EX. ____
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LIBERTY FINANCIAL COMPANIES, INC.
a Massachusetts corporation
[ ]
Underwriting Agreement
Dated: [o], 1998
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Table of Contents
Page
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SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company........................................................4
(1) Compliance with Registration Requirements..............................................5
(2) Incorporated Documents.................................................................5
(3) Independent Accountants................................................................6
(4) Financial Statements...................................................................6
(5) No Material Adverse Change in Business.................................................6
(6) Good Standing of the Company...........................................................7
(7) Good Standing of Subsidiaries..........................................................7
(8) Capitalization.........................................................................7
(9) Authorization of this Underwriting Agreement and Terms Agreement.......................8
(10) Authorization of Common Stock..........................................................8
(11) Authorization of Preferred Stock and/or Depositary Shares..............................8
(12) Authorization of Deposit Agreement.....................................................8
(13) Authorization of Senior Debt Securities................................................9
(14) Authorization of the Indenture.........................................................9
(15) Authorization of Warrants..............................................................9
(16) Authorization of Warrant Agreement....................................................10
(17) Authorization of Underlying Securities................................................10
(18) Descriptions of the Underwritten Securities, Underlying Securities,
Indenture, Deposit Agreement and Warrant Agreement....................................11
(19) Absence of Defaults and Conflicts.....................................................11
(20) Absence of Labor Dispute..............................................................12
(21) Absence of Proceedings................................................................12
(22) Accuracy of Exhibits..................................................................12
(23) Absence of Further Requirements.......................................................12
(24) Possession of Intellectual Property...................................................13
(25) Possession of Licenses and Permits....................................................13
(26) Title to Property.....................................................................13
(27) Commodity Exchange Act................................................................14
(28) Investment Company Act................................................................14
(29) Environmental Laws....................................................................14
(b) Officers' Certificates..............................................................................15
SECTION 2. Sale and Delivery to Underwriters; Closing.....................................................15
(a) Underwritten Securities.............................................................................15
(b) Option Underwritten Securities......................................................................15
(c) Payment.............................................................................................16
(d) Denominations; Registration.........................................................................16
SECTION 3. Covenants of the Company.......................................................................17
(a) Compliance with Securities Regulations and Commission Requests......................................17
(b) Filing of Amendments................................................................................17
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(c) Delivery of Registration Statements.................................................................17
(d) Delivery of Prospectuses............................................................................17
(e) Continued Compliance with Securities Laws...........................................................18
(f) Blue Sky Qualifications.............................................................................18
(g) Earnings Statement..................................................................................18
(h) Reservation of Securities...........................................................................18
(i) Use of Proceeds.....................................................................................19
(j) Listing.............................................................................................19
(k) Restriction on Sale of Securities...................................................................19
(l) Reporting Requirements..............................................................................19
SECTION 4. Payment of Expenses............................................................................19
(a) Expenses............................................................................................19
(b) Termination of Agreement............................................................................20
SECTION 5. Conditions of Underwriters' Obligations........................................................20
(a) Effectiveness of Registration Statement.............................................................20
(b) Opinion of Counsel for Company......................................................................21
(c) Opinion of Counsel for Underwriters.................................................................21
(d) Officers' Certificate...............................................................................22
(e) Accountant's Comfort Letter.........................................................................22
(f) Bring-down Comfort Letter...........................................................................22
(g) Ratings.............................................................................................23
(h) Approval of Listing.................................................................................23
(i) No Objection........................................................................................23
(j) Lock-up Agreements..................................................................................23
(k) Over-Allotment Option...............................................................................23
(l) Additional Documents................................................................................24
(m) Termination of Terms Agreement......................................................................24
SECTION 6. Indemnification................................................................................25
(a) Indemnification of Underwriters.....................................................................25
(b) Indemnification of Company, Directors and Officers..................................................26
(c) Actions against Parties; Notification...............................................................26
(d) Settlement without Consent if Failure to Reimburse..................................................27
SECTION 7. Contribution...................................................................................27
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.................................28
SECTION 9. Termination....................................................................................28
(a) Underwriting Agreement..............................................................................28
(b) Terms Agreement.....................................................................................28
(c) Liabilities.........................................................................................29
SECTION 10. Default by One or More of the Underwriters.....................................................29
SECTION 11. Notices........................................................................................31
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SECTION 12. Parties........................................................................................31
SECTION 13. GOVERNING LAW AND TIME.........................................................................31
SECTION 14. Effect of Headings.............................................................................31
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Draft of o
LIBERTY FINANCIAL COMPANIES, INC.
(a Massachusetts 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
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
Liberty Financial Companies, Inc., a Massachusetts corporation (the
"Company"),, proposes to issue and sell up to [o] 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 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 Designation")
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 under an indenture, dated as of o (the "Indenture"), between the
Company and State Street Bank and Trust Company, as trustee (the "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
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, Debt
Securities, or any combination thereof, initially issuable by the Company and
"Underlying Securities" shall mean the Common Stock, Preferred Stock, Depositary
Shares, Debt Securities issuable upon exercise of the Warrants, as applicable,
or upon conversion of the Preferred Stock, Depositary Shares, 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 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
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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-o) [and
pre-effective amendment[s] no[s]. o thereto] 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 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. 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 form
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, after such filing,
all references to "Registration Statement" shall also be deemed to include the
Rule 462 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 form first furnished to the Underwriters by the Company
in reliance upon Rule 434 of the 1933 Act Regulations, and all references in
this Underwriting Agreement to the date of the Prospectus shall mean the date of
the Term Sheet. A "preliminary prospectus" shall be deemed to refer to any
prospectus used before the Registration Statement became effective and 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 execution and
delivery of the applicable Terms Agreement. For purposes of this Underwriting
Agreement, all references to the Registration Statement, Prospectus, Term Sheet
or preliminary prospectus or to any amendment or 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").
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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 mean and 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. Each of the
Registration Statement and (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 any 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.
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 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 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
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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 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.
(3) Independent Accountants. The accountants who certified the
financial statements and supporting schedules 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, present fairly the financial position of
the Company and its consolidated subsidiaries at the dates indicated and
the statement of operations, stockholders' equity and cash flows of the
Company and its consolidated subsidiaries for the periods specified; said
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 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
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thereof are reasonable and the adjustments used therein are appropriate to
give effect to the transactions and circumstances referred to therein.]
(5) 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 amounts per share
that are consistent with past practice, there has been no dividend or
distribution of any kind declared, paid or made by the Company on any class
of its capital stock.
(6) 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 Commonwealth of Massachusetts and 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, 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.
(7) Good Standing of Subsidiaries. Keyport Life Insurance Company, The
Colonial Group, Inc., Stein Roe & Farnharm Incorporated, Newport Pacific
Management, Inc. and Liberty Asset Management Company (each, a "Subsidiary"
and, collectively, the "Subsidiaries"), 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 disclosed in the Registration Statement and the
Prospectus, all of the issued and outstanding capital stock of each such
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 the preemptive
or similar rights of any securityholder of such Subsidiary. The only
subsidiaries of the Company are (a) the subsidiaries listed on Schedule D
hereto and (b) certain other subsidiaries which, considered in the
aggregate as a single Subsidiary, do not constitute a "significant
subsidiary" as defined in Rule 1-02 of Regulation S-X.
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(8) 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.
(9) 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.
(10) 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 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.
(11) 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
Designation will be in full force and effect prior to the Closing Time.
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(12) 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.
(13) Authorization of Debt Securities. If the Underwritten Securities
being sold pursuant to the applicable Terms Agreement include 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 Underwriting Agreement and such Terms
Agreement. Such Underwritten Securities, when issued and authenticated in
the manner provided for in the 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 Indenture.
(14) Authorization of the Indenture. If the Underwritten Securities
being sold pursuant to the applicable Terms Agreement include Debt
Securities or if Preferred Stock is, or Depositary Shares represented by
Preferred Stock are, convertible into Debt Securities, the 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,
8
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).
(15) 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).
(16) Authorization of Warrant Agreement. If the Underwritten
Securities being sold pursuant to the applicable Terms Agreement include
Warrants, each applicable 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).
(17) 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 or 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
9
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 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
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 determined pursuant to applicable law or by
governmental authority to limit, delay or prohibit the making of payments
outside the United States.
(18) Descriptions of the Underwritten Securities, Underlying
Securities, Indenture, Deposit Agreement and Warrant Agreement. The
Underwritten Securities being sold pursuant to the applicable Terms
Agreement and the 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.
(19) 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 property or assets, of the
Company or any subsidiary is subject (collectively, "Agreements and
Instruments"), except for such defaults that would not result in a Material
Adverse Effect; and 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
10
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 property or assets of the Company
or any subsidiary pursuant to, the Agreements and Instruments (except for
such conflicts, breaches or defaults or liens, charges or encumbrances that
would not result in 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 of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over the
Company or any of its subsidiaries or any of their respective assets,
properties or operations. As used herein, a "Repayment Event" means any
event or condition which gives the holder of any note, debenture or 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 subsidiary.
(20) 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.
(21) 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 subsidiary
which is required to be disclosed in the Registration Statement and the
Prospectus (other than as disclosed 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 properties or assets
thereof or the consummation of the transactions contemplated under the
Prospectus, this Underwriting Agreement, the applicable Terms Agreement or
the 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
subsidiary is a party or of which any of their respective property or
assets 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.
(22) 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.
11
(23) 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.
(24) 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 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.
(25) 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, have a Material Adverse Effect; all of the
Governmental Licenses are valid and in full force and effect, except when
the invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not have in a
Material Adverse Effect; and 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.
(26) Title to Property. 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 Prospectuses, are in full force and effect, and
neither the Company nor any subsidiary has any notice of any material claim
of any sort that has been asserted by anyone adverse to the rights of the
Company or any subsidiary under any of the leases or subleases mentioned
above, or affecting or questioning the rights of the Company or such
subsidiary to the continued possession of the leased or subleased premises
under any such lease or sublease.
12
(27) Commodity Exchange Act. If the Underwritten Securities being sold
pursuant to the applicable Terms Agreement include Debt Securities or if
any related Underlying Securities include Debt Securities, as the case may
be, such Debt 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").
(28) Compliance with Cuba Act. The Company has complied with, and is
and will be in compliance with, the provisions of that certain Florida act
relating to disclosure of doing business with Cuba, codified as Section
517.075 of the Florida statutes, and the rules and regulations thereunder
(collectively, the "Cuba Act") or is exempt therefrom.
(29) 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" within the meaning of the Investment
Company Act of 1940, as amended (the "1940 Act").
(30) 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) the Company
and its subsidiaries have all permits, authorizations and approvals
required under any applicable Environmental Laws and are each 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
13
such certificate and, unless subsequently amended or supplemented, at each
Representation Date subsequent thereto.
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 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 Brown & Wood
LLP, One World Trade Center, New York, New York, 10048, or at such other place
as shall be agreed upon by Merrill Lynch and the Company, at 10:00 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
14
for, and delivery of such Option Underwritten Securities, shall be made at the
above-mentioned offices of Brown & Wood LLP, 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, 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.
15
(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.
(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
16
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.
(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 (which need not be
audited) 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.
17
(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 Underwriters, including any stock or other
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 [and, any fees and expenses incurred in
connection with the listing of the Underwriters Securities on the New York Stock
Exchange].
(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.
18
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 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).
(b) Opinion of Counsel for Company. At Closing Time, Merrill Lynch shall
have received the favorable opinion, dated as of Closing Time, of Choate, Hall &
Stewart, counsel for the Company, and John A. Benning, General Counsel of the
Company in form and substance satisfactory to counsel for the Underwriters,
together with signed or reproduced copies of such letter for each of the other
Underwriters, to the collective effect set forth in Exhibit B 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, dated as of Closing Time, of Brown &
Wood LLP, counsel for the Underwriters, together with signed or reproduced
copies of such letter for each of the other Underwriters, with respect to the
matters set forth in (1), (2), (6), (7) to (14), as applicable (it being
understood that any opinion required with respect to the Underwritten Securities
or Underlying Securities, as the case may be, not being subject to preemptive or
other similar rights of the securityholders of the Company shall be limited to
such rights arising by operation of law or under the charter or by-laws of the
Company), (15), (16) (solely as to the information in the Prospectus under
"Description of the Senior Debt Securities", "Description of Capital Stock",
"Description of Depositary Shares" and "Description of Warrants", if any, or any
caption purporting to describe any such Securities), (22), (23), (26) and the
penultimate paragraph of Exhibit B hereto. In giving such opinion, such counsel
may rely, as to all matters governed by the laws of jurisdictions other than the
law of the State of New York, the federal law of the United States and the
General Corporation Law of the State of Delaware, upon the opinions of counsel
satisfactory to Merrill Lynch. Such counsel may also state that, insofar as such
opinion involves factual matters, they have relied, to the extent they deem
proper, upon certificates of officers of the Company and its subsidiaries and
certificates of public officials.
19
(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 a letter dated such date, in form and substance satisfactory to Merrill
Lynch, together with signed or reproduced copies of such letter 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 a letter, dated as of Closing Time, to the
effect that they reaffirm the statements made in the letter 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 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.
20
(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 opinion of Choate, Hall & Stewart, counsel for the
Company, 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 Brown & Wood LLP, 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.
(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 or
the Company's financial strength or claims paying ability] 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
21
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, 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 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 of any claim
whatsoever based upon any such untrue statement or omission of such a
material fact, or any such alleged untrue statement or omission of such a
material fact; 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 out-of-pocket 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 of such a material fact, or any such
alleged untrue statement or omission of such a material fact, to the extent
that any such expense is not paid under (i) or (ii) above;
22
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, if applicable, or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto); and provided, further,
however, that as to any preliminary prospectus, any preliminary prospectus
supplement, the Prospectus or any amendment or supplement thereto, this
indemnity agreement shall not inure to the benefit of any Underwriter on account
of any loss, claim, damage, liability or action arising from the fact that such
Underwriter sold Securities to a person as to whom it shall be established that
there was not sent or given, at or prior to the written confirmation of such
sale, a copy of the Prospectus or of the Prospectus as then amended or
supplemented in any case where such delivery is required by the 1933 Act if the
Company has previously furnished copies thereof in sufficient quantity to such
Underwriter and the loss, claim, damage or liability of such Underwriter results
from an untrue statement or omission of a material fact contained in such
preliminary prospectus, preliminary prospectus supplement, Prospectus or
amendments or supplements thereto, which was corrected in the Prospectus or in
the Prospectus as then amended or supplemented.
(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, 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
23
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 payable under this agreement,
such indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 6(a)(ii) 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 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 of 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
24
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.
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.
25
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 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:
26
(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.
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 World Financial Center, North
Tower, New York, New York 10281-1201, attention of o; and notices to the Company
shall be directed to it at Liberty Financial Companies, Inc., 600 Atlantic
Avenue, 24th Floor, Boston, Massachusetts 02109-2891, attention of P. William
Gelnaw.
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
27
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,
LIBERTY FINANCIAL COMPANIES, INC.
By:______________________________
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:___________________________
Authorized Signatory
29
Exhibit A
[1]
([2])
[13]
TERMS AGREEMENT
---------------
[14]
To: [4]
[address of Issuer]
Ladies and Gentlemen:
We understand that LIBERTY FINANCIAL COMPANIES, INC., a Massachusetts
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 subordinated debt
securities (the "Debt Securities")] [ warrants (the "Common Stock Warrants") to
purchase common stock, par value [$.01] per share] [ warrants (the "Preferred
Stock Warrants") to purchase preferred stock, par value [$.01] per share] [
warrants (the "Debt Security Warrants") to purchase $ aggregate principal amount
of senior 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: $____ plus accumulated dividends, if any, from ___
Other terms and conditions:
Closing date and location:
[Debt Securities]
-----------------
Title:
Rank:
Ratings:
Aggregate principal amount:
Denominations:
Currency of payment:
Interest rate or formula:
Interest payment dates:
Regular record dates:
Stated maturity date:
Redemption provisions:
Sinking fund requirements:
Conversion provisions:
Listing requirements:
Black-out provisions:
Fixed or Variable Price Offering: [Fixed] [Variable] Price Offering
If Fixed Price Offering, initial public offering price per share: % of
the principal amount, plus accrued interest [amortized original issue
discount], if any, from _________________.
A-3
Purchase price per share: ___% of principal amount, plus accrued interest
[amortized original issue discount], if any, from _________________.
Form:
Other terms and conditions:
Closing date and location:
A-4
[Common Stock] [Preferred Stock] [Debt Security] Warrants
---------------------------------------------------------
Title:
Type:
Number:
Warrant Agent:
Issuable jointly with [Common Stock] [Preferred Stock] [Debt Securities]:
[Yes] [No]
Number of [Common Stock] [Preferred Stock] [Debt Security] Warrants
issued with each [share of Common Stock] [share of Preferred Stock]
[$__________ 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 "[1]-- 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:
[1]
By _________________________
Name:
Title:
A-6
Exhibit B
FORM OF OPINION OF COMPANY'S COUNSEL
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 Commonwealth of
Massachusetts.
(2) The Company has corporate power and authority to own its properties and
conduct its business as described in the Prospectus and to enter into and
perform its obligations under the Underwriting Agreement and the applicable
Terms Agreement.
(3) 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.
(4) Each Subsidiary has been duly organized or incorporated and is validly
existing as a corporation in good standing under the laws of the jurisdiction of
its organization or incorporation, has all necessary corporate power and
authority to own, lease and operate its properties and to conduct its business
as described in the Prospectuses 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, with respect to the foregoing, for
failures which (taken collectively) would not result in a Material Adverse
Effect. All of the issued and outstanding capital stock of each Subsidiary has
been duly authorized and validly issued, is fully paid and non-assessable and,
to 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 the preemptive or similar rights of any securityholder of
such Subsidiary.
(5) [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). 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.
(6) The Underwriting Agreement and the applicable Terms Agreement have been
duly authorized, executed and delivered by the Company.
B-1
(7) [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].
(8) [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 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 [o Stock Exchange/Nasdaq
National Market].
(9) [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.
B-2
(10) [Include if the Underwritten Securities being sold pursuant to the
applicable Terms Agreement include 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.
(11) [Include if the Underwritten Securities being sold pursuant to the
applicable Terms Agreement include Debt Securities or if Preferred Stock is, or
Depositary Shares represented by Preferred Stock are, convertible into Debt
Securities --] The 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).
(12) [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).
(13) [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
B-3
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).
(14) [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] [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 Debt Securities --] The Underlying Securities have been duly authorized
for 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.
(15) 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.
(16) The information in the Prospectus under "Description of the Senior
Debt Securities", "Description of Capital Stock", "Description of Depositary
Shares" and "Description of Warrants" or any caption purporting to describe any
such Securities, [ "Certain Federal
B-4
Income Tax Considerations"] and "o", in the Annual Report on Form 10-K under
"o"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]
[me] them and is correct in all material respects [; and [our] [my] opinion set
forth under "Certain Federal Income Tax Considerations" is confirmed].
(17) To the best of [our] [my] knowledge, 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.
(18) 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,
known to [us] [me], 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,
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] [me],
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.
(19) To [our] [my] knowledge, there is not pending or threatened any
action, suit, proceeding, inquiry or investigation, to which the Company or any
subsidiary is a party, or to which the property of the Company or any subsidiary
is subject, before or brought 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 concerns any of the transactions contemplated in 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.
(20) 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. To [our] [my]
B-5
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.
(21) To the best of [our] [my] knowledge, there are no statutes or
regulations that are required to be described in the Prospectus that are not
described as required.
(22) The Registration Statement (including any Rule 462(b) Registration
Statement) has been declared effective under the 1933 Act; the 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); and to the best of [our] [my]
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 instituted or are pending
or threatened by the Commission.
(23) The Registration Statement (including any Rule 462(b) Registration
Statement) and the Prospectus, excluding documents incorporated therein by
reference, and each amendment or supplement to the Registration Statement
(including any Rule 462(b) Registration Statement) and Prospectus, excluding the
documents incorporated therein by reference, as of their respective effective or
issue dates (it being understood that we express no opinion as to any financial
statements (including the notes thereto), schedules and other financial data
contained in the Registration Statement or the Prospectus and each Trustee's
Statement of Eligibility on Form T-1 (the "Form T-1s"), as to which [we] [I]
express no opinion) complied as to form in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations.
(24) The documents incorporated by reference in the Prospectus (it being
understood that we express no opinion as to any financial statements (including
the notes thereto), schedules and other financial data contained in the
Registration Statement or the Prospectus), when they were filed with the
Commission, complied as to form in all material respects with the requirements
of the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Commission thereunder.
(25) 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.
(26) [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.
B-6
(27) [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").
(28) The Company is not an "investment company" or an entity "controlled"
by an "investment company," as such terms are defined in the 1940 Act.
Nothing has come to [our] [my] attention that would lead [us] [me] to
believe that the Registration Statement (including any Rule 462(b) Registration
Statement) or any post-effective amendment thereto (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] [I] make no
statement), at the time the Registration Statement (including any Rule 462(b)
Registration Statement) or any post-effective 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 supporting schedules and other financial data4 included therein
or omitted therefrom, as to which [we] [I] 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.
B-7
Annex I
[FORM OF ACCOUNTANTS' COMFORT LETTER PURSUANT TO SECTION 5(e)]
We are independent public accountants with respect to the Company and its
subsidiaries within the meaning of the 1933 Act and the 1933 Act Regulations
and:
(i) in our opinion, the audited consolidated financial statements and
the related financial statement schedules included or incorporated by
reference in the Registration Statement and the Prospectus comply as to
form in all material respects with the applicable accounting requirements
of the 1933 Act and the 1933 Act Regulations;
(ii) on the basis of procedures (but not an examination in accordance
with generally accepted auditing standards) consisting of a reading of the
unaudited interim consolidated financial statements of the Company for the
[three- month periods ended _________, 19__ and _________, 19__, the three-
and six-month periods ended _________, 19__ and _________, 19__ and the
three- and nine-month periods ended _________, 19__ and _________, 19__,
included or incorporated by reference in the Registration Statement and the
Prospectus (collectively, the "10-Q Financials")](1) [, a reading of the
unaudited interim consolidated financial statements of the Company for the
_____-month periods ended _________, 19___ and _________, 19___, included
or incorporated by reference in the Registration Statement and the
Prospectus (the "_____-month financials")](2) [, a reading of the latest
available unaudited interim consolidated financial statements of the
Company],(3) a reading of the minutes of all meetings of the stockholders
and directors of the Company and its subsidiaries and committees thereof
since [day after end of last audited period], inquiries of certain
officials of the Company and its subsidiaries responsible for financial and
accounting matters, a review of interim financial information in accordance
with standards established by the American Institute of Certified Public
Accountants in Statement on Auditing Standards No. 71, Interim Financial
Information ("SAS 71"),(4) with respect to the [description of relevant
periods](5)
- -------------------------
(1) Include the appropriate dates of the 10-Q Financials.
(2) Include if non-10-Q Financials are included or incorporated by reference in
the Registration Statement and the Prospectus.
(3) Include if the latest available unaudited financial statements are more
recent than the unaudited financial statements included or incorporated by
reference in the Registration Statement and the Prospectus.
(4) Note that a review in accordance with SAS 71 is required for an accountant
to give negative assurance on interim financial information. A review in
accordance with SAS 71 will only be performed at the request of the Company
and the accountant's report, if any, related to that review will be
addressed only to the Company. Many companies have a SAS 71 review
performed in connection with the preparation of their 10-Q Financials. See
Codification of Statements on Auditing Standards, AU ss. 722 for a
description of the procedures that constitute such a review. The comfort
letter itself should recite that the review was performed and a copy of the
report, if any, should be attached to the comfort letter. Any report issued
pursuant to SAS 71 that is mentioned in the Registration Statement should
also be included in the Registration Statement as an exhibit. If a review
in accordance with SAS 71 has not and will not be performed by the
accountants, they should be prepared to perform certain agreed-upon
procedures on the
(continued...)
Annex I-1
and such other inquiries and procedures as may be specified in such letter,
nothing came to our attention that caused us to believe that:
(A) the 10-Q Financials included or incorporated by reference in
the Registration Statement and the Prospectus do not comply as to form
in all material respects with the applicable accounting requirements
of the 1934 Act and the 1934 Act Regulations applicable to unaudited
financial statements included in Form 10-Q or any material
modifications should be made to the 10-Q Financials included or
incorporated by reference in the Registration Statement and the
Prospectus for them to be in conformity with generally accepted
accounting principles;
[(B) the _____-month financials included or incorporated by
reference in the Registration Statement and the Prospectus do not
comply as to form in all material respects with the applicable
accounting requirements of the 1933 Act and the 1933 Act Regulations
applicable to unaudited interim financial statements included in
registration statements or any material modifications should be made
to the _____-month financials included in the Registration Statement
and the Prospectus for them to be in conformity with generally
accepted accounting principles;](6)
(C) at [_________, 19___ and at](7) a specified date not more
than five days(8) prior to the date of the applicable Terms Agreement,
there was any change in the ___________ of the Company and its
subsidiaries, any decrease in the __________ of the Company and its
subsidiaries or any increase in the __________ of the Company and its
subsidiaries(9), in each case as compared with amounts shown in the
latest balance sheet included or incorporated by reference in the
Registration Statement and the Prospectus, except in each case for any
- -------------------------
...(continued)
interim financial information and to report their findings thereon in the
comfort letter. See Codification of Statements on Auditing Standards, AU
ss. 622 for a discussion of reports related to the accountant's performance
of agreed-upon procedures. Any question as to whether a review in
accordance with SAS 71 will be performed by the accountants should be
resolved early.
(5) The relevant periods include all interim unaudited consolidated financial
statements included or incorporated by reference in the Registration
Statement and the Prospectus.
(6) Include if unaudited financial statements, not just selected unaudited
data, are included or incorporated by reference in the Registration
Statement and the Prospectus.
(7) If the latest available unaudited financial statements are more recent than
the unaudited financial statements included or incorporated by reference in
the Registration Statement and the Prospectus, include and insert the date
of the latest available financial statements of the Company.
(8) According to Example A of SAS No. 72, the specified date should be five
calendar days prior to the date of the comfort letter. However, in unusual
circumstances, five business days may be used.
(9) The blanks should be filled in with significant balance sheet items,
selected by the banker and tailored to the issuer's industry in general and
operations in particular. While the ultimate decision of which items should
be included rests with the banker, comfort is routinely requested for
certain balance sheet items, including long-term debt, stockholders'
equity, capital stock and net current assets.
Annex I-2
changes, decreases or increases that the Registration Statement and
the Prospectus disclose have occurred or may occur; or
(D) for the period from [_________, 19__ to _________, 19__ and
for the period from](10) _________, 19__ to a specified date not more
than five days prior to the date of the applicable Terms Agreement,
there was any decrease in _________, __________ or ___________,(11) in
each case as compared with the comparable period in the preceding
year, except in each case for any decreases that the Registration
Statement and the Prospectus discloses have occurred or may occur;
[(iii) based upon the procedures set forth in clause (ii) above and a
reading of the Selected Financial Data included or incorporated by
reference in the Registration Statement and the Prospectus [and a reading
of the financial statements from which such data were derived],(12) nothing
came to our attention that caused us to believe that the Selected Financial
Data included or incorporated by reference in the Registration Statement
and the Prospectus do not comply as to form in all material respects with
the disclosure requirements of Item 301 of Regulation S-K of the 1933 Act
[, that the amounts included in the Selected Financial Data are not in
agreement with the corresponding amounts in the audited consolidated
financial statements for the respective periods or that the financial
statements not included or incorporated by reference in the Registration
Statement and the Prospectus from which certain of such data were derived
are not in conformity with generally accepted accounting principles;](13)
(iv) we have compared the information included or incorporated by
reference in the Registration Statement and the Prospectus under selected
captions with the
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(10) If the latest available unaudited financial statements are more recent than
the unaudited financial statements included or incorporated by reference in
the Registration Statement and the Prospectus, include and insert the
period from the end of the period of the unaudited financial statements
included or incorporated by reference in the Registration Statement and the
Prospectus to the date of the latest available financial statements of the
Company. Even if this first period is applicable, the second period should
run from the date of the most recent financial statements included or
incorporated by reference in the Registration Statement and the Prospectus,
not from the latest available financial statements of the Company.
(11) The blanks should be filled in with significant income statement items,
selected by the banker and tailored to the issuer's industry in general and
operations in particular. While the ultimate decision of which items should
be included rests with the banker, comfort is routinely requested for
certain income statement items, including net sales, total and per share
amounts of income before extraordinary items and of net income.
(12) Include only if there are selected financial data that have been derived
from financial statements not included or incorporated by reference in the
Registration Statement and the Prospectus.
(13) In unusual circumstances, the accountants may report on "Selected Financial
Data" as described in SAS No. 42, Reporting on Condensed Financial
Statements and Selected Financial Data, and include in their report in the
Registration Statement and the Prospectus the paragraph contemplated by SAS
No. 42.9. This situation may arise only if the Selected Financial Data do
not include interim period data and the five-year selected data are derived
entirely from financial statements audited by the auditors whose report is
included in the Registration Statement and the Prospectus. If the
guidelines set forth in SAS No. 42 are followed and the accountant's report
as included in the Registration Statement and the Prospectus includes the
additional language prescribed by SAS No. 42.9, the bracketed language may
be eliminated.
Annex I-3
disclosure requirements of Regulation S-K of the 1933 Act and on the basis
of limited procedures specified herein, nothing came to our attention that
caused us to believe that such information does not comply as to form in
all material respects with the disclosure requirements of Items 302, 402
and 503(d), respectively, of Regulation S-K;
[(v) based upon the procedures set forth in clause (ii) above, a
reading of the latest available unaudited financial statements of the
Company that have not been included or incorporated by reference in the
Registration Statement and the Prospectus and a review of such financial
statements in accordance with SAS 71, nothing came to our attention that
caused us to believe that the unaudited amounts for ________ for the [most
recent period] do not agree with the amounts set forth in the unaudited
consolidated financial statements for those periods or that such unaudited
amounts were not determined on a basis substantially consistent with that
of the corresponding amounts in the audited consolidated financial
statements;](14)
[(vi) we are unable to and do not express any opinion on the [Pro
Forma Combined Balance Sheet and Statement of Operations] (collectively,
the "Pro Forma Statements") included or incorporated by reference in the
Registration Statement and the Prospectus or on the pro forma adjustments
applied to the historical amounts included in the Pro Forma Statements;
however, for purposes of this letter we have:
(A) read the Pro Forma Statements;
(B) performed [an audit] [a review in accordance with SAS 71] of
the financial statements to which the pro forma adjustments were
applied;
(C) made inquiries of certain officials of the Company who have
responsibility for financial and accounting matters about the basis
for their determination of the pro forma adjustments and whether the
Pro Forma Statements comply as to form in all material respects with
the applicable accounting requirements of Rule 11-02 of Regulation
S-X; and
(D) proved the arithmetic accuracy of the application of the pro
forma adjustments to the historical amounts in the Pro Forma
Statements; and
on the basis of such procedures and such other inquiries and procedures as
specified herein, nothing came to our attention that caused us to believe
that the Pro Forma Statements included or incorporated by reference in the
Registration Statement and the Prospectus do not comply as to form in all
material respects with the applicable requirements of Rule 11-02 of
Regulation S-X or that the pro forma adjustments have not been properly
applied to the historical amounts in the compilation of those
statements;](15)
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(14) This language should be included when the Registration Statement and the
Prospectus include earnings or other data for a period after the date of
the most recent financial statements included or incorporated by reference
in the Registration Statement and the Prospectus. The blank should be
filled in with a description of the financial statement item(s) included.
(15) If an audit or a review in accordance with SAS 71 has not been performed by
the accountants with respect
(continued...)
Annex I-4
(vii) in addition to the procedures referred to in clause (ii) above,
we have performed other procedures, not constituting an audit, with respect
to certain amounts, percentages, numerical data and financial information
included or incorporated by reference in the Registration Statement and the
Prospectus, which are specified herein, and have compared certain of such
items with, and have found such items to be in agreement with, the
accounting and financial records of the Company;(16) and
[(viii) in addition, we [add comfort on a financial forecast that is
included or incorporated by reference in the Registration Statement and the
Prospectus](17).
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...(continued)
to the underlying historical financial statements, or if negative assurance
on the Company's pro forma financial statements is not otherwise available,
the accountants should be requested to perform certain other procedures
with respect to such pro forma financial statements. See Example O of SAS
No. 72.
(16) This language is intended to encompass all other financial/numerical
information included or incorporated by reference in the Registration
Statement and the Prospectus for which comfort may be given, including (but
not limited to) narrative and other summary financial data appearing in
tabular form (e.g. the capitalization table).
(17) Accountants' services with respect to a financial forecast may take one of
three forms: an examination of the forecast, a compilation of the forecast
or the application of agreed-upon procedures to the forecast. If the
accountant is to perform an examination of the forecast included or
incorporated by reference in the Registration Statement and the Prospectus,
text should state that, in their opinion, the forecasted financial
statements for the [relevant period or periods] included or incorporated by
reference in the Registration Statement and the Prospectus are presented in
conformity with guidelines for presentation of a forecast established by
the AICPA, and that the underlying assumptions provide a reasonable basis
for management's forecast. If the accountant is to perform a compilation of
the forecasted financial statements included or incorporated by reference
in the Registration Statement and the Prospectus, text should state that
they have compiled the forecasted financial statements for the [relevant
period or periods] included or incorporated by reference in the
Registration Statement and the Prospectus in accordance with the guidelines
established by the AICPA. Finally, if the accountant is to perform
agreed-upon procedures on a forecast included or incorporated by reference
in the Registration Statement and the Prospectus, SAS No. 72 requires that
the accountant first prepare a compilation report with respect to the
forecast and attach such report to the comfort letter, after which the
accountant may report on specific procedures performed and findings
obtained.
Annex I-5