EXHIBIT 1.1
ARCH COAL, INC.
(a Delaware corporation)
$750,000,000
Common Stock
Warrants to Purchase Common Stock
Preferred Stock
Warrants to Purchase Preferred Stock
Depositary Shares
Debt Securities
Warrants to Purchase Debt Securities
Dated May 2, 2001
Table of Contents
Page
----
SECTION 1. Representations and Warranties............................................................... 4
(a) Representations and Warranties by the Company..................................................... 4
(1) Compliance with Registration Requirements.................................................. 4
(2) Incorporated Documents..................................................................... 5
(3) Independent Accountants.................................................................... 5
(4) Financial Statements....................................................................... 5
(5) Coal Reserve Information................................................................... 6
(6) No Material Adverse Change in Business..................................................... 6
(7) Good Standing of the Company............................................................... 6
(8) Good Standing of Subsidiaries.............................................................. 7
(9) Capitalization............................................................................. 7
(10) Authorization of this Underwriting Agreement and Terms Agreement........................... 7
(11) Authorization of Common Stock.............................................................. 7
(12) Authorization of Preferred Stock and/or Depositary Shares.................................. 8
(13) Authorization of Deposit Agreement......................................................... 8
(14) Authorization of Senior Debt Securities and/or Subordinated Debt Securities................ 8
(15) Authorization of the Indentures............................................................ 9
(16) Authorization of Warrants.................................................................. 9
(17) Authorization of Warrant Agreement......................................................... 9
(18) Authorization of Underlying Securities..................................................... 10
(19) Descriptions of the Underwritten Securities, Underlying Securities, Indentures, Deposit
Agreement and Warrant Agreement............................................................ 11
(20) Absence of Defaults and Conflicts.......................................................... 11
(21) Absence of Labor Dispute................................................................... 12
(22) Absence of Proceedings..................................................................... 12
(23) Accuracy of Exhibits....................................................................... 12
(24) Absence of Further Requirements............................................................ 12
(25) Possession of Intellectual Property........................................................ 12
(26) Possession of Licenses and Permits......................................................... 13
(27) Title to Property.......................................................................... 13
(28) Investment Company Act..................................................................... 13
(29) Environmental Laws......................................................................... 14
(b) Officers' Certificates.......................................................................... 14
SECTION 2. Sale and Delivery to Underwriters; Closing.................................................... 14
(a) Underwritten Securities......................................................................... 14
(b) Option Underwritten Securities.................................................................. 14
(c) Payment......................................................................................... 15
(d) Denominations; Registration..................................................................... 15
i
SECTION 3. Covenants of the Company..................................................................... 16
(a) Compliance with Securities Regulations and Commission Requests.................................... 16
(b) Filing of Amendments.............................................................................. 16
(c) Delivery of Registration Statements............................................................... 16
(d) Delivery of Prospectuses.......................................................................... 17
(e) Continued Compliance with Securities Laws......................................................... 17
(f) Blue Sky Qualifications........................................................................... 17
(g) Earnings Statement................................................................................ 18
(h) Reservation of Securities......................................................................... 18
(i) Use of Proceeds................................................................................... 18
(j) Listing........................................................................................... 18
(k) Restriction on Sale of Securities................................................................. 18
(l) Reporting Requirements............................................................................ 18
SECTION 4. Payment of Expenses........................................................................... 18
(a) Expenses.......................................................................................... 18
(b) Termination of Agreement.......................................................................... 19
SECTION 5. Conditions of Underwriters' Obligations....................................................... 19
(a) Effectiveness of Registration Statement........................................................... 19
(b) Opinion of Counsel for Company.................................................................... 20
(c) Opinion of Counsel for Underwriters............................................................... 20
(d) Officers' Certificate............................................................................. 20
(e) Accountant's Comfort Letter....................................................................... 20
(f) Bring-down Comfort Letter......................................................................... 20
(g) Ratings........................................................................................... 20
(h) Approval of Listing............................................................................... 21
(i) No Objection...................................................................................... 21
(j) Lock-up Agreements................................................................................ 21
(k) Over-Allotment Option............................................................................. 21
(l) Additional Documents.............................................................................. 22
(m) Termination of Terms Agreement.................................................................... 22
SECTION 6. Indemnification............................................................................... 22
(a) Indemnification of Underwriters................................................................... 22
(b) Indemnification of Company, Directors and Officers................................................ 23
(c) Actions against Parties; Notification............................................................. 24
(d) Settlement without Consent if Failure to Reimburse................................................ 24
SECTION 7. Contribution.................................................................................. 24
SECTION 8. Representations, Warranties and Agreements to Survive Delivery................................ 26
SECTION 9. Termination................................................................................... 26
(a) Underwriting Agreement............................................................................ 26
(b) Terms Agreement................................................................................... 26
(c) Liabilities....................................................................................... 27
ii
SECTION 10. Default by One or More of the Underwriters................................................... 27
SECTION 11. Notices...................................................................................... 28
SECTION 12. Parties...................................................................................... 28
SECTION 13. GOVERNING LAW AND TIME....................................................................... 28
SECTION 14. Effect of Headings........................................................................... 28
iii
EXECUTION COPY
ARCH COAL, INC.
(a Delaware corporation)
Common Stock, Warrants to Purchase Common Stock,
Preferred Stock, Warrants to Purchase Preferred Stock,
Depositary Shares,
Debt Securities and Warrants to Purchase Debt Securities
UNDERWRITING AGREEMENT
May 2, 2001
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
4 World Financial Center
New York, New York 10080
Ladies and Gentlemen:
Arch Coal, Inc., a Delaware corporation (the "Company"), proposes to issue
and sell up to $750,000,000 aggregate initial public offering price of its (i)
shares of common stock, par value $.01 per share (the "Common Stock"), (ii)
warrants to purchase shares of Common Stock (the "Common Stock Warrants"), (iii)
shares of preferred stock, par value $.01 per share (the "Preferred Stock"),
(iv) warrants to purchase shares of Preferred Stock (the "Preferred Stock
Warrants"), (v) senior or subordinated debt securities (the "Debt Securities"),
or (vi) warrants to purchase Debt Securities (the "Debt Security Warrants"), or
any combination thereof, from time to time, in or pursuant to one or more
offerings on terms to be determined at the time of sale.
The Preferred Stock will be issued in one or more series and each series of
Preferred Stock may vary, as applicable, as to the title, specific number of
shares, rank, stated value, liquidation preference, dividend rate or rates (or
method of calculation), dividend payment dates, redemption provisions, sinking
fund requirements, conversion provisions (and terms of the related Underlying
Securities (as defined below)) and any other variable terms as set forth in the
applicable certificate of designations (each, the "Certificate of Designations")
relating to such series of Preferred Stock. A series of Preferred Stock may be
represented by depositary shares (the "Depositary Shares") that are evidenced by
depositary receipts (the "Depositary Receipts") issued pursuant to a deposit
agreement (each, a "Deposit Agreement") among the Company, the depositary
identified therein (the "Depositary") and the registered holders of the
Depositary Receipts issued thereunder.
The Debt Securities will be issued in one or more series as senior
indebtedness (the "Senior Debt Securities") under an indenture (the "Senior
Indenture") between the Company and the trustee identified therein (the "Senior
Trustee"), or as subordinated indebtedness (the "Subordinated Debt Securities")
under an indenture (the "Subordinated Indenture", and collectively with the
Senior Indenture, the "Indentures", and each, an "Indenture"), between the
Company and the trustee identified therein (the "Subordinated Trustee", and
collectively with the Senior Trustee, the "Trustees", and each, a "Trustee").
Each series of Debt Securities may vary, as applicable, as to title, aggregate
principal amount, rank, interest rate or formula and timing of payments thereof,
stated maturity date, redemption and/or repayment provisions, sinking fund
requirements, conversion provisions (and terms of the related Underlying
Securities) and any other variable terms established by or pursuant to the
applicable Indenture.
Each issue of Common Stock Warrants, Preferred Stock Warrants and Debt
Security Warrants (collectively, the "Warrants") will be issued pursuant to a
separate warrant agreement (each, a "Warrant Agreement") between the Company and
the warrant agent identified therein (each, a "Warrant Agent"). The Warrants
may vary, as applicable, as to, among other terms, title, type, specific number,
exercise dates or periods, exercise price(s), expiration date(s) and terms of
the related Underlying Securities.
As used herein, "Securities" shall mean the Common Stock, Common Stock
Warrants, Preferred Stock, Preferred Stock Warrants, Depositary Shares, Senior
Debt Securities or Subordinated Debt Securities, or any combination thereof,
initially issuable by the Company and "Underlying Securities" shall mean the
Common Stock, Preferred Stock, Depositary Shares, Senior Debt Securities or
Subordinated Debt Securities issuable upon exercise of the Warrants, as
applicable, or upon conversion of the Preferred Stock, Depositary Shares, Senior
Debt Securities or Subordinated Debt Securities, as applicable.
Whenever the Company determines to make an offering of Securities through
Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated
("Merrill Lynch"), or through an underwriting syndicate managed by Merrill
Lynch, the Company will enter into an agreement (each, a "Terms Agreement")
providing for the sale of such Securities to, and the purchase and offering
thereof by, Merrill Lynch and such other underwriters, if any, selected by
Merrill Lynch (the "Underwriters", which term shall include Merrill Lynch,
whether acting as sole Underwriter or as a member of an underwriting syndicate,
as well as any Underwriter substituted pursuant to Section 10 hereof). The
Terms Agreement relating to the offering of Securities shall specify the number
or aggregate principal amount, as the case may be, of Securities to be initially
issued (the "Initial Underwritten Securities"), the name of each Underwriter
participating in such offering (subject to substitution as provided in Section
10 hereof) and the name of any Underwriter other than Merrill Lynch acting as
co-manager in connection with such offering, the number or aggregate principal
amount, as the case may be, of Initial Underwritten Securities which each such
Underwriter severally agrees to purchase, whether such offering is on a fixed or
variable price basis and, if on a fixed price basis, the initial offering price,
the price at which the Initial Underwritten Securities are to be purchased by
the Underwriters, the form, time, date and place of delivery and payment of the
Initial Underwritten Securities and any other material variable terms of the
Initial Underwritten Securities, as well as the material variable terms of any
related Underlying Securities. In addition, if applicable, such Terms Agreement
shall specify whether the Company has agreed to grant to the Underwriters an
option to purchase additional Securities
2
to cover over-allotments, if any, and the number or aggregate principal amount,
as the case may be, of Securities subject to such option (the "Option
Underwritten Securities"). As used herein, the term "Underwritten Securities"
shall include the Initial Underwritten Securities and all or any portion of any
Option Underwritten Securities. The Terms Agreement, which shall be
substantially in the form of Exhibit A hereto, may take the form of an exchange
of any standard form of written telecommunication between the Company and
Merrill Lynch, acting for itself and, if applicable, as representative of any
other Underwriters. Each offering of Underwritten Securities through Merrill
Lynch as sole Underwriter or through an underwriting syndicate managed by
Merrill Lynch will be governed by this Underwriting Agreement, as supplemented
by the applicable Terms Agreement.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-58738) for the
registration of the Securities and the Underlying Securities under the
Securities Act of 1933, as amended (the "1933 Act"), and the offering thereof
from time to time in accordance with Rule 415 of the rules and regulations of
the Commission under the 1933 Act (the "1933 Act Regulations"). Such
registration statement has been declared effective by the Commission and each
Indenture, if any, has been duly qualified under the Trust Indenture Act of
1939, as amended (the "1939 Act"), and the Company has filed such post-effective
amendments thereto as may be required prior to the execution of the applicable
Terms Agreement and each such post-effective amendment has been declared
effective by the Commission or become effective upon filing. Such registration
statement (as so amended, if applicable), including the information, if any,
deemed to be a part thereof pursuant to Rule 430A(b) of the 1933 Act Regulations
(the "Rule 430A Information") or Rule 434(d) of the 1933 Act Regulations (the
"Rule 434 Information"), is referred to herein as the "Registration Statement";
and the final prospectus and the final prospectus supplement relating to the
offering of the Underwritten Securities, in the forms first furnished to the
Underwriters by the Company for use in connection with the offering of the
Underwritten Securities, are collectively referred to herein as the
"Prospectus"; provided, however, that all references to the "Registration
Statement" and the "Prospectus" shall also be deemed to include all documents
incorporated therein by reference pursuant to the Securities Exchange Act of
1934, as amended (the "1934 Act"), prior to the execution of the applicable
Terms Agreement; provided, further, that if the Company files a registration
statement with the Commission pursuant to Rule 462(b) of the 1933 Act
Regulations (the "Rule 462(b) Registration Statement"), then all references to
"Registration Statement" shall also be deemed to include the Rule 462 (b)
Registration Statement; and provided, further, that if the Company elects to
rely upon Rule 434 of the 1933 Act Regulations, then all references to
"Prospectus" shall also be deemed to include the final or preliminary prospectus
and the applicable term sheet or abbreviated term sheet (the "Term Sheet"), as
the case may be, in the forms first furnished to the Underwriters by the Company
in reliance upon Rule 434 of the 1933 Act Regulations, and all references to the
date of the Prospectus shall mean the date of the Term Sheet. A "preliminary
prospectus" shall be deemed to refer to (i) any prospectus used before the
Registration Statement became effective and (ii) any prospectus that omitted, as
applicable, the Rule 430A Information, the Rule 434 Information or other
information to be included upon pricing in a form of prospectus filed with the
Commission pursuant to Rule 424(b) of the 1933 Act Regulations and was used
after such effectiveness and prior to the initial delivery of the Prospectus to
the Underwriters by the Company. For purposes of this Underwriting Agreement,
all references to the Registration Statement, Prospectus, Term Sheet or
preliminary prospectus or to any amendment or
3
supplement to any of the foregoing shall be deemed to include any copy filed
with the Commission pursuant to its Electronic Data Gathering, Analysis and
Retrieval system ("EDGAR").
All references in this Underwriting Agreement to financial statements and
schedules and other information which is "contained," "included" or "stated" (or
other references of like import) in the Registration Statement, Prospectus or
preliminary prospectus shall be deemed to mean and include all such financial
statements and schedules and other information which is incorporated by
reference in the Registration Statement, Prospectus or preliminary prospectus,
as the case may be, prior to the execution of the applicable Terms Agreement;
and all references in this Underwriting Agreement to amendments or supplements
to the Registration Statement, Prospectus or preliminary prospectus shall be
deemed to include the filing of any document under the 1934 Act which is
incorporated by reference in the Registration Statement, Prospectus or
preliminary prospectus, as the case may be, after the execution of the
applicable Terms Agreement.
SECTION 1. Representations and Warranties.
------------------------------
(a) Representations and Warranties by the Company. The Company represents
and warrants to Merrill Lynch, as of the date hereof, and to each Underwriter
named in the applicable Terms Agreement, as of the date thereof, as of the
Closing Time (as defined below) and, if applicable, as of each Date of Delivery
(as defined below) (in each case, a "Representation Date"), as follows:
(1) Compliance with Registration Requirements. The Company meets the
---------------------------------------------
requirements for use of Form S-3 under the 1933 Act. The Registration
Statement (including any Rule 462(b) Registration Statement) has become
effective under the 1933 Act and no stop order suspending the effectiveness
of the Registration Statement (or such Rule 462(b) Registration Statement)
has been issued under the 1933 Act and no proceedings for that purpose have
been instituted or are pending or, to the knowledge of the Company, are
contemplated by the Commission, and any request on the part of the
Commission for additional information has been complied with. In addition,
each Indenture has been duly qualified under the 1939 Act, as applicable.
At the respective times the Registration Statement (including any Rule
462(b) Registration Statement) and any post-effective amendments thereto
(including the filing of the Company's most recent Annual Report on Form
10-K with the Commission (the "Annual Report on Form 10-K")) became
effective and at each Representation Date, the Registration Statement
(including any Rule 462(b) Registration Statement) and any amendments
thereto complied and will comply in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations and the 1939 Act
and, as applicable, the rules and regulations of the Commission under the
1939 Act (the "1939 Act Regulations") and 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. At the date of the Prospectus, at the Closing Time and at
each Date of Delivery, if any, neither the Prospectus nor any amendments
and supplements thereto included or will include an untrue statement of a
material fact or
4
omitted or will omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading. If the Company elects to rely upon Rule 434 of
the 1933 Act Regulations, the Company will comply with the requirements of
Rule 434. Notwithstanding the foregoing, the representations and warranties
in this subsection shall 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 any
Underwriter through Merrill Lynch expressly for use in the Registration
Statement or the Prospectus.
Each preliminary prospectus and 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 1933 Act, complied when so
filed in all material respects with the 1933 Act Regulations and each
preliminary prospectus and the Prospectus delivered to the Underwriters for
use in connection with the offering of Underwritten Securities will, at the
time of such delivery, be identical to any electronically transmitted
copies thereof filed with the Commission pursuant to EDGAR, except to the
extent permitted by Regulation S-T.
(2) Incorporated Documents. The documents incorporated or deemed to be
--------------------------
incorporated by reference in the Registration Statement and the Prospectus,
at the time they were or hereafter are filed with the Commission, complied
and will comply in all material respects with the requirements of the 1934
Act and the rules and regulations of the Commission thereunder (the "1934
Act Regulations") and, when read together with the other information in the
Prospectus, at the date of the Prospectus, at the Closing Time and at each
Date of Delivery, if any, did not and will not include an untrue statement
of a material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which
they were made, not misleading.
(3) Independent Accountants. The accountants who certified the
---------------------------
financial statements and any supporting schedules thereto included in the
Registration Statement and the Prospectus are independent public
accountants as required by the 1933 Act and the 1933 Act Regulations.
(4) Financial Statements. The financial statements of the Company
------------------------
included in the Registration Statement and the Prospectus, together with
the related schedules and notes, as well as those financial statements,
schedules and notes of any other entity included therein, present fairly
the financial position of the Company and its consolidated subsidiaries, or
such other entity, as the case may be, at the dates indicated and the
statement of operations, stockholders' equity and cash flows of the Company
and its consolidated subsidiaries, or such other entity, as the case may
be, for the periods specified. Such financial statements have been prepared
in conformity with generally accepted accounting principles ("GAAP")
applied on a consistent basis throughout the periods involved. The
supporting schedules, if any, included in the Registration Statement and
the Prospectus present fairly in accordance with GAAP the information
required to be stated therein. The selected financial data and the summary
financial information included in the Prospectus present fairly the
information shown therein and have been compiled on a basis consistent with
that of the audited financial statements
5
included in the Registration Statement and the Prospectus. In addition, any
pro forma financial statements of the Company and its subsidiaries and the
related notes thereto included in the Registration Statement and the
Prospectus present fairly the information shown therein, have been prepared
in accordance with the Commission's rules and guidelines with respect to
pro forma financial statements and have been properly compiled on the bases
described therein, and the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give effect
to the transactions and circumstances referred to therein.
(5) Coal Reserve Information. All information related to the Company's
----------------------------
coal reserves (including, without limitation, the Company's estimated
reserves of recoverable coal (measured, indicated and total recoverable) in
the aggregate and by region and mining complex location) included in the
Registration Statement and the Prospectus at the time the respective
Registration Statement became effective and the Prospectus is issued and at
the Closing Time (and, if any Option Underwritten Securities are purchased,
at the Date of Delivery) and incorporated or deemed to be incorporated by
reference in the Registration Statement and Prospectus, on the date the
document incorporated or deemed to be incorporated by reference became
effective or at the time the document was or hereafter is filed with the
Commission (collectively, the "Company Coal Reserve Information") (A) was
and is accurate in all material respects, (B) complied and will comply in
all material respects with the requirements of the 1933 Act and 1933 Act
Regulations or the 1934 Act and the 1934 Act Regulations, as applicable,
and (C) when read together with the other information in the Prospectus,
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. The Company Coal Reserve Information
has been calculated in accordance with standard mining engineering
procedures used in the coal industry and applicable government reporting
requirements and applicable law. All assumptions used in the calculation of
the Company Coal Reserve Information were and are reasonable.
(6) No Material Adverse Change in Business. Since the respective dates
------------------------------------------
as of which information is given in the Registration Statement and the
Prospectus, except as otherwise stated therein, (A) there has been no
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business (a "Material Adverse Effect"), (B) there have
been no transactions entered into by the Company or any of its
subsidiaries, other than those arising in the ordinary course of business,
which are material with respect to the Company and its subsidiaries
considered as one enterprise and (C) except for regular quarterly dividends
on the Company's common stock or preferred stock, in amounts per share that
are consistent with past practice or the applicable charter document or
supplement thereto, respectively, there has been no dividend or
distribution of any kind declared, paid or made by the Company on any class
of its capital stock.
(7) Good Standing of the Company. The Company has been duly organized
--------------------------------
and is validly existing as a corporation in good standing under the laws of
the State of Delaware and has corporate power and authority to own, lease
and operate its properties
6
and to conduct its business as described in the Prospectus and to enter
into and perform its obligations under, or as contemplated under, this
Underwriting Agreement and the applicable Terms Agreement. The Company is
duly qualified as a foreign corporation to transact business and is in good
standing in each other jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure to so qualify or be in good
standing would not result in a Material Adverse Effect.
(8) Good Standing of Subsidiaries. Each "significant subsidiary" of
---------------------------------
the Company (as such term is defined in Rule 1-02 of Regulation S-X
promulgated under the 1933 Act) (each, a "Subsidiary" and, collectively,
the "Subsidiaries"), if any, has been duly organized and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus and is duly qualified as a foreign corporation
to transact business and is in good standing in each jurisdiction in which
such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure to
so qualify or be in good standing would not result in a Material Adverse
Effect. Except as otherwise stated in the Registration Statement and the
Prospectus, all of the issued and outstanding capital stock of each
Subsidiary has been duly authorized and is validly issued, fully paid and
non-assessable and is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity. None of the outstanding shares of
capital stock of any Subsidiary was issued in violation of preemptive or
other similar rights of any securityholder of such Subsidiary.
(9) Capitalization. If the Prospectus contains a "Capitalization"
------------------
section, the authorized, issued and outstanding shares of capital stock of
the Company is as set forth in the column entitled "Actual" under such
section (except for subsequent issuances thereof, if any, contemplated
under this Underwriting Agreement, pursuant to reservations, agreements or
employee benefit plans referred to in the Prospectus or pursuant to the
exercise of convertible securities or options referred to in the
Prospectus). Such shares of capital stock have been duly authorized and
validly issued by the Company and are fully paid and non-assessable, and
none of such shares of capital stock was issued in violation of preemptive
or other similar rights of any securityholder of the Company.
(10) Authorization of this Underwriting Agreement and Terms Agreement.
---------------------------------------------------------------------
This Underwriting Agreement has been, and the applicable Terms Agreement as
of the date thereof will have been, duly authorized, executed and delivered
by the Company.
(11) Authorization of Common Stock. If the Underwritten Securities
----------------------------------
being sold pursuant to the applicable Terms Agreement include Common Stock,
such Underwritten Securities have been, or as of the date of such Terms
Agreement will have been, duly authorized by the Company for issuance and
sale pursuant to this Underwriting Agreement and such Terms Agreement. Such
Underwritten Securities, when issued and delivered by the Company pursuant
to this Underwriting Agreement and
7
such Terms Agreement against payment of the consideration therefor
specified in such Terms Agreement, will be validly issued, fully paid and
non-assessable and will not be subject to preemptive or other similar
rights of any securityholder of the Company. No holder of such Underwritten
Securities is or will be subject to personal liability by reason of being
such a holder.
(12) Authorization of Preferred Stock and/or Depositary Shares. If the
--------------------------------------------------------------
Underwritten Securities being sold pursuant to the applicable Terms
Agreement include Preferred Stock and/or Depositary Shares, such
Underwritten Securities have been, or as of the date of such Terms
Agreement will have been, duly authorized by the Company for issuance and
sale pursuant to this Underwriting Agreement and such Terms Agreement. The
applicable Preferred Stock, when issued and delivered by the Company
pursuant to this Underwriting Agreement and such Terms Agreement against
payment of the consideration therefor, or for the related Depositary
Shares, as the case may be, specified in such Terms Agreement, will be
validly issued, fully paid and non-assessable and will not be subject to
preemptive or other similar rights of any securityholder of the Company. In
addition, upon deposit by the Company of any Preferred Stock represented by
Depositary Shares with the applicable Depositary and the execution and
delivery by such Depositary of the Depositary Receipts evidencing such
Depositary Shares, in each case pursuant to the applicable Deposit
Agreement, such Depositary Shares will represent legal and valid interests
in such Preferred Stock. No holder of such Preferred Stock or Depositary
Receipts evidencing Depositary Shares is or will be subject to personal
liability by reason of being such a holder. The applicable Certificate of
Designations will be in full force and effect prior to the Closing Time.
(13) Authorization of Deposit Agreement. If the Underwritten
---------------------------------------
Securities being sold pursuant to the applicable Terms Agreement include
Depositary Shares or if Debt Securities are convertible into Depositary
Shares represented by Preferred Stock, the applicable Deposit Agreement has
been, or prior to the issuance of such Depositary Shares will have been,
duly authorized, executed and delivered by the Company and, upon such
authorization, execution and delivery, will constitute a valid and binding
agreement of the Company, enforceable against the Company in accordance
with its terms, except as enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally or by general equitable
principles (regardless of whether enforcement is considered in a proceeding
in equity or at law). Each registered holder of a Depositary Receipt under
the applicable Deposit Agreement will be entitled to the proportional
rights, preferences and limitations of the Preferred Stock represented by
the Depositary Shares evidenced by such Depositary Receipt and to such
other rights as are granted to such registered holder in such Deposit
Agreement.
(14) Authorization of Senior Debt Securities and/or Subordinated Debt
---------------------------------------------------------------------
Securities. If the Underwritten Securities being sold pursuant to the
----------
applicable Terms Agreement include Senior Debt Securities and/or
Subordinated Debt Securities, such Underwritten Securities have been, or as
of the date of such Terms Agreement will have been, duly authorized by the
Company for issuance and sale pursuant to this
8
Underwriting Agreement and such Terms Agreement. Such Underwritten
Securities, when issued and authenticated in the manner provided for in the
applicable Indenture and delivered against payment of the consideration
therefor specified in such Terms Agreement, will constitute valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally or by
general equitable principles (regardless of whether enforcement is
considered in a proceeding in equity or at law), and except further as
enforcement thereof may be limited by requirements that a claim with
respect to any Debt Securities payable in a foreign or composite currency
(or a foreign or composite currency judgment in respect of such claim) be
converted into U.S. dollars at a rate of exchange prevailing on a date
determined pursuant to applicable law or by governmental authority to
limit, delay or prohibit the making of payments outside the United States.
Such Underwritten Securities will be in the form contemplated by, and each
registered holder thereof is entitled to the benefits of, the applicable
Indenture.
(15) Authorization of the Indentures. If the Underwritten Securities
------------------------------------
being sold pursuant to the applicable Terms Agreement include Senior Debt
Securities and/or Subordinated Debt Securities or if Preferred Stock is, or
Depositary Shares represented by Preferred Stock are, convertible into Debt
Securities, each applicable Indenture has been, or prior to the issuance of
the Debt Securities thereunder will have been, duly authorized, executed
and delivered by the Company and, upon such authorization, execution and
delivery, will constitute a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or other similar laws affecting the enforcement
of creditors' rights generally or by general equitable principles
(regardless of whether enforcement is considered in a proceeding in equity
or at law).
(16) Authorization of Warrants. If the Underwritten Securities being
------------------------------
sold pursuant to the applicable Terms Agreement include Warrants, such
Underwritten Securities have been, or as of the date of such Terms
Agreement will have been, duly authorized by the Company for issuance and
sale pursuant to this Underwriting Agreement and such Terms Agreement. Such
Underwritten Securities, when issued and authenticated in the manner
provided for the applicable Warrant Agreement and delivered against payment
of the consideration therefor specified in such Terms Agreement, will
constitute valid and binding obligations of the Company, entitled to the
benefits provided by such Warrant Agreement and enforceable against the
Company in accordance with their terms, except as enforcement thereof may
be limited by bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally or by
general equitable principles (regardless of whether enforcement is
considered in a proceeding in equity or at law).
(17) Authorization of Warrant Agreement. If the Underwritten
---------------------------------------
Securities being sold pursuant to the applicable Terms Agreement include
Warrants, each applicable
9
Warrant Agreement has been, or prior to the issuance of such Underwritten
Securities will have been, duly authorized, executed and delivered by the
Company and, upon such authorization, execution and delivery, will
constitute a valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms, except as enforcement
thereof may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or other similar laws affecting the enforcement of creditors'
rights generally or by general equitable principles (regardless of whether
enforcement is considered in a proceeding in equity or at law).
(18) Authorization of Underlying Securities. If the Underlying
-------------------------------------------
Securities related to the Underwritten Securities being sold pursuant to
the applicable Terms Agreement include Common Stock, Preferred Stock or
Depositary Shares, such Underlying Securities have been, or as of the date
of such Terms Agreement will have been, duly authorized and reserved for
issuance by the Company upon exercise of the Common Stock Warrants or
Preferred Stock Warrants, as applicable, or upon conversion of the related
Preferred Stock, Depositary Shares, Senior Debt Securities or Subordinated
Debt Securities, as applicable. If the Underlying Securities include Common
Stock or Preferred Stock, such Underlying Securities, when issued upon such
exercise or conversion, as applicable, will be validly issued, fully paid
and non-assessable and will not be subject to preemptive or other similar
rights of any securityholder of the Company. If the Underlying Securities
include Depositary Shares, such Underlying Securities, upon deposit by the
Company of the Preferred Stock represented thereby with the applicable
Depositary and the execution and delivery by such Depositary of the
Depositary Receipts evidencing such Depositary Shares, in each case
pursuant to the applicable Deposit Agreement, will represent legal and
valid interests in such Preferred Stock. No holder of such Common Stock,
Preferred Stock or Depositary Receipts evidencing Depository Shares is or
will be subject to personal liability by reason of being such a holder. If
the Underlying Securities related to the Underwritten Securities being sold
pursuant to the applicable Terms Agreement include Senior Debt Securities
and/or Subordinated Debt Securities, such Underlying Securities have been,
or as of the date of such Terms Agreement will have been, duly authorized
for issuance by the Company upon the exercise of the Debt Security Warrants
or upon conversion of the related Preferred Stock or Depositary Shares, as
applicable. Such Underlying Securities, when issued and authenticated in
the manner provided for in the applicable Indenture and delivered in
accordance with the terms of the Debt Security Warrants or the related
Preferred Stock or Depositary Shares, as applicable, will constitute valid
and binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally or by
general equitable principles (regardless of whether enforcement is
considered in a proceeding in equity or at law), and except further as
enforcement thereof may be limited by requirements that a claim with
respect to any Debt Securities payable in a foreign or composite currency
(or a foreign or composite currency judgment in respect of such claim) be
converted into U.S. dollars at a rate of exchange prevailing on a date
10
determined pursuant to applicable law or by governmental authority to
limit, delay or prohibit the making of payments outside the United States.
(19) Descriptions of the Underwritten Securities, Underlying
------------------------------------------------------------
Securities, Indentures, Deposit Agreement and Warrant Agreement. The
---------------------------------------------------------------
Underwritten Securities being sold pursuant to the applicable Terms
Agreement and each applicable Indenture, Deposit Agreement and Warrant
Agreement, as of each Representation Date, and any Underlying Securities,
when issued and delivered in accordance with the terms of the related
Underwritten Securities, will conform in all material respects to the
statements relating thereto contained in the Prospectus and will be in
substantially the form filed or incorporated by reference, as the case may
be, as an exhibit to the Registration Statement.
(20) Absence of Defaults and Conflicts. Neither the Company nor any of
--------------------------------------
its subsidiaries is in violation of its charter or by-laws or in default in
the performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by which it or
any of them may be bound, or to which any of the assets, properties or
operations of the Company or any of its subsidiaries is subject
(collectively, "Agreements and Instruments"), except for such defaults that
would not result in a Material Adverse Effect. The execution, delivery and
performance of this Underwriting Agreement, the applicable Terms Agreement
and each applicable Indenture, Warrant Agreement and Deposit Agreement and
any other agreement or instrument entered into or issued or to be entered
into or issued by the Company in connection with the transactions
contemplated hereby or thereby or in the Registration Statement and the
Prospectus and the consummation of the transactions contemplated herein and
in the Registration Statement and the Prospectus (including the issuance
and sale of the Underwritten Securities and the use of the proceeds from
the sale of the Underwritten Securities as described under the caption "Use
of Proceeds" as well as the issuance of any Underlying Securities) and
compliance by the Company with its obligations hereunder and thereunder
have been duly authorized by all necessary corporate action and do not and
will not, whether with or without the giving of notice or passage of time
or both, conflict with or constitute a breach of, or default or Repayment
Event (as defined below) under, or result in the creation or imposition of
any lien, charge or encumbrance upon any assets, properties or operations
of the Company or any of its subsidiaries pursuant to, any Agreements and
Instruments (except for such conflicts, breaches or defaults or liens,
charges or encumbrances that would not result in a Company Material Adverse
Effect), nor will such action result in any violation of the provisions of
the charter or by-laws of the Company or any of its subsidiaries or any
applicable law, statute, rule, regulation, judgment, order, writ or decree
of any government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Company or any of its subsidiaries or
any of their assets, properties or operations, nor will such action cause
the preferred share purchase rights issued pursuant to the Rights
Agreement, dated as of March 3, 2000, between the Company and First Chicago
Trust Company of New York, as Rights Agent, (the "Rights Agreement") to
become exercisable or cause any Underwriter to become an Acquiring Person
(as defined in the Rights Agreement). As used herein, a "Repayment Event"
means any event or condition which gives the holder of any note, debenture
or
11
other evidence of indebtedness (or any person acting on such holder's
behalf) the right to require the repurchase, redemption or repayment of all
or a portion of such indebtedness by the Company or any of its
subsidiaries.
(21) Absence of Labor Dispute. No labor dispute with the employees of
-----------------------------
the Company or any of its subsidiaries exists or, to the knowledge of the
Company, is imminent, and the Company is not aware of any existing or
imminent labor disturbance by the employees of any of its or any
subsidiary's principal suppliers, manufacturers, customers or contractors,
which, in either case, may reasonably be expected to result in a Material
Adverse Effect.
(22) Absence of Proceedings. There is no action, suit, proceeding,
---------------------------
inquiry or investigation before or brought by any court or governmental
agency or body, domestic or foreign, now pending, or, to the knowledge of
the Company, threatened, against or affecting the Company or any of its
subsidiaries which is required to be disclosed in the Registration
Statement and the Prospectus (other than as stated therein), or which might
reasonably be expected to result in a Material Adverse Effect, or which
might reasonably be expected to materially and adversely affect the assets,
properties or operations thereof or the consummation of the transactions
contemplated under the Prospectus, this Underwriting Agreement, the
applicable Terms Agreement or any applicable Indenture, Warrant Agreement
or Deposit Agreement or the performance by the Company of its obligations
hereunder and thereunder. The aggregate of all pending legal or
governmental proceedings to which the Company or any of its subsidiaries is
a party or of which any of their respective assets, properties or
operations is the subject which are not described in the Registration
Statement and the Prospectus, including ordinary routine litigation
incidental to the business, could not reasonably be expected to result in a
Material Adverse Effect.
(23) Accuracy of Exhibits. There are no contracts or documents which
-------------------------
are required to be described in the Registration Statement, the Prospectus
or the documents incorporated by reference therein or to be filed as
exhibits thereto which have not been so described and filed as required.
(24) Absence of Further Requirements. No filing with, or
------------------------------------
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency,
domestic or foreign, is necessary or required for the due authorization,
execution and delivery by the Company of this Underwriting Agreement or the
applicable Terms Agreement or for the performance by the Company of the
transactions contemplated under the Prospectus, this Underwriting
Agreement, such Terms Agreement or any applicable Indenture, Warrant
Agreement or Deposit Agreement, except such as have been already made,
obtained or rendered, as applicable, or as may be required under the 1933
Act or the 1933 Act Regulations and foreign or state securities or blue sky
laws.
(25) Possession of Intellectual Property. The Company and its
----------------------------------------
subsidiaries own or possess, or can acquire on reasonable terms, adequate
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented
12
and/or unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names or other intellectual
property (collectively, "Intellectual Property") necessary to carry on the
business now operated by them, and neither the Company nor any of its
subsidiaries has received any notice or is otherwise aware of any
infringement of or conflict with asserted rights of others with respect to
any Intellectual Property or of any facts or circumstances which would
render any Intellectual Property invalid or inadequate to protect the
interest of the Company or any of its subsidiaries therein, and which
infringement or conflict (if the subject of any unfavorable decision,
ruling or finding) or invalidity or inadequacy, singly or in the aggregate,
would result in a Material Adverse Effect.
(26) Possession of Licenses and Permits. The Company and its
---------------------------------------
subsidiaries possess such permits, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued by the
appropriate federal, state, local or foreign regulatory agencies or bodies
necessary to conduct the business now operated by them. The Company and
its subsidiaries are in compliance with the terms and conditions of all
such Governmental Licenses, except where the failure so to comply would
not, singly or in the aggregate, result in a Material Adverse Effect. All
of the Governmental Licenses are valid and in full force and effect, except
where the invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not result in a
Material Adverse Effect. Neither the Company nor any of its subsidiaries
has received any notice of proceedings relating to the revocation or
modification of any such Governmental Licenses which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding,
would result in a Material Adverse Effect.
(27) Title to Property. The Company and its subsidiaries have good and
----------------------
marketable title to all real property owned by the Company and its
subsidiaries and good title to all other properties owned by them, in each
case, free and clear of all mortgages, pledges, liens, security interests,
claims, restrictions or encumbrances of any kind, except (A) as otherwise
stated in the Registration Statement and the Prospectus or (B) those which
do not, singly or in the aggregate, materially affect the value of such
property and do not interfere with the use made and proposed to be made of
such property by the Company or any of its subsidiaries. All of the leases
and subleases material to the business of the Company and its subsidiaries
considered as one enterprise, and under which the Company or any of its
subsidiaries holds properties described in the Prospectus, are in full
force and effect, and neither the Company nor any of its subsidiaries has
received any notice of any material claim of any sort that has been
asserted by anyone adverse to the rights of the Company or any of its
subsidiaries under any of the leases or subleases mentioned above, or
affecting or questioning the rights of the Company or such subsidiary of
the continued possession of the leased or subleased premises under any such
lease or sublease.
(28) Investment Company Act. The Company is not, and upon the issuance
---------------------------
and sale of the Underwritten Securities as herein contemplated and the
application of the net proceeds therefrom as described in the Prospectus
will not be, an "investment company" or an entity "controlled" by an
"investment company", as such terms are defined in the Investment Company
Act of 1940, as amended (the "1940 Act").
13
(29) Environmental Laws. Except as otherwise stated in the
-----------------------
Registration Statement and the Prospectus and except as would not, singly
or in the aggregate, result in a Material Adverse Effect, (A) neither the
Company nor any of its subsidiaries is in violation of any federal, state,
local or foreign statute, law, rule, regulation, ordinance, code, policy or
rule of common law or any judicial or administrative interpretation thereof
including any judicial or administrative order, consent, decree or
judgment, relating to pollution or protection of human health, the
environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including,
without limitation, laws and regulations relating to the release or
threatened release of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials (collectively, "Environmental Laws"), (B) neither the
Company nor any of its subsidiaries fails to possess any permit,
authorization or approval required under any applicable Environmental Laws
or to be in compliance with their requirements, (C) there are no pending or
threatened administrative, regulatory or judicial actions, suits, demands,
demand letters, claims, liens, notices of noncompliance or violation,
investigation or proceedings relating to any Environmental Law against the
Company or any of its subsidiaries and (D) there are no events or
circumstances that might reasonably be expected to form the basis of an
order for clean-up or remediation, or an action, suit or proceeding by any
private party or governmental body or agency, against or affecting the
Company or any of its subsidiaries relating to Hazardous Materials or any
Environmental Laws.
(b) Officers' Certificates. Any certificate signed by any officer of the
Company or any of its subsidiaries and delivered to any Underwriter or to
counsel for the Underwriters in connection with the offering of the Underwritten
Securities shall be deemed a representation and warranty by the Company to each
Underwriter as to the matters covered thereby on the date of such certificate.
SECTION 2. Sale and Delivery to Underwriters; Closing.
------------------------------------------
(a) Underwritten Securities. The several commitments of the Underwriters to
purchase the Underwritten Securities pursuant to the applicable Terms Agreement
shall be deemed to have been made on the basis of the representations,
warranties and agreements herein contained and shall be subject to the terms and
conditions herein set forth.
(b) Option Underwritten Securities. Subject to the terms and conditions
herein set forth, the Company may grant, if so provided in the applicable Terms
Agreement, an option to the Underwriters, severally and not jointly, to purchase
up to the number or aggregate principal amount, as the case may be, of the
Option Underwritten Securities set forth therein at a price per Option
Underwritten Security equal to the price per Initial Underwritten Security, less
an amount equal to any dividends or distributions declared by the Company and
paid or payable on the Initial Underwritten Securities but not payable on the
Option Underwritten Securities. Such option, if granted, will expire 30 days
after the date of such Terms Agreement, and may be exercised in whole or in part
from time to time only for the purpose of covering over-allotments which may be
made in connection with the offering and distribution of the Initial
Underwritten
14
Securities upon notice by Merrill Lynch to the Company setting forth the number
or aggregate principal amount, as the case may be, of Option Underwritten
Securities as to which the several Underwriters are then exercising the option
and the time, date and place of payment and delivery for such Option
Underwritten Securities. Any such time and date of payment and delivery (each,
a "Date of Delivery") shall be determined by Merrill Lynch, but shall not be
later than seven full business days after the exercise of said option, nor in
any event prior to the Closing Time, unless otherwise agreed upon by Merrill
Lynch and the Company. If the option is exercised as to all or any portion of
the Option Underwritten Securities, each of the Underwriters, severally and not
jointly, will purchase that proportion of the total number or aggregate
principal amount, as the case may be, of Option Underwritten Securities then
being purchased which the number or aggregate principal amount, as the case may
be, of Initial Underwritten Securities each such Underwriter has severally
agreed to purchase as set forth in such Terms Agreement bears to the total
number or aggregate principal amount, as the case may be, of Initial
Underwritten Securities, subject to such adjustments as Merrill Lynch in its
discretion shall make to eliminate any sales or purchases of a fractional number
or aggregate principal amount, as the case may be, of Option Underwritten
Securities.
(c) Payment. Payment of the purchase price for, and delivery of, the
Initial Underwritten Securities shall be made at the offices of Cravath, Swaine
& Moore, 825 Eighth Avenue, New York, New York 10019, or at such other place as
shall be agreed upon by Merrill Lynch and the Company, at 9:00 A.M. (Eastern
time) on the third (fourth, if the pricing occurs after 4:30 P.M. (Eastern time)
on any given day) business day after the date of the applicable Terms Agreement
(unless postponed in accordance with the provisions of Section 10 hereof), or
such other time not later than ten business days after such date as shall be
agreed upon by Merrill Lynch and the Company (such time and date of payment and
delivery being herein called "Closing Time"). In addition, in the event that
the Underwriters have exercised their option, if any, to purchase any or all of
the Option Underwritten Securities, payment of the purchase price for, and
delivery of such Option Underwritten Securities, shall be made at the
above-mentioned offices of Cravath, Swaine & Moore, or at such other place as
shall be agreed upon by Merrill Lynch and the Company, on the relevant Date of
Delivery as specified in the notice from Merrill Lynch to the Company.
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery to
Merrill Lynch for the respective accounts of the Underwriters of the
Underwritten Securities to be purchased by them. It is understood that each
Underwriter has authorized Merrill Lynch, for its account, to accept delivery
of, receipt for, and make payment of the purchase price for, the Underwritten
Securities which it has severally agreed to purchase. Merrill Lynch,
individually and not as representative of the Underwriters, may (but shall not
be obligated to) make payment of the purchase price for the Underwritten
Securities to be purchased by any Underwriter whose funds have not been received
by the Closing Time or the relevant Date of Delivery, as the case may be, but
such payment shall not relieve such Underwriter from its obligations hereunder.
(d) Denominations; Registration. The Underwritten Securities, certificates
for the Underwritten Securities or Depositary Receipts evidencing the Depositary
Shares, as applicable, shall be in such denominations and registered in such
names as Merrill Lynch may request in writing at least one full business day
prior to the Closing Time or the relevant Date of Delivery,
15
as the case may be. The Underwritten Securities, certificates for the
Underwritten Securities or Depositary Receipts evidencing the Depositary Shares,
as applicable, will be made available for examination and packaging by Merrill
Lynch in The City of New York not later than 10:00 A.M. (Eastern time) on the
business day prior to the Closing Time or the relevant Date of Delivery, as the
case may be.
SECTION 3. Covenants of the Company. The Company covenants with Merrill
------------------------
Lynch and with each Underwriter participating in the offering of Underwritten
Securities, as follows:
(a) Compliance with Securities Regulations and Commission Requests. The
Company, subject to Section 3(b), will comply with the requirements of Rule 430A
of the 1933 Act Regulations and/or Rule 434 of the 1933 Act Regulations, if and
as applicable, and will notify the Representative(s) immediately, and confirm
the notice in writing, of (i) the effectiveness of any post-effective amendment
to the Registration Statement or the filing of any supplement or amendment to
the Prospectus, (ii) the receipt of any comments from the Commission, (iii) any
request by the Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for additional information, and
(iv) the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing or
suspending the use of any preliminary prospectus, or of the suspension of the
qualification of the Underwritten Securities for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings for any of
such purposes. The Company will promptly effect the filings necessary pursuant
to Rule 424 and will take such steps as it deems necessary to ascertain promptly
whether the Prospectus transmitted for filing under Rule 424 was received for
filing by the Commission and, in the event that it was not, it will promptly
file the Prospectus. The Company will make every reasonable effort to prevent
the issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible moment.
(b) Filing of Amendments. The Company will give Merrill Lynch notice of its
intention to file or prepare any amendment to the Registration Statement
(including any filing under Rule 462(b) of the 1933 Act Regulations), any Term
Sheet or any amendment, supplement or revision to either the prospectus included
in the Registration Statement at the time it became effective or to the
Prospectus, whether pursuant to the 1933 Act, the 1934 Act or otherwise, will
furnish Merrill Lynch with copies of any such documents a reasonable amount of
time prior to such proposed filing or use, as the case may be, and will not file
or use any such document to which Merrill Lynch or counsel for the Underwriters
shall object.
(c) Delivery of Registration Statements. The Company has furnished or will
deliver to Merrill Lynch and counsel for the Underwriters, without charge,
signed copies of the Registration Statement as originally filed and of each
amendment thereto (including exhibits filed therewith or incorporated by
reference therein and documents incorporated or deemed to be incorporated by
reference therein) and signed copies of all consents and certificates of
experts, and will also deliver to Merrill Lynch, without charge, a conformed
copy of the Registration Statement as originally filed and of each amendment
thereto (without exhibits) for each of the Underwriters. The Registration
Statement and each amendment thereto furnished to the Underwriters will be
identical to any electronically transmitted copies thereof filed with the
Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
16
(d) Delivery of Prospectuses. The Company will deliver to each Underwriter,
without charge, as many copies of each preliminary prospectus as such
Underwriter may reasonably request, and the Company hereby consents to the use
of such copies for purposes permitted by the 1933 Act. The Company will furnish
to each Underwriter, without charge, during the period when the Prospectus is
required to be delivered under the 1933 Act or the 1934 Act, such number of
copies of the Prospectus as such Underwriter may reasonably request. The
Prospectus and any amendments or supplements thereto furnished to the
Underwriters will be identical to any electronically transmitted copies thereof
filed with the Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will comply with
the 1933 Act and the 1933 Act Regulations and the 1934 Act and the 1934 Act
Regulations so as to permit the completion of the distribution of the
Underwritten Securities as contemplated in this Underwriting Agreement and the
applicable Terms Agreement and in the Registration Statement and the
Prospectus. If at any time when the Prospectus is required by the 1933 Act or
the 1934 Act to be delivered in connection with sales of the Securities, any
event shall occur or condition shall exist as a result of which it is
necessary, in the opinion of counsel for the Underwriters or for the Company,
to amend the Registration Statement in order that the Registration Statement
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 or to amend or supplement the Prospectus in order that
the Prospectus will not include an untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the opinion of such
counsel, at any such time to amend the Registration Statement or amend or
supplement the Prospectus in order to comply with the requirements of the 1933
Act or the 1933 Act Regulations, the Company will promptly prepare and file
with the Commission, subject to Section 3(b), such amendment or supplement as
may be necessary to correct such statement or omission or to make the
Registration Statement or the Prospectus comply with such requirements, and the
Company will furnish to the Underwriters, without charge, such number of copies
of such amendment or supplement as the Underwriters may reasonably request.
(f) Blue Sky Qualifications. The Company will use its best efforts, in
cooperation with the Underwriters, to qualify the Underwritten Securities and
any related Underlying Securities for offering and sale under the applicable
securities laws of such states and other jurisdictions (domestic or foreign) as
Merrill Lynch may designate and to maintain such qualifications in effect for a
period of not less than one year from the date of the applicable Terms
Agreement; provided, however, that the Company shall not be obligated to file
any general consent to service of process or to qualify as a foreign corporation
or as a dealer in securities in any jurisdiction in which it is not so qualified
or to subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject. In each jurisdiction in
which the Underwritten Securities or any related Underlying Securities have been
so qualified, the Company will file such statements and reports as may be
required by the laws of such jurisdiction to continue such qualification in
effect for a period of not less than one year from the date of such Terms
Agreement.
17
(g) Earnings Statement. The Company will timely file such reports pursuant
to the 1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.
(h) Reservation of Securities. If the applicable Terms Agreement specifies
that any related Underlying Securities include Common Stock, Preferred Stock
and/or Depositary Shares, the Company will reserve and keep available at all
times, free of preemptive or other similar rights, a sufficient number of shares
of Common Stock and/or Preferred Stock, as applicable, for the purpose of
enabling the Company to satisfy any obligations to issue such Underlying
Securities upon exercise of the related Warrants, as applicable, or upon
conversion of the Preferred Stock, Depositary Shares, Senior Debt Securities or
Subordinated Debt Securities, as applicable.
(i) Use of Proceeds. The Company will use the net proceeds received by it
from the sale of the Underwritten Securities in the manner specified in the
Prospectus under "Use of Proceeds".
(j) Listing. The Company will use its best efforts to effect the listing of
the Underwritten Securities and any related Underlying Securities, prior to the
Closing Time, on any national securities exchange or quotation system if and as
specified in the applicable Terms Agreement.
(k) Restriction on Sale of Securities. Between the date of the applicable
Terms Agreement and the Closing Time or such other date specified in such Terms
Agreement, the Company will not, without the prior written consent of Merrill
Lynch, directly or indirectly, issue, sell, offer or contract to sell, grant any
option for the sale of, or otherwise dispose of, the securities specified in
such Terms Agreement.
(l) Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will
file all documents required to be filed with the Commission pursuant to the 1934
Act within the time periods required by the 1934 Act and the 1934 Act
Regulations.
SECTION 4. Payment of Expenses.
-------------------
(a) Expenses. The Company will pay all expenses incident to the performance
of its obligations under this Underwriting Agreement or the applicable Terms
Agreement, including (i) the preparation, printing and filing of the
Registration Statement (including financial statements and exhibits) as
originally filed and of each amendment thereto, (ii) the preparation, printing
and delivery to the Underwriters of this Underwriting Agreement, any Terms
Agreement, any Agreement among Underwriters, the Indentures, any Deposit
Agreement, any Warrant Agreement and such other documents as may be required in
connection with the offering, purchase, sale, issuance or delivery of the
Underwritten Securities or any related Underlying Securities, (iii) the
preparation, issuance and delivery of the Underwritten Securities and any
related Underlying Securities, any certificates for the Underwritten Securities
or such Underlying Securities or Depositary Receipts evidencing the Depositary
Shares, as applicable, to the
18
Underwriters, including any transfer taxes and any stamp or other duties payable
upon the sale, issuance or delivery of the Underwritten Securities to the
Underwriters, (iv) the fees and disbursements of the Company's counsel,
accountants and other advisors or agents (including transfer agents and
registrars), as well as the fees and disbursements of the Trustees, any
Depositary and any Warrant Agent, and their respective counsel, (v) the
qualification of the Underwritten Securities and any related Underlying
Securities under state securities laws in accordance with the provisions of
Section 3(f) hereof, including filing fees and the reasonable fees and
disbursements of counsel for the Underwriters in connection therewith and in
connection with the preparation, printing and delivery of the Blue Sky Survey,
and any amendment thereto, (vi) the printing and delivery to the Underwriters of
copies of each preliminary prospectus, any Term Sheet, and the Prospectus and
any amendments or supplements thereto, (vii) the fees charged by nationally
recognized statistical rating organizations for the rating of the Underwritten
Securities and any related Underlying Securities, if applicable, (viii) the fees
and expenses incurred with respect to the listing of the Underwritten Securities
and any related Underlying Securities, if applicable, (ix) the filing fees
incident to, and the reasonable fees and disbursements of counsel to the
Underwriters in connection with, the review, if any, by the National Association
of Securities Dealers, Inc. (the "NASD") of the terms of the sale of the
Underwritten Securities and any related Underlying Securities, and (x) the fees
and expenses of any Underwriter acting in the capacity of a "qualified
independent underwriter" (as defined in Section 2(l) of Schedule E of the bylaws
of the NASD), if applicable.
(b) Termination of Agreement. If the applicable Terms Agreement is
terminated by Merrill Lynch in accordance with the provisions of Section 5 or
Section 9(b)(i) hereof, the Company shall reimburse the Underwriters for all of
their out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of the
---------------------------------------
Underwriters to purchase and pay for the Underwritten Securities pursuant to the
applicable Terms Agreement are subject to the accuracy of the representations
and warranties of the Company contained in Section 1 hereof or in certificates
of any officer of the Company or any of its subsidiaries delivered pursuant to
the provisions hereof, to the performance by the Company of its covenants and
other obligations hereunder, and to the following further conditions:
(a) Effectiveness of Registration Statement. The Registration Statement,
including any Rule 462(b) Registration Statement, has become effective under the
1933 Act and at Closing Time no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act and no
proceedings for that purpose shall have been instituted or be pending or
threatened by the Commission, and any request on the part of the Commission for
additional information shall have been complied with to the reasonable
satisfaction of counsel to the Underwriters. A prospectus containing
information relating to the description of the Underwritten Securities and any
related Underlying Securities, the specific method of distribution and similar
matters shall have been filed with the Commission in accordance with Rule
424(b)(1), (2), (3), (4) or (5), as applicable (or any required post-effective
amendment providing such information shall have been filed and declared
effective in accordance with the requirements of Rule 430A), or, if the Company
has elected to rely upon Rule 434 of the 1933 Act Regulations, a Term Sheet
including the Rule 434 Information shall have been filed with the Commission in
accordance with Rule 424(b)(7).
19
(b) Opinion of Counsel for Company. At Closing Time, Merrill Lynch shall
have received the favorable opinions, dated as of Closing Time, of Kirkpatrick &
Lockhart LLP, counsel for the Company, and Robert G. Jones, general counsel of
the Company, in form and substance satisfactory to counsel for the Underwriters,
together with signed or reproduced copies of such letters for each of the other
Underwriters, to the effect set forth in Exhibits B-1 and B-2 hereto and to such
further effect as counsel to the Underwriters may reasonably request.
(c) Opinion of Counsel for Underwriters. At Closing Time, Merrill Lynch
shall have received the favorable opinion and letter, dated as of Closing Time,
of Cravath, Swaine & Moore, counsel for the Underwriters, together with signed
or reproduced copies of such letter for each of the other Underwriters, with
respect to the sale of the Underwritten Securities, the Registration Statement,
the Prospectus and other related matters as the Underwriters may reasonably
require, and the Company shall have furnished to such counsel such documents as
they request for the purpose of enabling them to pass upon such matters.
(d) Officers' Certificate. At Closing Time, there shall not have been,
since the date of the applicable Terms Agreement or since the respective dates
as of which information is given in the Prospectus, any material adverse change
in the condition, financial or otherwise, or in the earnings, business affairs
or business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, and
Merrill Lynch shall have received a certificate of the President or a Vice
President of the Company and of the chief financial officer or chief accounting
officer of the Company, dated as of Closing Time, to the effect that (i) there
has been no such material adverse change, (ii) the representations and
warranties in Section 1(a) are true and correct with the same force and effect
as though expressly made at and as of the Closing Time, (iii) the Company has
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to the Closing Time, and (iv) no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceedings for that purpose have been instituted, are pending or, to the
best of such officer's knowledge, are threatened by the Commission.
(e) Accountant's Comfort Letter. At the time of the execution of the
applicable Terms Agreement, Merrill Lynch shall have received from Ernst & Young
LLP and Arthur Andersen LLP letters dated such date, in form and substance
satisfactory to Merrill Lynch, together with signed or reproduced copies of such
letters for each of the other Underwriters, containing statements and
information of the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain financial
information contained in the Registration Statement and the Prospectus.
(f) Bring-down Comfort Letter. At Closing Time, Merrill Lynch shall have
received from Ernst & Young LLP letters, dated as of Closing Time, to the effect
that they reaffirm the statements made in the letters furnished pursuant to
subsection (e) of this Section 5, except that the specified date referred to
shall be a date not more than three business days prior to the Closing Time.
(g) Ratings. At Closing Time and at any relevant Date of Delivery, unless
the Underwritten Securities being sold pursuant to the applicable Terms
Agreement relate solely to Common Stock or Common Stock Warrants, the
Underwritten Securities shall have the ratings
20
accorded by any "nationally recognized statistical rating organization", as
defined by the Commission for purposes of Rule 436(g)(2) of the 1933 Act
Regulations, if and as specified in the applicable Terms Agreement, and the
Company shall have delivered to Merrill Lynch a letter, dated as of such date,
from each such rating organization, or other evidence satisfactory to Merrill
Lynch, confirming that the Underwritten Securities have such ratings. Since the
time of execution of such Terms Agreement, there shall not have occurred a
downgrading in, or withdrawal of, the rating assigned to the Underwritten
Securities or any of the Company's other securities by any such rating
organization, and no such rating organization shall have publicly announced that
it has under surveillance or review its rating of the Underwritten Securities or
any of the Company's other securities.
(h) Approval of Listing. At Closing Time, the Underwritten Securities shall
have been approved for listing, subject only to official notice of issuance, if
and as specified in the applicable Terms Agreement.
(i) No Objection. If the Registration Statement or an offering of
Underwritten Securities has been filed with the NASD for review, the NASD shall
not have raised any objection with respect to the fairness and reasonableness of
the underwriting terms and arrangements.
(j) Lock-up Agreements. On the date of the applicable Terms Agreement,
Merrill Lynch shall have received, in form and substance satisfactory to it,
each lock-up agreement, if any, specified in such Terms Agreement as being
required to be delivered by the persons listed therein.
(k) Over-Allotment Option. In the event that the Underwriters are granted
an over-allotment option by the Company in the applicable Terms Agreement and
the Underwriters exercise their option to purchase all or any portion of the
Option Underwritten Securities, the representations and warranties of the
Company contained herein and the statements in any certificates furnished by the
Company or any of its subsidiaries hereunder shall be true and correct as of
each Date of Delivery, and, at the relevant Date of Delivery, Merrill Lynch
shall have received:
(1) A certificate, dated such Date of Delivery, of the President or a
Vice President of the Company and the chief financial officer or chief
accounting officer of the Company, confirming that the certificate
delivered at the Closing Time pursuant to Section 5(d) hereof remains true
and correct as of such Date of Delivery.
(2) The favorable opinions of Kirkpatrick & Lockhart LLP, counsel for
the Company, and Robert G. Jones, general counsel of the Company, each in
form and substance satisfactory to counsel for the Underwriters, dated such
Date of Delivery, relating to the Option Underwritten Securities and
otherwise to the same effect as the opinion required by Section 5(b)
hereof.
(3) The favorable opinion of Cravath, Swaine & Moore, counsel for the
Underwriters, dated such Date of Delivery, relating to the Option
Underwritten Securities and otherwise to the same effect as the opinion
required by Section 5(c) hereof.
21
(4) A letter from Ernst & Young LLP, in form and substance
satisfactory to Merrill Lynch and dated such Date of Delivery,
substantially in the same form and substance as the letter furnished to
Merrill Lynch pursuant to Section 5(f) hereof, except that the "specified
date" on the letter furnished pursuant to this paragraph shall be a date
not more than three business days prior to such Date of Delivery.
(5) Since the time of execution of such Terms Agreement, there shall
not have occurred a downgrading in, or withdrawal of, the rating assigned
to the Underwritten Securities or any of the Company's other securities by
any such rating organization, and no such rating organization shall have
publicly announced that it has under surveillance or review its rating of
the Underwritten Securities or any of the Company's other securities.
(l) Additional Documents. At Closing Time and at each Date of Delivery,
counsel for the Underwriters shall have been furnished with such documents and
opinions as they may require for the purpose of enabling them to pass upon the
issuance and sale of the Underwritten Securities as herein contemplated, or in
order to evidence the accuracy of any of the representations or warranties, or
the fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company in connection with the issuance and sale of the
Underwritten Securities as herein contemplated shall be satisfactory in form and
substance to Merrill Lynch and counsel for the Underwriters.
(m) Termination of Terms Agreement. If any condition specified in this
Section 5 shall not have been fulfilled when and as required to be fulfilled,
the applicable Terms Agreement (or, with respect to the Underwriters' exercise
of any applicable over-allotment option for the purchase of Option Underwritten
Securities on a Date of Delivery after the Closing Time, the obligations of the
Underwriters to purchase the Option Underwritten Securities on such Date of
Delivery) may be terminated by Merrill Lynch by notice to the Company at any
time at or prior to the Closing Time (or such Date of Delivery, as applicable),
and such termination shall be without liability of any party to any other party
except as provided in Section 4 and except that Sections 1, 6, 7 and 8 shall
survive any such termination and remain in full force and effect.
SECTION 6. Indemnification.
---------------
(a) Indemnification of Underwriters. The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act as follows:
(1) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including the Rule 430A Information and the
Rule 434 Information deemed to be a part thereof, if applicable, or the
omission or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein not misleading
or arising out of any untrue statement or alleged untrue statement of a
material fact included in any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto), or the omission or alleged omission
therefrom of a material fact necessary in order to make
22
the statements therein, in the light of the circumstances under which they
were made, not misleading;
(2) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
6(d) below) any such settlement is effected with the written consent of the
Company; and
(3) against any and all expense whatsoever, as incurred (including the
fees and disbursements of counsel chosen by Merrill Lynch), reasonably
incurred in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission, to
the extent that any such expense is not paid under (1) or (2) above;
provided, however, that this indemnity agreement shall not apply to any loss,
- -------- -------
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through Merrill Lynch expressly for use in the Registration
Statement (or any amendment thereto), including the Rule 430A Information and
the Rule 434 Information deemed to be a part thereof, if applicable, or any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto); and provided, further, that the Company will not be liable to any
-------- -------
Underwriter with respect to any Prospectus to the extent that the Company shall
sustain the burden of proving that any such loss, liability, claim, damage or
expense resulted from the fact that such Underwriter, in contravention of a
requirement of this Agreement or applicable law, sold Securities to a person to
whom such Underwriter failed to send or give, at or prior to the Closing Date, a
copy of the Prospectus, as then amended or supplemented if: (i) the Company has
previously furnished copies thereof (sufficiently in advance of the Closing Date
to allow for distribution by the Closing Date) to the Underwriter and the loss,
liability, claim, damage or expense of such Underwriter resulted from an untrue
statement or omission of a material fact contained in or omitted from any
preliminary prospectus which was corrected in the Prospectus as, if applicable,
amended or supplemented prior to the Closing Date and such Prospectus was
required by law to be delivered at or prior to the written confirmation of sale
to such person and (ii) such failure to give or send such Prospectus by the
Closing Date to the party or parties asserting such loss, liability, claim,
damage or expense would have constituted the sole defense to the claim asserted
by such person.
(b) Indemnification of Company, Directors and Officers. Each Underwriter
severally agrees to indemnify and hold harmless the Company, its directors, each
of its officers who signed the Registration Statement, and each person, if any,
who controls the Company within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act against any and all loss, liability, claim, damage
and expense described in the indemnity contained in subsection (a) of this
Section, as incurred, but only with respect to untrue statements or omissions,
or alleged untrue statements or omissions, made in the Registration Statement
(or any amendment thereto), including the Rule 430A Information and the Rule 434
Information deemed to be a part thereof,
23
if applicable, or any preliminary prospectus or the Prospectus (or any amendment
or supplement thereto) in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through Merrill Lynch
expressly for use in the Registration Statement (or any amendment thereto) or
such preliminary prospectus or the Prospectus (or any amendment or supplement
thereto).
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by Merrill Lynch, and, in
the case of parties indemnified pursuant to Section 6(b) above, counsel to the
indemnified parties shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(2) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
SECTION 7. Contribution. If the indemnification provided for in Section 6
------------
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate
24
to reflect the relative benefits received by the Company, on the one hand, and
the Underwriters, on the other hand, from the offering of the Underwritten
Securities pursuant to the applicable Terms Agreement or (ii) if the allocation
provided by clause (i) 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
Underwriters, on the other hand, in connection with the statements or omissions
which resulted in such losses, liabilities, claims, damages or expenses, as well
as any other relevant equitable considerations.
The relative benefits received by the Company, on the one hand, and the
Underwriters, on the other hand, in connection with the offering of the
Underwritten Securities pursuant to the applicable Terms Agreement shall be
deemed to be in the same respective proportions as the total net proceeds from
the offering of such Underwritten Securities (before deducting expenses)
received by the Company and the total underwriting discount received by the
Underwriters, in each case as set forth on the cover of the Prospectus, or, if
Rule 434 is used, the corresponding location on the Term Sheet bear to the
aggregate initial public offering price of such Underwritten Securities as set
forth on such cover.
The relative fault of the Company, on the one hand, and the Underwriters,
on the other hand, shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Underwritten Securities underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages which
such Underwriter has otherwise been required to pay by reason of any 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 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
25
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Company. The Underwriters'
respective obligations to contribute pursuant to this Section 7 are several in
proportion to the number or aggregate principal amount, as the case may be, of
Initial Underwritten Securities set forth opposite their respective names in the
applicable Terms Agreement, and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
--------------------------------------------------------------
All representations, warranties and agreements contained in this Underwriting
Agreement or the applicable Terms Agreement or in certificates of officers of
the Company or any of its subsidiaries submitted pursuant hereto or thereto
shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or controlling person, or
by or on behalf of the Company, and shall survive delivery of and payment for
the Underwritten Securities.
SECTION 9. Termination.
-----------
(a) Underwriting Agreement. This Underwriting Agreement (excluding the
applicable Terms Agreement) may be terminated for any reason at any time by the
Company or by Merrill Lynch upon the giving of 30 days' prior written notice of
such termination to the other party hereto.
(b) Terms Agreement. Merrill Lynch may terminate the applicable Terms
Agreement, by notice to the Company, at any time at or prior to the Closing Time
or any relevant Date of Delivery, if (i) there has been, since the time of
execution of such Terms Agreement or since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, or (ii)
there has occurred any material adverse change in the financial markets in the
United States or, if the Underwritten Securities or any related Underlying
Securities include Debt Securities denominated or payable in, or indexed to, one
or more foreign or composite currencies, in the international financial markets,
or any outbreak of hostilities or escalation thereof or other calamity or crisis
or any change or development involving a prospective change in national or
international political, financial or economic conditions, in each case the
effect of which is such as to make it, in the judgment of Merrill Lynch,
impracticable to market the Underwritten Securities or to enforce contracts for
the sale of the Underwritten Securities, or (iii) trading in any securities of
the Company has been suspended or materially limited by the Commission or the
New York Stock Exchange, or if trading generally on the New York Stock Exchange
or the American Stock Exchange or in the Nasdaq National Market has been
suspended or materially limited, or minimum or maximum prices for trading have
been fixed, or maximum ranges for prices have been required, by either of said
exchanges or by such system or by order of the Commission, the NASD or any other
governmental authority, or (iv) a banking moratorium has been declared by either
Federal or New York authorities or, if the Underwritten Securities or any
related Underlying Securities
26
include Debt Securities denominated or payable in, or indexed to, one or more
foreign or composite currencies, by the relevant authorities in the related
foreign country or countries.
(c) Liabilities. If this Underwriting Agreement or the applicable Terms
Agreement is terminated pursuant to this Section 9, such termination shall be
without liability of any party to any other party except as provided in Section
4 hereof, and provided further that Sections 1, 6, 7 and 8 shall survive such
termination and remain in full force and effect.
SECTION 10. Default by One or More of the Underwriters. If one or more of
------------------------------------------
the Underwriters shall fail at the Closing Time or the relevant Date of
Delivery, as the case may be, to purchase the Underwritten Securities which it
or they are obligated to purchase under the applicable Terms Agreement (the
"Defaulted Securities"), then Merrill Lynch shall have the right, within 24
hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, Merrill Lynch shall not have completed such
arrangements within such 24-hour period, then:
(a) if the number or aggregate principal amount, as the case may be,
of Defaulted Securities does not exceed 10% of the number or aggregate
principal amount, as the case may be, of Underwritten Securities to be
purchased on such date pursuant to such Terms Agreement, the non-defaulting
Underwriters shall be obligated, severally and not jointly, to purchase the
full amount thereof in the proportions that their respective underwriting
obligations under such Terms Agreement bear to the underwriting obligations
of all non-defaulting Underwriters, or
(b) if the number or aggregate principal amount, as the case may be,
of Defaulted Securities exceeds 10% of the number or aggregate principal
amount, as the case may be, of Underwritten Securities to be purchased on
such date pursuant to such Terms Agreement, such Terms Agreement (or, with
respect to the Underwriters' exercise of any applicable over-allotment
option for the purchase of Option Underwritten Securities on a Date of
Delivery after the Closing Time, the obligations of the Underwriters to
purchase, and the Company to sell, such Option Underwritten Securities on
such Date of Delivery) shall terminate without liability on the part of any
non-defaulting Underwriter.
No action taken pursuant to this Section 10 shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in (i) a termination
of the applicable Terms Agreement or (ii) in the case of a Date of Delivery
after the Closing Time, a termination of the obligations of the Underwriters and
the Company with respect to the related Option Underwritten Securities, as the
case may be, either Merrill Lynch or the Company shall have the right to
postpone the Closing Time or the relevant Date of Delivery, as the case may be,
for a period not exceeding seven days in order to effect any required changes in
the Registration Statement or the Prospectus or in any other documents or
arrangements.
27
SECTION 11. Notices. All notices and other communications hereunder shall
-------
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to Merrill Lynch at 4 World Financial Center, New
York, New York 10080, attention of Mr. Kevin Wilson; and notices to the Company
shall be directed to it at Arch Coal, Inc., CityPlace One, Suite 300, St. Louis,
Missouri 63141, attention of General Counsel.
SECTION 12. Parties. This Underwriting Agreement and the applicable Terms
-------
Agreement shall each inure to the benefit of and be binding upon the Company,
Merrill Lynch and, upon execution of such Terms Agreement, any other
Underwriters and their respective successors. Nothing expressed or mentioned in
this Underwriting Agreement or such Terms Agreement is intended or shall be
construed to give any person, firm or corporation, other than the Underwriters
and the Company and their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Underwriting Agreement or such Terms Agreement or any provision
herein or therein contained. This Underwriting Agreement and such Terms
Agreement and all conditions and provisions hereof and thereof are intended to
be for the sole and exclusive benefit of the parties hereto and thereto and
their respective successors, 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 Underwritten Securities from
any Underwriter shall be deemed to be a successor by reason merely of such
purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS UNDERWRITING AGREEMENT AND ANY
----------------------
APPLICABLE TERMS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY
TIME.
SECTION 14. Effect of Headings. The Article and Section headings herein
------------------
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
28
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
Underwriting Agreement, along with all counterparts, will become a binding
agreement between Merrill Lynch and the Company in accordance with its terms.
Very truly yours,
ARCH COAL, INC.
By: /s/ Robert J. Messey
------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/ Kevin Wilson
---------------------------------
Authorized Signatory
29
Exhibit A
ARCH COAL, INC.
(a Delaware corporation)
Debt Securities
Preferred Stock
Depository Shares
Common Stock
Warrants
TERMS AGREEMENT
---------------
[ ], 2001
To: Arch Coal, Inc.
CityPlace One
Suite 300
St. Louis, MO 63141
Ladies and Gentlemen:
We understand that Arch Coal, Inc., a Delaware corporation (the "Company"),
proposes to issue and sell [ shares of its common stock, par value $.01
per share (the "Common Stock")] [ shares of its preferred stock, par
value $.01 per share (the "Preferred Stock")] [in the form of
depositary shares (the "Depositary Shares") each representing of a share
of Preferred Stock] [$ aggregate principal amount of its [senior]
[subordinated] debt securities (the "Debt Securities")] [ warrants (the
"Common Stock Warrants") to purchase common stock, par value $.01 per share] [
warrants (the "Preferred Stock Warrants") to purchase preferred stock, par value
[ ] per share] [ warrants (the "Debt Security Warrants") to purchase $
aggregate principal amount of [senior] [subordinated] debt securities] ([such
securities also being hereinafter referred to as] the "[Initial] Underwritten
Securities"). Subject to the terms and conditions set forth or incorporated by
reference herein, we [the underwriters named below (the "Underwriters")] offer
to purchase [, severally and not jointly,] the [[number] [principal] [amount]
of] Underwritten Securities [opposite their names set forth below] at the
purchase price set forth below [, and a proportionate share of Option
Underwritten Securities set forth below, to the extent any are purchased].
A-1
[Number]
[Principal Amount]
Underwriter of [Initial] Underwritten Securities
---------------------------------------------------------------------------
________________
Total [$]
===
The Underwritten Securities shall have the following terms:
[Common Stock]
--------------
Title:
Number of shares:
Number of Option Underwritten Securities:
Initial public offering price per share: $
Purchase price per share: $
Listing requirements:
Black-out provisions:
Lock-up provisions:
Other terms and conditions:
Closing date and location:
[Preferred Stock]
-----------------
Title:
Rank:
Ratings:
Number of shares:
Number of Option Underwritten Securities:
Dividend rate (or formula) per share: $
Dividend payment dates:
Stated value: $
Liquidation preference per share: $
Redemption provisions:
Sinking fund requirements:
Conversion provisions:
Listing requirements:
Black-out provisions:
Lock-up provisions:
Initial public offering price per share: $___ plus accumulated dividends,
if any, from _____ Purchase price per share: $___ plus accumulated
dividends, if any, from _____
Other terms and conditions:
Closing date and location:
A-2
[Depositary Shares]
-------------------
Title:
Fractional amount of Preferred Stock represented by each Depositary Share:
Ratings:
Rank:
Number of shares:
Number of Option Underwritten Securities:
Dividend rate (or formula) per share:
Dividend payment dates:
Liquidation preference per share:
Redemption provisions:
Sinking fund requirements:
Conversion provisions:
Listing requirements:
Black-out provisions:
Lock-up provisions:
Initial public offering price per share: $____ plus accumulated dividends,
if any, from ___ Purchase price per share: $____ plus accumulated
dividends, if any, from ___
Other terms and conditions:
Closing date and location:
[Debt Securities]
-----------------
Title:
Rank:
Ratings:
Aggregate principal amount:
Denominations:
Currency of payment:
Interest rate or formula:
Interest payment dates:
Regular record dates:
Stated maturity date:
Redemption provisions:
Sinking fund requirements:
Conversion provisions:
Listing requirements:
Black-out provisions:
Fixed or Variable Price Offering: [Fixed] [Variable] Price Offering
If Fixed Price Offering, initial public offering price per share:
% of the principal amount, plus accrued interest [amortized original issue
discount], if any, from _________________.
Purchase price per share: ___% of principal amount, plus accrued interest
[amortized original issue discount], if any, from _________________.
A-3
Form:
Other terms and conditions:
Closing date and location:
A-4
[Common Stock] [Preferred Stock] [Debt Security] Warrants
---------------------------------------------------------
Title:
Type:
Number:
Warrant Agent:
Issuable jointly with [Common Stock] [Preferred Stock] [Debt Securities]:
[Yes] [No]
Number of [Common Stock] [Preferred Stock] [Debt Security] Warrants
issued with each [share of Common Stock] [share of Preferred Stock]
[$__________ principal amount of Debt Securities]:
Date(s) from which or period(s) during which [Common Stock] [Preferred
Stock] [Debt Security] Warrants are exercisable:
Date(s) on which [Common Stock] [Preferred Stock] [Debt Security] Warrants
expire:
Exercise price(s):
Initial public offering price: $
Purchase price: $
Title of Underlying Securities:
[Number of shares] [Principal amount] purchasable upon exercise of one
[Common Stock] [Preferred Stock] [Debt Security] Warrant:
Terms of Underlying Securities:
Other terms and conditions:
Closing date and location:
All of the provisions contained in the document attached as Annex I hereto
entitled "ARCH COAL, INC--Common Stock, Warrants to Purchase Common Stock,
Preferred Stock, Warrants to Purchase Preferred Stock, Depositary Shares, Debt
Securities and Warrants to Purchase Debt Securities--Underwriting Agreement" are
hereby incorporated by reference in their entirety herein and shall be deemed to
be a part of this Terms Agreement to the same extent as if such provisions had
been set forth in full herein. Terms defined in such document are used herein
as therein defined.
A-5
Please accept this offer no later than ____ o'clock P.M. (New York City
time) on ______________ by signing a copy of this Terms Agreement in the space
set forth below and returning the signed copy to us.
Very truly yours,
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By _________________________
Authorized Signatory
[Acting on behalf of itself and the other
named Underwriters.]
Accepted:
ARCH COAL, INC.
By _________________________
Name:
Title:
A-6
Exhibit B-1
FORM OF OPINION OF GENERAL COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(1) The Company is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to so qualify or
be in good standing would not result in a Material Adverse Effect.
(2) Each Subsidiary has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus and is
duly qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required, whether
by reason of the ownership or leasing of property or the conduct of business,
except where the failure to so qualify or be in good standing would not result
in a Material Adverse Effect. Except as otherwise described in the Prospectus,
all of the issued and outstanding capital stock of each Subsidiary has been duly
authorized and is validly issued, fully paid and non-assessable and, to the best
of my knowledge, is owned by the Company, directly or through subsidiaries, free
and clear of any security interest, mortgage, pledge, lien, encumbrance, claim
or equity. None of the outstanding shares of capital stock of any Subsidiary
was issued in violation of preemptive or other similar rights of any
securityholder of such Subsidiary.
(3) The shares of issued and outstanding capital stock of the Company have
been duly authorized and validly issued by the Company and are fully paid and
non-assessable, and none of such shares of capital stock was issued in violation
of preemptive or other similar rights of any securityholder of the Company.
(4) Neither the Company nor any of its subsidiaries is in violation of its
charter or by-laws and no default by the Company or any of its subsidiaries
exists in the due performance or observance of any material obligation,
agreement, covenant or condition contained in any contract, indenture, mortgage,
loan agreement, note, lease or other agreement or instrument that is described
or referred to in the Registration Statement or the Prospectus or filed or
incorporated by reference as an exhibit to the Registration Statement. Except
as set forth in the Prospectus, to the best of such counsel's knowledge there
are no options, warrants or other rights to purchase, agreements or other
obligations to issue, or rights to convert any obligations into or exchange any
securities for, shares of capital stock or ownership interests in the Company.
(5) The execution, delivery and performance of the Underwriting Agreement,
the applicable Terms Agreement and the [each] applicable [Indenture] [Warrant
Agreement] [Deposit Agreement] and any other agreement or instrument entered
into or issued or to be entered into or issued by the Company in connection with
the transactions contemplated in the Registration Statement and the Prospectus
and the consummation of the transactions
B-1-1
contemplated in the Underwriting Agreement and such Terms Agreement and in the
Registration Statement and the Prospectus (including the issuance and sale of
the Underwritten Securities and the use of the proceeds from the sale of the
Underwritten Securities as described under the caption "Use of Proceeds" and the
issuance of any Underlying Securities) and compliance by the Company with its
obligations thereunder do not and will not, whether with or without the giving
of notice or passage of time or both, conflict with or constitute a breach of,
or default or Repayment Event under or result in the creation or imposition of
any lien, charge or encumbrance upon any assets, properties or operations of the
Company or any of its subsidiaries pursuant to any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, lease or any other
agreement or instrument to which the Company or any subsidiary is a party or by
which it or any of them may be bound, or to which any of the assets, properties
or operations of the Company or any subsidiaries is subject (except for such
conflicts, breaches or defaults or liens, charges or encumbrances that would not
have a Material Adverse Effect), nor will such action result in any violation of
the provisions of the charter or by-laws of the Company or any subsidiary, or
any applicable law, statute, rule, regulation, judgment, order, writ or decree,
known to such counsel, of any government, government instrumentality or court,
domestic or foreign, having jurisdiction over the Company or any subsidiary or
any of their respective properties, assets or operations.
(6) To the best of my knowledge, there is not pending or threatened any
action, suit, proceeding, inquiry or investigation to which the Company or any
of its subsidiaries thereof is a party or to which the assets, properties or
operations of the Company or any of its subsidiaries thereof is subject, before
or by any court or governmental agency or body, domestic or foreign, which might
reasonably be expected to result in a Material Adverse Effect or which might
reasonably be expected to materially and adversely affect the assets, properties
or operations thereof or the consummation of the transactions contemplated under
the Underwriting Agreement, the applicable Terms Agreement or the [any]
applicable [Indenture] [Warrant Agreement] [Deposit Agreement] or the
performance by the Company of its obligations thereunder.
(7) All descriptions in the Prospectus of contracts and other documents to
which the Company or its subsidiaries are a party are accurate in all material
respects.
Nothing has come to my attention that causes me to believe that the
Registration Statement (including any Rule 462(b) Registration Statement) or any
amendment thereto, including the Rule 430A Information (except for financial
statements and schedules and other financial data included or incorporated by
reference therein or omitted therefrom and for the Form T-1s, as to which I need
make no statement), at the time the Registration Statement (including any Rule
462(b) Registration Statement) or any amendment thereto (including the filing of
the Company's Annual Report on Form 10-K with the Commission) became effective
or at the date of the applicable Terms Agreement, 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 amendment or supplement thereto (except for financial
statements and schedules and other financial data included or incorporated by
reference therein or omitted therefrom, as to which I need make no statement),
at the time the Prospectus was issued, at the time any such amended or
supplemented prospectus was issued or at the Closing Time, included or includes
an untrue statement of a material fact or omitted or
B-1-2
omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
B-1-3
Exhibit B-2
FORM OF OPINION OF
KIRKPATRICK & LOCKHART LLP
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(1) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware.
(2) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under, or as
contemplated under, the Underwriting Agreement and the applicable Terms
Agreement.
(3) [Include if the Prospectus contains a "Capitalization" section --] The
authorized, issued and outstanding shares of capital stock of the Company is as
set forth in the column entitled "Actual" under the caption "Capitalization"
(except for subsequent issuances thereof, if any, contemplated under the
Underwriting Agreement, pursuant to reservations, agreements or employee benefit
plans referred to in the Prospectus or pursuant to the exercise of convertible
securities or options referred to in the Prospectus).
(4) The Underwriting Agreement and the applicable Terms Agreement have
been duly authorized, executed and delivered by the Company.
(5) [Include if the Underwritten Securities being sold pursuant to the
applicable Terms Agreement include Common Stock --] The Underwritten Securities
have been duly authorized by the Company for issuance and sale pursuant to the
Underwriting Agreement and the applicable Terms Agreement. The Underwritten
Securities, when issued and delivered by the Company pursuant to the
Underwriting Agreement and such Terms Agreement against payment of the
consideration therefor specified in such Terms Agreement, will be validly
issued, fully paid and non-assessable and will not be subject to preemptive or
other similar rights of any securityholder of the Company. No holder of the
Underwritten Securities is or will be subject to personal liability by reason of
being such a holder. The form of certificate used to evidence the Underwritten
Securities is in due and proper form and complies with the applicable statutory
requirements, with any applicable requirements of the charter or by-laws of the
Company and with the requirements of the New York Stock Exchange.
(6) [Include if the Underwritten Securities being sold pursuant to the
applicable Terms Agreement include Preferred Stock and/or Depositary Shares --]
The Underwritten Securities have been duly authorized by the Company for
issuance and sale pursuant to the Underwriting Agreement and the applicable
Terms Agreement. The applicable Preferred Stock, when issued and delivered by
the Company pursuant to the Underwriting Agreement and such Terms Agreement
against payment of the consideration [therefor] [for the related Depositary
Shares] specified in such Terms Agreement, will be validly issued, fully paid
and non-assessable and will not be subject to preemptive or other similar rights
of any securityholder of the Company. In
B-2-1
addition, upon deposit by the Company of any Preferred Stock represented by
Depositary Shares with the applicable Depositary and the execution and delivery
by such Depositary of the Depositary Receipts evidencing such Depositary Shares,
in each case pursuant to the applicable Deposit Agreement, such Depositary
Shares will represent legal and valid interests in such Preferred Stock. No
holder of such Preferred Stock or Depositary Receipts evidencing such Depositary
Shares is or will be subject to personal liability by reason of being such a
holder. The form of certificate used to evidence the [Preferred Stock]
[Depositary Receipts evidencing Depositary Shares ] is in due and proper form
and complies with the applicable statutory requirements, with any applicable
requirements of the charter or by-laws of the Company and with the requirements
of the New York Stock Exchange.
(7) [Include if the Underwritten Securities being sold pursuant to the
applicable Terms Agreement include Depositary Shares --] The applicable Deposit
Agreement has been duly authorized, executed and delivered thereof by the
Company and (assuming due authorization, execution and delivery by the
applicable Depositary) constitutes a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally or by general equitable principles (regardless of whether enforcement
is considered in a proceeding in equity or at law). Each registered holder of a
Depositary Receipt under the applicable Deposit Agreement will be entitled to
the proportional rights, preferences and limitations of the Preferred Stock
represented by the Depositary Shares evidenced by such Depositary Receipt and to
such other rights as are granted to such registered holder in such Deposit
Agreement.
(8) [Include if the Underwritten Securities being sold pursuant to the
applicable Terms Agreement include Senior Debt Securities and/or Subordinated
Debt Securities --] The Underwritten Securities have been duly authorized by
the Company for issuance and sale pursuant to the Underwriting Agreement and the
applicable Terms Agreement. The Underwritten Securities, when issued and
authenticated in the manner provided for in the applicable Indenture and
delivered against payment of the consideration therefor specified in such Terms
Agreement, will constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally or by general equitable principles (regardless of whether enforcement
is considered in a proceeding in equity or at law), and except further as
enforcement thereof may be limited by requirements that a claim with respect to
any Debt Securities payable in a foreign or corporate currency (or a foreign or
composite currency judgment in respect of such claim) be converted into U.S.
dollars at a rate of exchange prevailing on a date determined pursuant to
applicable law or by governmental authority to limit, delay or prohibit the
making of payments outside the United States. The Underwritten Securities are
in the form contemplated by, and each registered holder thereof is entitled to
the benefits of, the applicable Indenture.
(9) [Include if the Underwritten Securities being sold pursuant to the
applicable Terms Agreement include Senior Debt Securities and/or Subordinated
Debt Securities or if Preferred Stock is, or Depositary Shares represented by
Preferred Stock are, convertible into Debt
B-2-2
Securities --] The [Each] applicable Indenture has been duly authorized,
executed and delivered by the Company and (assuming due authorization, execution
and delivery thereof by the applicable Trustee) constitutes a valid and binding
agreement of the Company, enforceable against the Company in accordance with its
terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally or by general equitable principles
(regardless of whether enforcement is considered in a proceeding in equity or at
law).
(10) [Include if the Underwritten Securities being sold pursuant to the
applicable Terms Agreement include Warrants --] The Underwritten Securities
have been duly authorized by the Company for issuance and sale pursuant to the
Underwriting Agreement and the applicable Terms Agreement. The Underwritten
Securities, when issued and authenticated in the manner provided for in the
applicable Warrant Agreement and delivered against payment of the consideration
therefor specified in such Terms Agreement, will constitute valid and binding
obligations of the Company, entitled to the benefits provided by such Warrant
Agreement and enforceable against the Company in accordance with their terms,
except as enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally or by general equitable principles (regardless of
whether enforcement is considered in a proceeding in equity or at law).
(11) [Include if the Underwritten Securities being sold pursuant to the
applicable Terms Agreement include Warrants --] The [Each] applicable Warrant
Agreement has been duly authorized, executed and delivered by the Company and
(assuming due authorization, execution and delivery thereof by the applicable
Warrant Agent) constitutes a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally or by general equitable principles (regardless of whether enforcement
is considered in a proceeding in equity or at law).
(12) [Include if the Underlying Securities related to the Underwritten
Securities being sold pursuant to the applicable Terms Agreement include Common
Stock, Preferred Stock or Depositary Shares --] The Underlying Securities have
been duly authorized and reserved for issuance by the Company [upon exercise of
the [Common Stock] [Preferred Stock] Warrants] [upon conversion of the related
[Preferred Stock] [Depositary Shares] [Senior Debt Securities] [Subordinated
Debt Securities]]. The Underlying Securities, when issued upon such [exercise]
[conversion], will be validly issued, fully paid and non-assessable and will not
be subject to preemptive or other similar rights of any securityholder of the
Company. No holder of the Underlying Securities is or will be subject to
personal liability by reason of being such a holder. [In addition, the
Underlying Securities, upon deposit by the Company of the Preferred Stock
represented thereby with the applicable Depositary and the execution and
delivery by such Depositary of the Depositary Receipts evidencing such
Underlying Securities, in each case pursuant to the applicable Deposit
Agreement, will represent legal and valid interests in such Preferred Stock.]
[Include if the Underlying Securities related to the Underwritten Securities
being sold pursuant to the applicable Terms Agreement include Senior Debt
Securities and/or Subordinated Debt Securities --] The Underlying Securities
have been duly authorized for
B-2-3
issuance by the Company [upon exercise of the Debt Security Warrants] [upon
conversion of the related [Preferred Stock] [Depositary Shares]]. The
Underlying Securities, when issued and authenticated in the manner provided for
in the applicable Indenture and delivered in accordance with the terms of the
[Debt Security Warrants] [related [Preferred Stock] [Depositary Shares]], will
constitute valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or other similar
laws affecting the enforcement of creditors' rights generally or by general
equitable principles (regardless of whether enforcement is considered in a
proceeding in equity or at law), and except further as enforcement thereof may
be limited by requirements that a claim with respect to any Debt Securities
payable in a foreign or composite currency (or a foreign or composite currency
judgment in respect of such claim) be converted into U.S. dollars at a rate of
exchange prevailing on a date determined pursuant to applicable law or by
governmental authority to limit, delay or prohibit the making of payments
outside the United States.
(13) The Underwritten Securities being sold pursuant to the applicable
Terms Agreement and the [each] applicable [Indenture] [Deposit Agreement]
[Warrant Agreement] conform, and any Underlying Securities, when issued and
delivered in accordance with the terms of the related Underwritten Securities,
will conform, in all material respects to the statements relating thereto
contained in the Prospectus and are in substantially the form filed or
incorporated by reference, as the case may be, as an exhibit to the Registration
Statement.
(14) The information in the Prospectus under "Description of Underwritten
Securities" and "Description of Underlying Securities", if any, or any caption
purporting to describe any such Securities, "Certain Federal Income Tax
Considerations", the information in the Annual Report on Form 10-K under
"Business--Legal Proceedings" and in the Registration Statement under Item 15,
to the extent that it constitutes matters of law, summaries of legal matters or
the Company's charter, bylaws or legal proceedings, or legal conclusions, has
been reviewed by us and is correct in all material respects.
(15) The execution, delivery and performance of the Underwriting Agreement,
the applicable Terms Agreement and the [each] applicable [Indenture] [Warrant
Agreement] [Deposit Agreement] and any other agreement or instrument entered
into or issued or to be entered into or issued by the Company in connection with
the transactions contemplated in the Registration Statement and the Prospectus
and the consummation of the transactions contemplated in the Underwriting
Agreement and such Terms Agreement and in the Registration Statement and the
Prospectus (including the issuance and sale of the Underwritten Securities and
the use of the proceeds from the sale of the Underwritten Securities as
described under the caption "Use of Proceeds" and the issuance of any Underlying
Securities) and compliance by the Company with its obligations thereunder do not
and will not, whether with or without the giving of notice or passage of time or
both, conflict with or constitute a breach of, or default or Repayment Event
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any assets, properties or operations of the Company or any of
its subsidiaries pursuant to, any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or any other agreement or instrument to
which the Company or any of its subsidiaries is a party or by which it or any of
them may be bound, or to which any of the assets, properties or operations of
the Company or any of its subsidiaries is subject, that is filed or incorporated
by
B-2-4
reference as an exhibit to the Registration Statement (except for such
conflicts, breaches or defaults or liens, charges or encumbrances that would not
have a Material Adverse Effect) nor will such action result in any violation of
the provisions of the charter or by-laws of the Company or any of its
subsidiaries or any applicable law, statute, rule, regulation, judgment, order,
writ or decree, known to us, of any government, government instrumentality or
court, domestic or foreign, having jurisdiction over the Company or any of its
subsidiaries or any of their assets, properties or operations.
(16) To the best of our knowledge, there are no franchises, contracts,
indentures, mortgages, loan agreements, notes, leases or other instruments
required to be described or referred to in the Prospectus or to be filed as
exhibits to the Registration Statement other than those described or referred to
therein or filed or incorporated by reference as exhibits thereto, and the
descriptions thereof or references thereto are correct in all material respects.
(17) To the best of our knowledge, there are no statutes or regulations
that are required to be described in the Prospectus that are not described as
required.
(18) The Registration Statement (including any Rule 462(b) Registration
Statement) has been declared effective under the 1933 Act. Any required filing
of the Prospectus pursuant to Rule 424(b) has been made in the manner and within
the time period required by Rule 424(b). To the best of our knowledge, no stop
order suspending the effectiveness of the Registration Statement (or such Rule
462(b) Registration Statement) has been issued under the 1933 Act and no
proceedings for that purpose have been initiated or are pending or threatened by
the Commission.
(19) The Registration Statement (including any Rule 462(b) Registration
Statement) and the Prospectus, excluding the documents incorporated by reference
therein, and each amendment or supplement to the Registration Statement
(including any Rule 462(b) Registration Statement) and Prospectus, excluding the
documents incorporated by reference therein, as of their respective effective or
issue dates (other than the financial statements and supporting schedules
included therein or omitted therefrom and each Trustee's Statement of
Eligibility on Form T-1 (the "Form T-1s"), as to which we express no opinion),
complied as to form in all material respects with the requirements of the 1933
Act and the 1933 Act Regulations.
(20) The documents incorporated by reference in the Prospectus (other than
the financial statements and supporting schedules therein or omitted therefrom,
as to which we express no opinion), when they were filed with the Commission
complied as to form in all material respects with the requirements of the 1934
Act and the rules and regulations of the Commission thereunder.
(21) No filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any court or governmental authority or
agency, domestic or foreign, is necessary or required for the due authorization,
execution or delivery by the Company of the Underwriting Agreement or the
applicable Terms Agreement or for the performance by the Company of the
transactions contemplated under the Prospectus, the Underwriting Agreement, such
Terms Agreement or the [any] applicable [Indenture] [Warrant Agreement] [Deposit
Agreement], other than under the 1933 Act, the 1933 Act Regulations, the 1939
Act and the 1939 Act Regulations, which have already been made, obtained or
rendered, as applicable.
B-2-5
(22) [Include if the Underwritten Securities being sold pursuant to the
applicable Terms Agreement include Debt Securities or if any related Underlying
Securities include Debt Securities --] The [Each] applicable Indenture has been
duly qualified under the 1939 Act.
(23) [Include if the Underwritten Securities being sold pursuant to the
applicable Terms Agreement include Debt Securities or if any related Underlying
Securities include Debt Securities --] The [Underwritten] [Underlying]
Securities, upon issuance, will be excluded or exempted under, or beyond the
purview of, the Commodity Exchange Act, as amended (the "Commodity Exchange
Act"), and the rules and regulations of the Commodity Futures Trading Commission
under the Commodity Exchange Act (the "Commodity Exchange Act Regulations").
(24) The Company is not, and upon the issuance and sale of the Underwritten
Securities as herein contemplated and the application of the net proceeds
therefrom as described in the Prospectus will not be, an "investment company" or
an entity "controlled" "by an investment company", as such terms are defined in
the Investment Company Act of 1940, as amended (the "1940 Act").
(25) The Rights under the Company's Shareholder Rights Plan to which
holders of the Securities are entitled have been duly authorized and validly
issued.
Nothing has come to our attention that would lead us to believe that the
Registration Statement (including any Rule 462(b) Registration Statement) or any
amendment thereto, including the Rule 430A Information (except for financial
statements and supporting schedules and other financial data included therein or
omitted therefrom and for the Form T-1s, as to which we make no statement), at
the time the Registration Statement (including any Rule 462(b) Registration
Statement) or any amendment thereto (including the filing of the Company's
Annual Report on Form 10-K with the Commission) became effective or at the date
of the applicable Terms Agreement, 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 amendment or supplement thereto (except for financial statements and
schedules and other financial data included or incorporated by reference therein
or omitted therefrom, as to which we make no statement), at the time the
Prospectus was issued, at the time any such amended or supplemented prospectus
was issued or at the Closing Time, included or includes an untrue statement of a
material fact or omitted or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
In rendering such opinion, we may rely, as to matters of fact (but not as
to legal conclusions), to the extent we deem proper, on certificates of
responsible officers of the Company and public officials. Such opinion shall
not state that it is to be governed or qualified by, or that it is otherwise
subject to, any treatise, written policy or other document relating to legal
opinions, including, without limitation, the Legal Opinion Accord of the ABA
Section of Business Law (1991).
B-2-6