold shares
26
to a person as to whom it shall be established that there was not sent or
given, at or prior to the written confirmation of such sale, a copy of the
Prospectus (excluding documents incorporated by reference) or of the
Prospectus as then amended or supplemented (excluding documents
incorporated by reference) in any case where delivery is required by the
Act if the Company has previously furnished copies thereof to such
Underwriter and the loss, claims, damage, judgment, liability or expense of
such Underwriter results from an untrue statement or omission of a material
fact contained in, or omitted from, the Preliminary Prospectus which was
corrected in the Prospectus (excluding documents incorporated by
reference). This indemnity agreement will be in addition to any liability
the Company otherwise may have.
(b) Each Selling Shareholder, severally and not jointly agrees to
indemnify, defend and hold harmless each Underwriter indemnified party from
and against any and all losses, claims, damages, judgments, liabilities and
expenses (including the fees and expenses of counsel and other expenses
reasonably incurred in connection with investigating, defending or settling
any such action or claim) which, jointly or severally, any Underwriter
indemnified party may incur as they are incurred (and regardless of whether
such Underwriter indemnified party is a party to the litigation, if any)
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 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, to the extent, but only to the extent, that such losses,
claims, damages, judgments, liabilities or expenses arise out of, or are
based upon and in conformity with information with respect to such Selling
Shareholder furnished in writing by such Selling Shareholder to the Company
expressly for use therein with reference to such Selling Shareholder;
provided, however, that such Selling Shareholder shall not be liable under
-------- -------
this Section 11 in an amount exceeding the total price at which the Shares
and the International Shares sold by such Selling Shareholder were offered
to the public. This indemnity agreement will be in addition to any
liability the Selling Shareholders otherwise may have.
27
(c) If any action or proceeding (including any governmental or
regulatory investigation or proceeding) shall be brought or asserted
against any Underwriter indemnified party, with respect to which indemnity
may be sought against the Company or the Selling Shareholders, as the case
may be, pursuant to this Section 11, such Underwriter indemnified party
shall promptly notify the Company or each Selling Shareholder, as the case
may be, in writing, and the Company or the Selling Shareholders shall
assume the defense thereof, including the employment of counsel reasonably
satisfactory to the Underwriter indemnified party and payment of all fees
and expenses; provided that the omission to notify the Company or the
--------
Selling Shareholders shall not relieve them from any liability that they
may have to any Underwriter indemnified party except to the extent that
failure to give timely notice shall prejudice materially the defense of, or
otherwise materially impair the indemnifying party's ability effectively
to deal with, such action or proceeding. An Underwriter indemnified party
shall have the right to employ separate counsel in any such action or
proceeding and to assume the defense thereof, but the fees and expenses of
such counsel shall be at the expense of such Underwriter indemnified party
unless (i) the employment of such counsel has been authorized in writing by
the Company or the Selling Shareholders, as the case may be, (ii) the
Company or the Selling Shareholders, as the case may be, have failed
promptly to assume the defense and employ counsel satisfactory to the
Underwriter indemnified party or (iii) the named parties to any such action
or proceeding (including any impleaded parties) include both the
Underwriter indemnified party and the Company or the Selling Shareholders,
as the case may be, and such Underwriter indemnified party shall have been
advised by counsel that there may be one or more legal defenses available
to it that are different from or additional to those available to the
Company or the Selling Shareholders (in which case the Company or the
Selling Shareholders shall not have the right to assume the defense of such
action on behalf of such Underwriter indemnified party), in any of which
events such fees and expenses shall be borne by the Company or the Selling
Shareholders, as the case may be, and reimbursed as they are incurred. It
is understood, however, that the Company or the Selling Shareholders 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 fees and expenses
of more than one separate firm of attorneys (in addition to any local
counsel) at any time for all such Underwriter indemnified parties, which
firm shall be designated in writing by Dillon,
28
Read & Co. Inc. and Lazard Freres & Co. LLC, and that all such fees and
expenses shall be reimbursed as they are incurred. None of the Company or
the Selling Shareholders shall be liable for any settlement of any such
action effected without the written consent of the Company or the Selling
Shareholders, as the case may be (which consent shall not be unreasonably
withheld or delayed), but if settled with the written consent of the
Company or the Selling Shareholders, as the case may be, or if there is a
final judgment with respect thereto, the Company or the Selling
Shareholders, as the case may be, agree to indemnify and hold harmless each
Underwriter indemnified party from and against any loss or liability by
reason of such settlement or judgment.
(d) Each Underwriter severally agrees to indemnify and hold
harmless the Company, its directors, its officers who sign the Registration
Statement, and any person that controls the Company within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act (collectively, the
"Company indemnified parties") and each Selling Shareholder and any person
that controls such Selling Shareholder within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act (collectively, the "Selling
Shareholder indemnified parties")to the same extent as the foregoing
indemnity from the Company and the Selling Shareholders to the Underwriter
indemnified parties, but only with respect to information concerning such
Underwriter furnished in writing by or on behalf of such Underwriter
through you to the Company expressly for use with respect to such
Underwriter in the Registration Statement, any Preliminary Prospectus or
the Prospectus. In case any action shall be brought against any Company
indemnified party or any Selling Shareholder indemnified party based on the
Registration Statement, any Preliminary Prospectus or the Prospectus and in
respect of which indemnity may be sought against any Underwriter pursuant
to this Section 11(d), such Underwriter shall have the rights and duties
given to the Company and the Selling Shareholders by Section 11(c) (except
that if the Company or the Selling Shareholders shall have assumed the
defense thereof such Underwriter shall not be required to do so, but may
employ separate counsel therein and participate in the defense thereof,
provided that the fees and expenses of such separate counsel shall be at
--------
the expense of such Underwriter), and the Company indemnified parties and
the Selling Shareholder indemnified parties shall have the rights
29
and duties given to the Underwriter indemnified parties by Section 11(c).
(e) If the indemnification provided for in this Section 11 is
unavailable to or insufficient to hold harmless any Underwriter indemnified
party or any Company indemnified party or any Selling Shareholder
indemnified party, then the party required to indemnify such indemnified
party under this Section 11, 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, judgments, liabilities
and expenses (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Selling Shareholders on
the one hand and the Underwriters on the other hand from the offering of
the Shares, 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 and the Selling Shareholders on the
one hand and the Underwriters on the other hand 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 received by the Company and the
Selling Shareholders on the one hand and the Underwriters on the other hand
shall be deemed to be in the same proportion as the total proceeds from the
offering (net of underwriting discounts and commissions but before
deducting expenses) received by the Selling Shareholders 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 and the Selling Shareholders on the one
hand and the Underwriters on the other hand shall be determined by
reference to, among other things, whether the untrue statement 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, by
the Selling Shareholders or by the Underwriters, and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The amount paid or payable by a party
as a result of the losses, claims, damages, judgments, liabilities and
expenses referred to above shall be deemed to include any legal or other
fees or expenses reasonably incurred
30
by such party in connection with investigating or defending any claim or
action.
The Company, the Selling Shareholders and the Underwriters agree
that it would not be just and equitable if contribution pursuant to this
Section 11(e) were determined by pro rata allocation or by any other method
of allocation (even if the Underwriters were treated as one entity for such
purpose) that does not take account of the equitable considerations
referred to in this Section 11(e). Notwithstanding the provisions of this
Section 11(e), no Underwriter indemnified party shall be required to
contribute any amount in excess of the amount by which the total price at
which the Shares underwritten by such Underwriter indemnified party and
distributed to the public were offered to the public exceeds the amount of
any damages which such Underwriter indemnified party otherwise has been
required to pay by reason of such untrue statement 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 Section 11 are several in proportion to their respective
underwriting commitments and are not joint.
The statements under the caption "Underwriting" in the
Prospectus, the last paragraph on the cover page of the Prospectus and the
first paragraph on the third page of the Prospectus (to the extent such
statements relate to an Underwriter) constitute the only information
furnished to the Company in writing by such Underwriter expressly for use
in the Registration statement, any Preliminary Prospectus or the
Prospectus.
(f) The indemnity and contribution agreements contained in this
Section 11 and the representations, warranties and covenants of the Company
and the Selling Shareholders contained in this Agreement shall remain in
full force and effect, regardless of any investigation made by or on behalf
of any Underwriter indemnified party or by or on behalf of any Company
indemnified party or any Selling Shareholder indemnified party, and shall
survive any termination of this Agreement or the issuance and delivery of
the Shares. Subject to the provisions of Section 11(c) and Section 11(d),
the Company, each
31
Selling Shareholder and each Underwriter agree promptly to notify the other
of the commencement of any litigation or proceeding against it in
connection with the issuance and sale of the Shares or in connection with
the Registration Statement or the Prospectus.
12. Notices. Except as otherwise herein provided, all statements,
-------
requests, notices and agreements shall be in writing or by telegram and, if to
the Underwriters, shall be sufficient in all respects if delivered or sent to
Dillon, Read & Co. Inc., 535 Madison Avenue, New York, New York 10022,
Attention: Syndicate Department; and Lazard Freres & Co. LLC, One Rockefeller
Plaza, New York, New York 10020, Attention: Syndicate Department and if to the
Company, shall be sufficient in all respects if delivered or sent to the Company
at the offices of the Company at 600 Grant Street, Pittsburgh, PA 15219,
Attention: Lawrence J. McCabe, Esq., Senior Vice President - General Counsel;
and if to the Selling Shareholders, shall be sufficient in all respects, if
delivered or sent to Dewey Ballantine, 1301 Avenue of the Americas, New York,
New York Attention: Paul J. Bschorr, Esq.
13. Construction. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
------------
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW. THE SECTION HEADINGS IN THIS AGREEMENT HAVE
BEEN INSERTED AS A MATTER OF CONVENIENCE OF REFERENCE AND ARE NOT A PART OF THIS
AGREEMENT.
14. Parties at Interest. The agreement herein set forth has been and
-------------------
is made solely for the benefit of the Underwriters, the Company, the Selling
Shareholders, the Underwriter indemnified parties, the Company indemnified
parties and the Selling Shareholder indemnified parties, and their respective
successors, assigns, executors and administrators. No other person,
partnership, association or corporation (including a purchaser, as such
purchaser, from any of the Underwriters) shall acquire or have any right under
or by virtue of this Agreement.
15. Counterparts. This Agreement may be signed by the parties in
------------
counterparts which together shall constitute one and the same agreement among
the parties.
32
If the foregoing correctly sets forth the understanding among the
Company, the Selling Shareholders and the Underwriters, please so indicate in
the space provided below for such purpose, whereupon this letter and your
acceptance shall constitute a binding agreement among the Company, the Selling
Shareholders and the Underwriters, severally.
Very truly yours,
H.J. HEINZ COMPANY
By: ________________________
Name:
Title:
HOWARD HEINZ ENDOWMENT
HEINZ FAMILY FOUNDATION
By: ________________________
Name: Teresa Heinz
Title: Chief Executive Officer
VIRA I. HEINZ ENDOWMENT
By: ________________________
Name: William H. Rea
Title: Director
H. JOHN HEINZ III REVOCABLE
TRUST NO. 1
H. JOHN HEINZ DESCENDANTS'
TRUST (NO. 1)
H.J. HEINZ II FAMILY TRUST
H.J. HEINZ II CHARITABLE AND
FAMILY TRUST
By: ________________________
Name: Teresa Heinz
Title: Trustee
33
Accepted and agreed to as of
the date first above written,
on behalf of themselves
and the other several
Underwriters named in
Schedule A
DILLON, READ & CO. INC.
LAZARD FRERES & CO. LLC
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
BY: DILLON, READ & CO. INC.
By: ________________________
Name:
Title:
BY: LAZARD FRERES & CO. LLC
By: ________________________
Name:
Title:
34
SCHEDULE A
Number of
Underwriters Firm Shares
------------ -----------
Dillon, Read & Co. Inc. . . . . . . . . . . . . . . . .
Lazard Freres & Co. LLC . . . . . . . . . . . . . . . .
Merrill Lynch, Pierce, Fenner & Smith
Incorporated. . . . . . . . . . . . . . . .
----------
Total 10,200,000
35
Schedule B
Number of Firm Number of Additional
Name Shares to be Sold Shares to be Sold
Howard Heinz Endowment 960,000
Vira I. Heinz 480,000
Endowment
Heinz Family 50,000
Foundation
H. John Heinz III 222,500
Revocable Trust No. 1
H. John Heinz III *
Descendants' Trust
(No. 1)
H.J. Heinz II Family 100,000
Trust
H.J. Heinz II 100,000
Charitable and Family
Trust
========== =========
10,200,000 1,912,500
36
ANNEX I
Material Subsidiaries
---------------------
Ore-Ida Foods, Inc.
Star-Kist Foods, Inc.
Weight Watchers International, Inc.
Weight Watchers Food Company
Portion Pac, Inc.
37