EXHIBIT 1.3
Travelers Property Casualty Corp.
$850,000,000
4.5% Convertible Junior Subordinated Notes due 2032(a)
Convertible Notes Underwriting Agreement
New York, New York
March 21, 2002
Xxxxxxx Xxxxx Xxxxxx Inc.
Credit Suisse First Boston Corporation
Xxxxxxx, Sachs & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Xxxxxx X. Xxxxxxx & Company, Inc.
Xxxxxxxx Capital Partners, L.P.
As Representatives of the several Convertible Notes Underwriters
c/o Xxxxxxx Xxxxx Barney Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Travelers Property Casualty Corp., a corporation organized under the laws
of Connecticut (the "Company"), proposes to sell to the several underwriters
named in Schedule I hereto (the "Convertible Notes Underwriters"), for whom you
(the "Representatives") are acting as representatives, $850,000,000 principal
amount of its 4.5% Convertible Junior Subordinated Notes due 2032 (the
"Underwritten Securities"). The Company also proposes to grant to the
Convertible Notes Underwriters an option to purchase up to $42,500,000
additional principal amount of such Convertible Junior Subordinated Notes to
cover over-allotments (the "Option Securities"; the Option Securities, together
with the Underwritten Securities, being hereinafter called the "Securities").
The Securities are convertible into shares of Class A Common Stock, par value
$0.01 per share (the "Common Stock"), of the Company at the conversion price set
forth in the Prospectus. The Securities are to be issued under an indenture, to
be dated as of the Closing Date, between the Company and The Bank of New York,
as trustee (the "Trustee"), as supplemented by a First Supplemental Indenture to
be dated as of the Closing Date (the "Indenture"). To the extent there are no
additional Convertible Notes Underwriters listed on Schedule I other than you,
the term Representatives as used herein shall mean you, as Convertible Notes
Underwriters, and the terms Representatives and Convertible Notes Underwriters
shall mean either the singular or plural as the context requires. Certain terms
used herein are defined in Section 17 hereof.
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(a) Plus an option to purchase up to $42,500,000 additional principal
amount from the Company to cover over-allotments.
1. Representations and Warranties. (a) The Company represents and
warrants to, and agrees with, each Convertible Notes Underwriter as set forth
below in this Section 1(a).
(i) The Company has prepared and filed with the Commission a
registration statement (file number 333-82388) on Form S-1, including a
related preliminary prospectus, for registration under the Act of the
offering and sale of the Securities. The Company may have filed one or
more amendments thereto, including a related preliminary prospectus, each
of which has previously been furnished to you. The Company will next file
with the Commission either (1) prior to the Effective Date of such
registration statement, a further amendment to such registration statement
(including the form of final prospectus) or (2) after the Effective Date
of such registration statement, a final prospectus in accordance with
Rules 430A and 424(b). In the case of clause (2), the Company has included
in such registration statement, as amended at the Effective Date, all
information (other than Rule 430A Information) required by the Act and the
rules thereunder to be included in such registration statement and the
Prospectus. As filed, such amendment and form of final prospectus, or such
final prospectus, shall contain all Rule 430A Information, together with
all other such required information, and, except to the extent the
Representatives shall agree in writing to a modification, shall be in all
substantive respects in the form furnished to you prior to the Execution
Time or, to the extent not completed at the Execution Time, shall contain
only such specific additional information and other changes (beyond that
contained in the latest Preliminary Prospectus) as the Company has advised
you, prior to the Execution Time, will be included or made therein.
(ii) On the Effective Date, the Registration Statement did or will,
and when the Prospectus is first filed (if required) in accordance with
Rule 424(b) and on the Closing Date (as defined herein) and on any date on
which Option Securities are purchased, if such date is not the Closing
Date (a "settlement date"), the Prospectus (and any supplements thereto)
will, comply in all material respects with the applicable requirements of
the Act and the Trust Indenture Act and the respective rules thereunder.
On the Effective Date and at the Execution Time, the Registration
Statement did not or will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading; on the
Effective Date and on the Closing Date, the Indenture did and will comply
in all material respects with the applicable requirements of the Trust
Indenture Act and the rules thereunder, and, on the Effective Date, the
Prospectus, if not filed pursuant to Rule 424(b), will not, and on the
date of any filing pursuant to Rule 424(b) and on the Closing Date and any
settlement date, the Prospectus (together with any supplement thereto)
will not, include any untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that the Company makes no representations or warranties
as to (i) that part of the Registration Statement which shall constitute
the Statement of Eligibility and Qualification (Form T-1) under the Trust
Indenture Act of the
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Trustee or (ii) the information contained in or omitted from the
Registration Statement or the Prospectus (or any supplement thereto) in
reliance upon and in conformity with information furnished in writing to
the Company by or on behalf of any Convertible Notes Underwriter through
the Representatives specifically for inclusion in the Registration
Statement or the Prospectus (or any supplement thereto).
(iii) Each of the Company and its subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction in which it is chartered or organized
with full corporate power and authority to own or lease, as the case may
be, and to operate its properties and conduct its business as described in
the Prospectus, and is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each jurisdiction
which requires such qualification, except where the failure to be so
qualified in any jurisdiction or to have such powers or authorities would
not have a material adverse effect on the condition (financial or
otherwise), earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from transactions
in the ordinary course of business (a "Material Adverse Effect").
(iv) All the outstanding shares of capital stock of each subsidiary
of the Company have been duly and validly authorized and issued and are
fully paid and nonassessable, and, except as otherwise set forth in the
Prospectus, all outstanding shares of capital stock of such subsidiaries
are owned by the Company either directly or through wholly owned
subsidiaries free and clear of any perfected security interest or any
other security interests, claims, liens or encumbrances, except where the
failure to be so authorized and issued, fully paid and nonassessable,
owned by the Company or free and clear of any such interests, claims,
liens or encumbrances would not have a Material Adverse Effect.
(v) Without limitation of the foregoing, each of the subsidiaries
listed on Annex A attached hereto (the "Insurance Subsidiaries") is duly
organized and licensed as an insurance company in the jurisdiction of
incorporation identified in Annex A hereto and is duly licensed or
authorized as an insurer or reinsurer in each other jurisdiction where it
is required to be so licensed or authorized to conduct its business as
described in the Prospectus, except where the failure (individually or in
the aggregate) to be so licensed or authorized in any such jurisdiction
would not have a Material Adverse Effect; each of the Company and each
Insurance Subsidiary has made all required filings under applicable
insurance company statutes and has filed all notices, reports, documents
or other information required to be filed thereunder, except where the
failure to have such authorizations, approvals, orders, consents,
licenses, certificates, permits, registrations or qualifications
(individually or in the aggregate) would not have a Material Adverse
Effect, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto); and none of the Company or any
Insurance Subsidiary has received any notification from any insurance
regulatory authority to the effect that any additional authorization,
approval, order, consent, license,
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certificate, permit, registration or qualification from any insurance
regulatory authority is needed to be obtained by any of the Company or any
subsidiary other than in any case where the failure to acquire such
additional authorization, approval, order, consent, license, certificate,
permit, registration or qualification (individually or in the aggregate)
would not have a Material Adverse Effect.
(vi) The Company's authorized equity capitalization is as set forth
in the Prospectus; the capital stock of the Company conforms in all
material respects to the description thereof contained in the Prospectus;
the outstanding shares of Common Stock have been duly and validly
authorized and issued and are fully paid and nonassessable; the shares of
Common Stock initially issuable upon conversion of the Securities have
been duly authorized and, when issued upon conversion of the Securities
will be validly issued, fully paid and nonassessable; the Securities are
duly listed, and admitted and authorized for trading, subject to official
notice of issuance and evidence of satisfactory distribution, on the New
York Stock Exchange; the Board of Directors of the Company has duly and
validly adopted resolutions reserving such shares of Common Stock for
issuance upon conversion of the Securities; the holders of outstanding
shares of capital stock of the Company are not entitled to preemptive or
other rights to subscribe for the Securities or the shares of Common Stock
issuable upon conversion thereof, except as set forth in the Exchange
Agreement, dated as of March 21, 2002, between Citigroup Inc.
("Citigroup") and the Company; and, except as set forth in the Prospectus,
no options, warrants or other rights to purchase, agreements or other
obligations to issue, or rights to convert any obligations into or
exchange any securities for, shares of capital stock of or ownership
interests in the Company are outstanding.
(vii) There is no franchise, contract or other document of a
character required to be described in the Registration Statement or the
Prospectus, or to be filed as an exhibit thereto, which is not described
or filed as required; and the statements in the Prospectus under the
headings "Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Environmental Claims," "Management's Discussion
and Analysis of Financial Condition and Results of Operations -- Asbestos
Claims and Litigation," "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Cumulative Injury Other Than
Asbestos (XXXXX) Claims," "Business -- Environmental, Asbestos and Other
Cumulative Injury Claims," "Business -- Regulation," "Business -- Legal
Proceedings" and "Description of the Notes" fairly summarize the matters
therein described.
(viii) This Agreement has been duly authorized, executed and
delivered by the Company.
(ix) The Indenture has been duly authorized and, assuming due
authorization, execution and delivery thereof by the Trustee, when
executed and delivered by the Company, will constitute a legal, valid,
binding instrument enforceable against the Company in accordance with its
terms, except to the
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extent that enforcement thereof may be limited by (A) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and (B)
general principles of equity (regardless of whether enforceability is
considered in a proceeding at law or in equity); and the Securities have
been duly authorized, and, when executed and authenticated in accordance
with the provisions of the Indenture and delivered to and paid for by the
Convertible Notes Underwriters, will have been duly executed and delivered
by the Company and will constitute the legal, valid and binding
obligations of the Company entitled to the benefits of the Indenture,
except to the extent that enforcement thereof may be limited by (Y)
bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights generally and (Z)
general principles of equity (regardless of whether enforceability is
considered in a proceeding at law or in equity), and will be convertible
into Common Stock in accordance with their terms.
(x) Each of the agreements listed on Annex B attached hereto has
been duly authorized and, when executed and delivered by the Company or
its applicable subsidiary, will constitute a valid and binding obligation
of the Company or such subsidiary enforceable in accordance with its
terms, except to the extent that enforcement thereof may be limited by (A)
bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights generally and (B)
general principles of equity (regardless of whether enforceability is
considered in a proceeding at law or in equity).
(xi) The Company is not and, after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as
described in the Prospectus, will not be an "investment company" as
defined in the Investment Company Act of 1940, as amended.
(xii) No consent, approval, authorization, filing with or order of
any court or governmental agency or body is required in connection with
the transactions contemplated herein or in the Indenture, except such as
have been obtained under the Act and the Trust Indenture Act and such as
may be required under the blue sky laws or securities laws of any state or
foreign jurisdiction in connection with the purchase and distribution of
the Securities by the Convertible Notes Underwriters in the manner
contemplated herein and in the Prospectus, or except where the failure to
obtain such consent, approval, authorization, filing or order would not
have a material adverse effect on the issuance and sale of the Securities
or the consummation of any of the other transactions herein contemplated.
(xiii) None of the execution and delivery of the Indenture or this
Agreement, the issue and sale of the Securities, the issuance of the
Common Stock upon conversion thereof, the consummation of any other of the
transactions herein or therein contemplated, the fulfillment of the terms
hereof or thereof will conflict with, or result in a breach or violation
or imposition of any lien, charge or
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encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, (1) the charter or by-laws of the Company or any
of its subsidiaries, (2) the terms of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument to which the
Company or any of its subsidiaries is a party or bound or to which its or
their property is subject, or (3) any statute, law, rule, regulation,
judgment, order or decree applicable to the Company or any of its
subsidiaries (including the requirements of the insurance laws and
regulations of its state of incorporation and the insurance laws and
regulations of other applicable jurisdictions) of any court, regulatory
body, administrative agency, governmental body, arbitrator or other
authority having jurisdiction over the Company or any of its subsidiaries
or any of its or their properties, except, in the case of clauses (2) and
(3) above, for such conflict, breach or violation that would not have a
material adverse effect on the issuance and sale of the Securities or the
consummation of any other of the transactions herein contemplated.
(xiv) No holders of securities of the Company have rights to the
registration of such securities under the Registration Statement.
(xv) The consolidated historical financial statements and schedules
of the Company and its consolidated subsidiaries included in the
Prospectus and the Registration Statement present fairly in all material
respects the financial condition, results of operations and cash flows of
the Company as of the dates and for the periods indicated, comply as to
form with the applicable accounting requirements of the Act and have been
prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods involved (except as
otherwise noted therein). The selected financial data set forth under the
caption "Selected Historical Financial Information" in the Prospectus and
Registration Statement fairly present, on the basis stated in the
Prospectus and the Registration Statement, the information included
therein.
(xvi) The statutory financial statements of the Insurance
Subsidiaries, from which certain ratios and other statistical data
included in the Registration Statement and the Prospectus (and any
amendment or supplement thereto) have been derived, have been prepared for
each relevant period in conformity with accounting practices prescribed or
permitted by the National Association of Insurance Commissioners and the
insurance departments of the states of domicile of such subsidiaries, in
effect at such time of preparation, except as otherwise stated therein.
(xvii) There are no legal or governmental proceedings (including,
without limitation, actions or proceedings by any insurance regulatory
agency or body) pending or, to the knowledge of the Company, threatened
against the Company or any of its subsidiaries, or to which the Company or
any of its subsidiaries is a party, or to which any of their respective
properties is subject, that (1) could reasonably be expected to have a
material adverse effect on the performance of this Agreement or the
Indenture or the consummation of any of the transactions
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contemplated hereby or thereby or (2) are required to be described in the
Registration Statement or the Prospectus (exclusive of any supplement
thereto) but are not described as required.
(xviii) Except as disclosed in the Prospectus, (1) all reinsurance
treaties, contracts, agreements and arrangements to which the Company or
any of the Insurance Subsidiaries is a party and as to which any of them
reported recoverables, premiums due or other amounts in its most recent
statutory financial statements are in full force and effect, except where
the failure of such treaties, contracts, agreements and arrangements to be
in full force and effect would not have a Material Adverse Effect, and
none of the Company or any of the Insurance Subsidiaries is in violation
of, or in default in the performance, observance or fulfillment of, any
material obligation, agreement, covenant or condition contained therein,
which violation or default would, singly or in the aggregate, have a
Material Adverse Effect and (2) neither the Company nor any of the
Insurance Subsidiaries has received any notice from any other party to any
reinsurance treaty, contract, agreement or arrangement that such other
party intends not to perform such treaty, contract, agreement or
arrangement in any material respect, and the Company and the Insurance
Subsidiaries have no knowledge that any of the other parties to such
treaties, contracts, agreements or arrangements will be unable to perform
its obligations under such treaty, contract, agreement or arrangement in
any material respect, except to the extent (A) the Company or the
Insurance Subsidiaries have established reserves in their financial
statements which they deem adequate for potential uncollectible
reinsurance or (B) such nonperformance would not have a Material Adverse
Effect.
(xix) To the best knowledge of the Company, no change in any
insurance laws or regulations is pending which could reasonably be
expected to be adopted and if adopted, would have, individually or in the
aggregate with all such changes, a Material Adverse Effect, except as set
forth in or contemplated in the Prospectus (exclusive of any supplement
thereto).
(xx) Neither the Company nor any subsidiary is in violation or
default of (1) any provision of its charter or by-laws, (2) the terms of
any indenture, contract, lease, mortgage, deed of trust, note agreement,
loan agreement or other agreement, obligation, condition, covenant or
instrument to which it is a party or bound or to which its property is
subject, or (3) any statute, law, rule, regulation, judgment, order or
decree of any court, regulatory body, administrative agency, governmental
body, arbitrator or other authority having jurisdiction over the Company
or such subsidiary (including the requirements of the insurance laws and
regulations of its state of incorporation and the insurance laws and
regulations of other applicable jurisdictions) or any of its properties,
as applicable, except, in the case of each of clauses (2) or (3) above,
for such violation or default that would not have a Material Adverse
Effect.
(xxi) KPMG LLP, who have certified certain financial statements of
the Company and its consolidated subsidiaries and delivered their report
with respect
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to the audited consolidated financial statements and schedules included in
the Prospectus, are independent public accountants with respect to the
Company within the meaning of the Act and the applicable published rules
and regulations thereunder.
(xxii) There are no transfer taxes or other similar fees or charges
under federal law or the laws of any state, or any political subdivision
thereof, required to be paid in connection with the execution and delivery
of this Agreement or the issuance by the Company or sale by the Company of
the Securities or upon the issuance of Common Stock upon the conversion
thereof.
(xxiii) The Company has filed all foreign, federal, state and local
tax returns that are required to be filed or has requested extensions
thereof (except in any case in which the failure so to file would not have
a Material Adverse Effect), except as set forth in or contemplated in the
Prospectus (exclusive of any supplement thereto), and has paid all taxes
required to be paid by it and any other assessment, fine or penalty levied
against it, to the extent that any of the foregoing is due and payable
(except for any such tax, assessment, fine or penalty that is currently
being contested in good faith or as would not have a Material Adverse
Effect), except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto).
(xxiv) No labor problem or dispute with the employees of the Company
or any of its subsidiaries exists or is threatened or imminent, and the
Company is not aware of any existing or imminent labor disturbance by the
employees of any of its or its subsidiaries' principal suppliers,
contractors or customers, that could have a Material Adverse Effect,
except as set forth in or contemplated in the Prospectus (exclusive of any
supplement thereto).
(xxv) The Company and its subsidiaries possess all licenses,
certificates, permits and other authorizations issued by the appropriate
federal, state or foreign regulatory authorities (including insurance
departments) necessary to conduct their respective businesses, and no
event or events have occurred which would result in the impairment,
modification, termination or revocation of any such license, certificate,
authorization or permit which, singly or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would have a Material
Adverse Effect, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto).
(xxvi) The Company and each of its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance
that (1) transactions are executed in accordance with management's general
or specific authorizations; (2) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability; (3)
access to assets is permitted only in accordance with management's general
or specific authorization; and (4) the recorded accountability for assets
is compared with the existing assets at
8
reasonable intervals and appropriate action is taken with respect to any
differences.
(xxvii) The Company has not taken, directly or indirectly, any
action that has constituted or that was designed to or might reasonably be
expected to cause or result in, under the Exchange Act or otherwise, the
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Securities.
(xxviii) Each of the Company and its subsidiaries has fulfilled its
obligations, if any, under the minimum funding standards of Xxxxxxx 000 xx
xxx Xxxxxx Xxxxxx Employee Retirement Income Security Act of 1974
("ERISA") and the regulations and published interpretations thereunder
with respect to each "plan" (as defined in Section 3(3) of ERISA and such
regulations and published interpretations) in which employees of the
Company and its subsidiaries are eligible to participate, except where the
failure to fulfill such obligations would not have a Material Adverse
Effect, and each such plan is in compliance in all material respects with
the presently applicable provisions of ERISA and such regulations and
published interpretations. The Company and its subsidiaries have not
incurred any unpaid liability to the Pension Benefit Guaranty Corporation
(other than for the payment of premiums in the ordinary course) or to any
such plan under Title IV of ERISA, except where the failure to fulfill
such obligations or any such noncompliance would not have a Material
Adverse Effect.
(xxix) The Company and its subsidiaries own, possess, license or
have other rights to use, on reasonable terms, all patents, patent
applications, trade and service marks, trade and service xxxx
registrations, trade names, copyrights, licenses, inventions, trade
secrets, technology, know-how and other intellectual property
(collectively, the "Intellectual Property") necessary for the conduct of
the Company's business as now conducted, except where the failure to so
own, possess, license or have other rights to use such Intellectual
Property would not have a Material Adverse Effect, or as proposed in the
Prospectus to be conducted, and the Company is not aware of any material
claim to the contrary or any material challenge by any other person to the
rights of the Company or its subsidiaries with respect to the foregoing,
except as set forth or contemplated in the Prospectus (exclusive of any
supplement thereto).
(xxx) Neither any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the Act) nor
A.M. Best Co. has (A) taken any action to, or to the Company's knowledge,
threatened to decrease the rating of any debt securities of the Company or
any of its U.S. subsidiaries or the financial strength or the claims
paying ability of the Company, any of its U.S. subsidiaries or any
intracompany insurance pool to which any Insurance Subsidiary of the
Company belongs or (B) given any notice of any intended or potential
decrease in any such rating or of a possible change in any such rating
that does not indicate the direction of the possible change.
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Any certificate signed by any officer of the Company and delivered
to the Representatives or counsel for the Convertible Notes Underwriters in
connection with the offering of the Securities shall be deemed a representation
and warranty by the Company, as to matters covered thereby, to each Convertible
Notes Underwriter.
(b) Citigroup represents and warrants to, and agrees with, each
Convertible Notes Underwriter as set forth below in this Section 1(b).
(i) This Agreement has been duly authorized, executed and delivered
by Citigroup.
(ii) Each of the agreements listed on Annex B attached hereto has
been duly authorized and, when executed and delivered by Citigroup or its
applicable subsidiary, will constitute a valid and binding obligation of
Citigroup or such subsidiary enforceable in accordance with its terms,
except to the extent that enforcement thereof may be limited by (A)
bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights generally and (B)
general principles of equity (regardless of whether enforceability is
considered in a proceeding at law or in equity).
(iii) Citigroup has not taken, directly or indirectly, any action
that has constituted or that was designed to or might reasonably be
expected to cause or result in, under the Exchange Act or otherwise, the
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Securities.
(iv) None of the execution and delivery of the Indenture or this
Agreement, the issue and sale of the Securities, the issuance of the
Common Stock upon conversion thereof, the consummation of any other of the
transactions herein contemplated, the fulfillment of the terms hereof or
thereof will conflict with, or result in a breach or violation or
imposition of any lien, charge or encumbrance upon any property or assets
of Citigroup or any of its subsidiaries pursuant to, (1) the charter or
by-laws of Citigroup or any of its subsidiaries, (2) the terms of any
indenture, contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or
instrument to which Citigroup or any of its subsidiaries is a party or
bound or to which its or their property is subject, or (3) any statute,
law, rule, regulation, judgment, order or decree applicable to Citigroup
or any of its subsidiaries (including the requirements of the insurance
laws and regulations of its state of incorporation and the insurance laws
and regulations of other jurisdictions which are applicable to such
subsidiary) of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction over
Citigroup or any of its subsidiaries or any of its or their properties,
except in the case of clauses (2) and (3) above, for such conflict, breach
or violation that would not have a material adverse effect on the issuance
and sale of the Securities or the consummation of any of the transactions
herein contemplated.
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(v) In respect of any statements in or omissions from the
Registration Statement or the Prospectus or any supplements thereto made
in reliance upon and in conformity with information furnished in writing
to the Company by Citigroup specifically for use in connection with the
preparation thereof, Citigroup hereby makes the same representations and
warranties to each Convertible Notes Underwriter as the Company makes to
such Convertible Notes Underwriter under the second sentence of paragraph
(a)(ii) of this Section.
Any certificate signed by any officer of Citigroup and delivered to
the Representatives or counsel for the Convertible Notes Underwriters in
connection with the offering of the Securities shall be deemed a representation
and warranty by Citigroup, as to matters covered thereby, to each Convertible
Notes Underwriter.
2. Purchase and Sale. (a) Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the Company
agrees to sell to each Convertible Notes Underwriter, and each Convertible Notes
Underwriter agrees, severally and not jointly, to purchase from the Company, at
a purchase price of 97.5% of the principal amount thereof, plus accrued
interest, if any, from March 27, 2002 to the Closing Date, the principal amount
of the Underwritten Securities set forth opposite such Convertible Notes
Underwriter's name in Schedule I hereto.
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company hereby grants an
option to the several Convertible Notes Underwriters to purchase, severally and
not jointly, the Option Securities at the same purchase price as the Convertible
Notes Underwriters shall pay for the Underwritten Securities, plus accrued
interest, if any, from March 27, 2002 to the settlement date for the Option
Securities. Said option may be exercised only to cover over-allotments in the
sale of the Underwritten Securities by the Convertible Notes Underwriters. Said
option may be exercised in whole or in part at any time on or before the 30th
day after the date of the Prospectus upon written or telegraphic notice by the
Representatives to the Company setting forth the principal amount of Option
Securities as to which the several Convertible Notes Underwriters are exercising
the option and the settlement date. The principal amount of Option Securities to
be purchased by each Convertible Notes Underwriter shall be the same percentage
of the total principal amount of Option Securities to be purchased by the
several Convertible Notes Underwriters as such Convertible Notes Underwriter is
purchasing of the Underwritten Securities, subject to such adjustments as you in
your absolute discretion shall make to eliminate any fractional Securities.
3. Delivery and Payment. Delivery of and payment for the
Underwritten Securities and the Option Securities (if the option provided for in
Section 2(b) hereof shall have been exercised on or before the third Business
Day prior to the Closing Date) shall be made at 10:00 AM, New York City time, on
March 27, 2002, or at such time on such later date not more than three Business
Days after the foregoing date as the Representatives shall designate, which date
and time may be postponed by agreement between the Representatives and the
Company or as provided in Section 9 hereof (such date and time of delivery and
payment for the Securities being herein called the "Closing
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Date"). Delivery of the Securities shall be made to the Representatives for the
respective accounts of the several Convertible Notes Underwriters against
payment by the several Convertible Notes Underwriters through the
Representatives of the purchase price thereof to or upon the order of the
Company by wire transfer payable in same-day funds to an account specified by
the Company. Delivery of the Underwritten Securities and the Option Securities
shall be made through the facilities of The Depository Trust Company unless the
Representatives shall otherwise instruct.
If the option provided for in Section 2(b) hereof is exercised after
the third Business Day prior to the Closing Date, the Company will deliver the
Option Securities (at the expense of the Company) to the Representatives, at 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, xx the date specified by the
Representatives (which shall be within three Business Days after exercise of
said option) for the respective accounts of the several Convertible Notes
Underwriters, against payment by the several Convertible Notes Underwriters
through the Representatives of the purchase price thereof to or upon the order
of the Company by wire transfer payable in same-day funds to an account
specified by the Company. If settlement for the Option Securities occurs after
the Closing Date, the Company will deliver to the Representatives on the
settlement date for the Option Securities, and the obligation of the Convertible
Notes Underwriters to purchase the Option Securities shall be conditioned upon
receipt of, supplemental opinions, certificates and letters confirming as of
such date the opinions, certificates and letters delivered on the Closing Date
pursuant to Section 6 hereof.
4. Offering by Convertible Notes Underwriters. It is understood that
the several Convertible Notes Underwriters propose to offer the Securities for
sale to the public as set forth in the Prospectus.
5. Agreements. (a) The Company agrees with the several Convertible
Notes Underwriters that:
(i) The Company will use its best efforts to cause the Registration
Statement, if not effective at the Execution Time, and any amendment
thereof, to become effective. Prior to the termination of the offering of
the Securities, the Company will not file any amendment of the
Registration Statement or supplement to the Prospectus or any Rule 462(b)
Registration Statement unless the Company has furnished you a copy for
your review prior to filing and will not file any such proposed amendment
or supplement to which you reasonably object. Subject to the foregoing
sentence, if the Registration Statement has become or becomes effective
pursuant to Rule 430A, or filing of the Prospectus is otherwise required
under Rule 424(b), the Company will cause the Prospectus, properly
completed, and any supplement thereto to be filed with the Commission
pursuant to the applicable paragraph of Rule 424(b) within the time period
prescribed and will provide evidence satisfactory to the Representatives
of such timely filing. The Company will promptly advise the
Representatives (A) when the Registration Statement, if not effective at
the Execution Time, shall have become effective, (B) when the Prospectus,
and any supplement thereto, shall have been filed (if required) with the
Commission pursuant to Rule 424(b) or when any Rule 462(b)
12
Registration Statement shall have been filed with the Commission, (C)
when, prior to termination of the offering of the Securities, any
amendment to the Registration Statement shall have been filed or become
effective, (D) of any request by the Commission or its staff for any
amendment of the Registration Statement, or any Rule 462(b) Registration
Statement, or for any supplement to the Prospectus or for any additional
information, (E) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose and (F) of
the receipt by the Company of any notification with respect to the
suspension of the qualification of the Securities for sale in any
jurisdiction or the institution or threatening of any proceeding for such
purpose. The Company will use its best efforts to prevent the issuance of
any such stop order or the suspension of any such qualification and, if
issued, to obtain as soon as possible the withdrawal thereof.
(ii) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of
which the Prospectus as then supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein in the light of the circumstances under
which they were made not misleading, or if it shall be necessary to amend
the Registration Statement or supplement the Prospectus to comply with the
Act or the rules thereunder, the Company promptly will (A) notify the
Representatives of any such event, (B) prepare and file with the
Commission, subject to the second sentence of subparagraph (a)(i) of this
Section 5, an amendment or supplement which will correct such statement or
omission or effect such compliance and (C) supply any supplemented
Prospectus to you in such quantities as you may reasonably request.
(iii) As soon as practicable, the Company will make generally
available to its security holders and to the Representatives an earnings
statement or statements of the Company and its subsidiaries which will
satisfy the provisions of Section 11(a) of the Act and Rule 158 under the
Act.
(iv) The Company will furnish to the Representatives and counsel for
the Convertible Notes Underwriters signed copies of the Registration
Statement (including exhibits thereto) and to each other Convertible Notes
Underwriter a copy of the Registration Statement (without exhibits
thereto) and, so long as delivery of a prospectus by a Convertible Notes
Underwriter or dealer may be required by the Act, as many copies of each
Preliminary Prospectus and the Prospectus and any supplement thereto as
the Representatives may reasonably request.
(v) The Company will arrange, if necessary, for the qualification of
the Securities for sale under the laws of such jurisdictions as the
Representatives may designate and will maintain such qualifications in
effect so long as required for the distribution of the Securities;
provided that in no event shall the Company be obligated to qualify to do
business in any jurisdiction where it is not now so
13
qualified or to take any action that would subject it to service of
process in suits, other than those arising out of the offering or sale of
the Securities, or taxation in any jurisdiction where it is not now so
subject.
(vi) The Company will reserve and keep available at all times, free
of preemptive rights, the full number of shares of Common Stock issuable
upon conversion of the Securities.
(vii) The Company will not, without the prior written consent of
Xxxxxxx Xxxxx Xxxxxx Inc., offer, sell, contract to sell, pledge, or
otherwise dispose of (or enter into any transaction which is designed to,
or might reasonably be expected to, result in the disposition of (whether
by actual disposition or effective economic disposition due to cash
settlement or otherwise) by the Company or any affiliate of the Company or
any person in privity with the Company or any affiliate of the Company),
directly or indirectly, including the filing (or participation in the
filing) of a registration statement with the Commission in respect of, or
establish or increase a put equivalent position or liquidate or decrease a
call equivalent position within the meaning of Section 16 of the Exchange
Act with respect to, any other shares of Common Stock or shares of the
Company's Class B Common Stock ("Class B Common Stock") or any securities
convertible into, or exercisable or exchangeable for, shares of Common
Stock or shares of Class B Common Stock (including the Securities); or
publicly announce an intention to effect any such transaction, for a
period of 180 days after the date of the Convertible Notes Underwriting
Agreement, provided, however, that (A) the Company may issue and sell
Common Stock in the concurrent offering of the Common Stock contemplated
by the Prospectus, (B) the Company may issue shares of Common Stock upon
conversion of the Securities, (C) the Company may grant options to
purchase shares of Common Stock or Class B Common Stock, (D) the Company
may issue shares of Common Stock or Class B Common Stock upon the
conversion of securities or the exercise of warrants outstanding at the
Execution Time or upon the exercise of options under its stock option
plans, (E) the Company may issue restricted shares of Common Stock or
Class B Common Stock pursuant to the Company's 2002 stock incentive plan,
(F) the Company may issue or sell shares of Common Stock or Class B Common
Stock in connection with an acquisition or business combination and (G)
the Company may issue shares of Common Stock or Class B Common Stock in
connection with the transactions contemplated under the heading "Summary
-- Our Corporate Reorganization" in the Prospectus.
(viii) The Company will not take, directly or indirectly, any action
designed to or which has constituted or which might reasonably be expected
to cause or result, under the Exchange Act or otherwise, in stabilization
or manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities.
14
(ix) Between the date hereof and the Closing Date, the Company will
not do or authorize any act or thing that would result in an adjustment of
the conversion price of the Securities.
(x) The Company agrees to pay the costs and expenses relating to the
following matters: (A) the preparation of the Indenture and other document
relating to the issuance of the Securities and the issuance of the Common
Stock upon conversion of the Securities; (B) the fees and expenses of the
Trustee; (C) the preparation, printing or reproduction and filing with the
Commission of the Registration Statement (including financial statements
and exhibits thereto), each Preliminary Prospectus, the Prospectus, and
each amendment or supplement to any of them; (D) the printing (or
reproduction) and delivery (including postage, air freight charges and
charges for counting and packaging) of such copies of the Registration
Statement, each Preliminary Prospectus, the Prospectus, and all amendments
or supplements to any of them, as may, in each case, be reasonably
requested for use in connection with the offering and sale of the
Securities; (E) the preparation, printing, authentication, issuance and
delivery of certificates for the Securities, including any stamp or
transfer taxes in connection with the original issuance and sale of the
Securities; (F) the printing (or reproduction) and delivery of this
Agreement, any blue sky memorandum and all other agreements or documents
printed (or reproduced) and delivered in connection with the offering of
the Securities; (G) the registration of the Securities under the Exchange
Act and the listing of the Securities on the New York Stock Exchange; (H)
any registration or qualification of the Securities for offer and sale
under the securities or blue sky laws of the several states (including
filing fees and the reasonable fees and expenses of counsel for the
Convertible Notes Underwriters relating to such registration and
qualification); (I) any filings required to be made with the National
Association of Securities Dealers, Inc. (including filing fees and the
reasonable fees and expenses of counsel for the Convertible Notes
Underwriters relating to such filings); (J) the transportation and other
expenses incurred by or on behalf of Company representatives in connection
with presentations to prospective purchasers of the Securities; (K) the
fees and expenses of the Company's accountants and the fees and expenses
of counsel (including local and special counsel) for the Company; and (L)
all other costs and expenses incident to the performance by the Company of
its obligations hereunder.
(b) Citigroup agrees with the several Convertible Notes Underwriters
that:
(i) Citigroup will not, without the prior written consent of Xxxxxxx
Xxxxx Xxxxxx Inc., offer, sell, contract to sell, pledge, or otherwise
dispose of (or enter into any transaction which is designed to, or might
reasonably be expected to, result in the disposition of (whether by actual
disposition or effective economic disposition due to cash settlement or
otherwise) by the Company or any affiliate of the Company or any person in
privity with the Company or any affiliate of the Company), directly or
indirectly, including the filing (or participation in the filing) of a
registration statement with the Commission in respect of, or establish or
increase a put equivalent position or liquidate or decrease a call
equivalent
15
position within the meaning of Section 16 of the Exchange Act with respect
to, any other shares of Common Stock or shares of Class B Common Stock or
any securities convertible into, or exercisable or exchangeable for,
shares of Common Stock or shares of Class B Common Stock (including the
Securities); or publicly announce an intention to effect any such
transaction, for a period of 180 days after the date of the Convertible
Notes Underwriting Agreement, provided, however, that (A) the Company may
issue and sell Common Stock in the concurrent offering of Common Stock
contemplated by the Prospectus, (B) the Company may issue shares of Common
Stock upon conversion of the Securities, (C) the Company may grant options
to purchase shares of Common Stock or Class B Common Stock, (D) the
Company may issue shares of Common Stock or Class B Common Stock upon the
conversion of securities or the exercise of warrants outstanding at the
Execution Time or upon the exercise of options under its stock option
plans, (E) the Company may issue restricted shares of Common Stock or
Class B Common Stock pursuant to the Company's 2002 stock incentive plan,
(F) the Company may issue or sell shares of Common Stock or Class B Common
Stock in connection with an acquisition or business combination, (G)
Citigroup may privately transfer shares of the Company's Common Stock or
Class B Common Stock, as long as the acquirer of such shares agrees in
writing to be bound by the obligations and restrictions set forth in this
clause (i), and (H) the Company may issue shares of Common Stock or Class
B Common Stock in connection with the transactions contemplated under the
heading "Summary -- Our Corporate Reorganization" in the Prospectus.
(ii) Citigroup will not take, directly or indirectly, any action
designed to or which has constituted or which might reasonably be expected
to cause or result, under the Exchange Act or otherwise, in stabilization
or manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities.
6. Conditions to the Obligations of the Convertible Notes
Underwriters. The obligations of the Convertible Notes Underwriters to purchase
the Underwritten Securities and the Option Securities, as the case may be, shall
be subject to the accuracy of the representations and warranties on the part of
the Company and Citigroup contained herein as of the Execution Time, the Closing
Date and any settlement date pursuant to Section 3 hereof, to the accuracy of
the statements of the Company and Citigroup made in any certificates pursuant to
the provisions hereof, to the performance by each of the Company and Citigroup
of their respective obligations hereunder and to the following additional
conditions:
(a) If the Registration Statement has not become effective prior to
the Execution Time, unless the Representatives agree in writing to a later
time, the Registration Statement will become effective not later than (i)
6:00 PM New York City time on the date of determination of the public
offering price, if such determination occurred at or prior to 3:00 PM New
York City time on such date or (ii) 9:30 AM on the Business Day following
the day on which the public offering price was determined, if such
determination occurred after 3:00 PM New York City time on such date; if
filing of the Prospectus, or any supplement
16
thereto, is required pursuant to Rule 424(b), the Prospectus, and any such
supplement, will be filed in the manner and within the time period
required by Rule 424(b); and no stop order suspending the effectiveness of
the Registration Statement shall have been issued and no proceedings for
that purpose shall have been instituted or threatened.
(b) The Company shall have requested and caused Skadden, Arps,
Slate, Xxxxxxx & Xxxx, special counsel for the Company and Citigroup, to
have furnished to the Representatives their opinion, dated the Closing
Date and addressed to the Representatives, substantially in the form of
Exhibit A.
(c) The Company shall have requested and caused Simpson, Thacher &
Xxxxxxxx, special counsel for the Company, to have furnished to the
Representatives their opinion, dated the Closing Date and addressed to the
Representatives, substantially in the form of Exhibit B.
(d) The Company and Citigroup shall have requested and caused Xxxxx
X. Xxxxxxxx, Esq., corporate counsel for the Company and Citigroup, to
have furnished to the Representatives his opinion, dated the Closing Date
and addressed to the Representatives, substantially in the form of Exhibit
C.
(e) The Company shall have requested and caused Xxxxxxxx & Xxxxxxxx
LLC, special Connecticut counsel for the Company, to have furnished to the
Representatives their opinion, dated the Closing Date and addressed to the
Representatives, substantially in the form of Exhibit D.
(f) The Representatives shall have received from Cleary, Gottlieb,
Xxxxx & Xxxxxxxx, counsel for the Convertible Notes Underwriters, such
opinion or opinions, dated the Closing Date and addressed to the
Representatives, with respect to the issuance and sale of the Securities,
the Indenture, the Registration Statement, the Prospectus (together with
any supplement thereto) and other related matters as the Representatives
may reasonably require, and the Company shall have furnished to such
counsel such documents as they request for the purpose of enabling them to
pass upon such matters.
(g) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chairman of the Board or the
President and the principal financial or accounting officer of the
Company, dated the Closing Date, to the effect that the signers of such
certificate have carefully examined the Registration Statement, the
Prospectus, any supplements to the Prospectus and this Agreement and that:
(i) the representations and warranties of the Company in this
Agreement are true and correct on and as of the Closing Date with
the same effect as if made on the Closing Date and the Company has
complied with all the agreements and satisfied all the conditions on
its part to be performed or satisfied at or prior to the Closing
Date;
17
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the Company's knowledge,
threatened; and
(iii) since the date of the most recent financial statements
included in the Prospectus (exclusive of any supplement thereto),
there has been no material adverse change in the condition
(financial or otherwise), earnings, business or properties of the
Company and its subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business, except
as set forth in or contemplated in the Prospectus (exclusive of any
supplement thereto).
(h) The Company shall have requested and caused KPMG LLP to have
furnished to the Representatives, at the Execution Time and at the Closing
Date, letters, dated respectively as of the Execution Time and as of the
Closing Date, substantially in the form of Exhibit E hereto.
(i) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Prospectus (exclusive of any supplement
thereto), there shall not have been (i) any change or decrease specified
in the letter or letters referred to in paragraph (h) of this Section 6 or
(ii) any change, or any development involving a prospective change, in or
affecting the condition (financial or otherwise), earnings, business or
properties of the Company and its subsidiaries taken as a whole, whether
or not arising from transactions in the ordinary course of business,
except as set forth in or contemplated in the Prospectus (exclusive of any
supplement thereto), the effect of which, in any case referred to in
clause (i) or (ii) above, is, in the sole judgment of the Representatives,
so material and adverse as to make it impractical or inadvisable to
proceed with the offering or delivery of the Securities as contemplated by
the Registration Statement (exclusive of any amendment thereof) and the
Prospectus (exclusive of any supplement thereto).
(j) Subsequent to the Execution Time, there shall not have been (i)
any decrease in the rating of any debt securities of the Company or any of
its U.S. subsidiaries or the financial strength or the claims paying
ability of the Company, any of its U.S. subsidiaries or any intracompany
insurance pool to which any Insurance Subsidiary belongs by any
"nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Act) or A.M. Best Co. or (ii) any notice
given of any intended or potential decrease in any such rating or of a
possible change in any such rating that does not indicate the direction of
the possible change.
(k) Prior to the Closing Date, the Company shall have furnished to
the Representatives such further information, certificates and documents
as the Representatives may reasonably request.
18
(l) The Securities shall have been listed and admitted and
authorized for trading on the New York Stock Exchange, subject to notice
of issuance, and satisfactory evidence of such actions shall have been
provided to the Representatives, and the Company shall have caused the
shares of Common Stock initially issuable upon conversion of the
Securities to be approved for listing, subject to issuance, on the New
York Stock Exchange.
(m) At the Execution Time, the Company shall have furnished to the
Representatives a letter substantially in the form of Exhibit F hereto
from each officer and director of the Company and each Participant in the
Directed Share Program addressed to the Representatives.
(n) The Company shall have consummated the transactions contemplated
under the caption "Summary -- Our Corporate Reorganization" in the
Prospectus, and each of the Company and Citigroup, or its applicable
subsidiary, shall have executed and delivered each of the agreements
listed on Annex B attached hereto.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Representatives and counsel for the Convertible Notes
Underwriters, this Agreement and all obligations of the Convertible Notes
Underwriters hereunder may be canceled at, or at any time prior to, the Closing
Date by the Representatives. Notice of such cancellation shall be given to the
Company in writing or by telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 6 shall be
delivered at the office of Cleary, Gottlieb, Xxxxx & Xxxxxxxx, counsel for the
Convertible Notes Underwriters, at Xxx Xxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx, xx the
Closing Date.
7. Reimbursement of Convertible Notes Underwriters' Expenses. If the
sale of the Securities provided for herein is not consummated because any
condition to the obligations of the Convertible Notes Underwriters set forth in
Section 6 hereof is not satisfied, because of any termination pursuant to
Section 10 hereof or because of any refusal, inability or failure on the part of
the Company to perform any agreement herein or comply with any provision hereof
other than by reason of a default by any of the Convertible Notes Underwriters,
the Company will reimburse the Convertible Notes Underwriters severally through
Xxxxxxx Xxxxx Barney Inc. on demand for all out-of-pocket expenses (including
reasonable fees and disbursements of counsel) that shall have been incurred by
them in connection with the proposed purchase and sale of the Securities.
8. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Convertible Notes Underwriter, the directors,
officers, employees and agents of each Convertible Notes Underwriter and each
person who controls any Convertible Notes Underwriter within the meaning of
either the Act or the Exchange Act against any and all losses, claims, damages
or liabilities, joint or several, to
19
which they or any of them may become subject under the Act, the Exchange Act or
other federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the registration statement for the
registration of the Securities as originally filed or in any amendment thereof,
or in any Preliminary Prospectus or the Prospectus, or in any amendment thereof
or supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and agrees to reimburse
each such indemnified party, as incurred, for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of any Convertible Notes Underwriter through the
Representatives specifically for inclusion therein; provided further that with
respect to any untrue statement or omission of material fact made in any
Preliminary Prospectus, the indemnity agreement contained in this Section 8(a)
shall not inure to the benefit of any Convertible Notes Underwriter from whom
the person asserting any such loss, claim, damage or liability purchased the
securities concerned, to the extent that any such loss, claim, damage or
liability of such Convertible Notes Underwriter occurs under the circumstance
where it shall have been determined by a court of competent jurisdiction by
final and nonappealable judgment that (w) the Company had previously furnished
copies of the Prospectus to the Representatives, (x) delivery of the Prospectus
was required by the Act to be made to such person, (y) the untrue statement or
omission of a material fact contained in the Preliminary Prospectus was
corrected in the Prospectus and (z) there was not sent or given to such person,
at or prior to the written confirmation of the sale of such securities to such
person, a copy of the Prospectus. This indemnity agreement will be in addition
to any liability which the Company may otherwise have.
(b) Each Convertible Notes Underwriter severally and not jointly
agrees to indemnify and hold harmless the Company, each of its directors, each
of its officers who signs the Registration Statement, and each person who
controls the Company within the meaning of either the Act or the Exchange Act,
to the same extent as the foregoing indemnity from the Company to each
Convertible Notes Underwriter, but only with reference to written information
relating to such Convertible Notes Underwriter furnished to the Company by or on
behalf of such Convertible Notes Underwriter through the Representatives
specifically for inclusion in the documents referred to in the foregoing
indemnity. This indemnity agreement will be in addition to any liability which
any Convertible Notes Underwriter may otherwise have. The Company acknowledges
that the statements set forth in the last paragraph of the cover page regarding
delivery of the Securities and, under the heading "Underwriting" (i) the list of
Convertible Notes Underwriters and their respective participation in the sale of
the Securities, (ii) the third full paragraph related to concessions and
reallowances, (iii) the tenth and eleventh full paragraphs related to
stabilization, syndicate covering transactions and penalty bids in any
Preliminary Prospectus and the Prospectus, (iv) the fifteenth full paragraph
related to
20
the assumption by Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated (the
"Independent Underwriter") of all responsibilities as the "qualified independent
underwriter" (within the meaning of National Association of Securities Dealers,
Inc. Conduct Rule 2720) and (v) the seventeenth paragraph related to electronic
distribution of the Prospectus and allocation for electronic distribution of the
Securities constitute the only information furnished in writing by or on behalf
of the several Convertible Notes Underwriters for inclusion in any Preliminary
Prospectus or the Prospectus.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party shall be entitled
to appoint counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be reasonably satisfactory to the
indemnified party. Notwithstanding the indemnifying party's election to appoint
counsel to represent the indemnified party in an action, the indemnified party
shall have the right to employ separate counsel (including local counsel), and
the indemnifying party shall bear the reasonable fees, costs and expenses of
such separate counsel if (i) the use of counsel chosen by the indemnifying party
to represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after notice of the institution of such action or (iv) the indemnifying
party shall authorize the indemnified party to employ separate counsel at the
expense of the indemnifying party. An indemnifying party will not, without the
prior written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any pending or threatened
claim, action, suit or proceeding in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified parties are
actual or potential parties to such claim or action) unless such settlement,
compromise or consent includes an unconditional release of each indemnified
party from all liability arising out of such claim, action, suit or proceeding.
An indemnifying party shall not be liable under this Section 8 to any
indemnified party regarding any settlement or compromise or consent to the entry
of any judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder
21
(whether or not the indemnified parties are actual or potential parties to such
claim or action) unless such settlement, compromise or consent is consented to
by such indemnifying party, which consent shall not be unreasonably withheld.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Convertible Notes
Underwriters severally agree to contribute to the aggregate losses, claims,
damages and liabilities (including legal or other expenses reasonably incurred
in connection with investigating or defending same) (collectively "Losses") to
which the Company and one or more of the Convertible Notes Underwriters may be
subject in such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and by the Convertible Notes
Underwriters on the other from the offering of the Securities; provided,
however, that in no case shall (i) any Convertible Notes Underwriter (except as
may be provided in any agreement among underwriters relating to the offering of
the Securities) be responsible for any amount in excess of the underwriting
discount or commission applicable to the Securities purchased by such
Convertible Notes Underwriter hereunder or (ii) the Independent Underwriter in
its capacity as "qualified independent underwriter" (within the meaning of
National Association of Securities Dealers, Inc. Conduct Rule 2720) be
responsible for any amount in excess of the compensation received by the
Independent Underwriter for acting in such capacity. If the allocation provided
by the immediately preceding sentence is unavailable for any reason, the Company
and the Convertible Notes Underwriters severally shall contribute in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company on the one hand and of the Convertible Notes
Underwriters on the other in connection with the statements or omissions which
resulted in such Losses as well as any other relevant equitable considerations.
Benefits received by the Company shall be deemed to be equal to the total net
proceeds from the offering (before deducting expenses) received by the Company,
and benefits received by the Convertible Notes Underwriters shall be deemed to
be equal to the total underwriting discounts and commissions, in each case as
set forth on the cover page of the Prospectus. Benefits received by the
Independent Underwriter in its capacity as "qualified independent underwriter"
shall be deemed to be equal to the compensation received by the Independent
Underwriter for acting in such capacity. Relative fault shall be determined by
reference to, among other things, whether any untrue or any alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information provided by the Company on the one hand or
the Convertible Notes Underwriters on the other, the intent of the parties and
their relative knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The Company and the Convertible Notes
Underwriters agree that it would not be just and equitable if contribution were
determined by pro rata allocation or any other method of allocation which does
not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 8, each person who
controls a Convertible Notes Underwriter within the meaning of either the Act or
the Exchange Act and each director, officer, employee and agent of a Convertible
Notes Underwriter shall
22
have the same rights to contribution as such Convertible Notes Underwriter, and
each person who controls the Company within the meaning of either the Act or the
Exchange Act, each officer of the Company who shall have signed the Registration
Statement and each director of the Company shall have the same rights to
contribution as the Company, subject in each case to the applicable terms and
conditions of this paragraph (d).
(e) Without limitation of and in addition to its obligations under
the other paragraphs of this Section 8, the Company agrees to indemnify and hold
harmless the Independent Underwriter, its directors, officers, employees and
agents and each person who controls the Independent Underwriter within the
meaning of either the Act or the Exchange Act against any and all losses,
claims, damages or liabilities, joint or several, to which they or any of them
may become subject, insofar as such losses, claims, damages or liabilities (or
action in respect thereof) arise out of or are based upon the Independent
Underwriter's acting as a "qualified independent underwriter" (within the
meaning of National Association of Securities Dealers, Inc. Conduct Rule 2720)
in connection with the offering contemplated by this Agreement, and agrees to
reimburse each such indemnified party, as incurred, for any legal or other
expenses reasonably incurred by it in connection with investigating or defending
any such loss, claim, damage, liability or action; provided, however, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability results from the gross negligence or willful
misconduct of the Independent Underwriter.
(f) In the event that the indemnity and contribution provided in
paragraph (a), (d) or (e) of this Section 8 is unavailable to or insufficient to
hold harmless any Convertible Notes Underwriter, any director, officer, employee
or agent of any Convertible Notes Underwriter or any person who controls any
Convertible Notes Underwriter within the meaning of either the Act or the
Exchange Act by reason of the Company having failed to fulfill in any respect
its payment obligations under any such paragraph, Citigroup agrees to indemnify
and hold harmless any such indemnified person, or to contribute to the Losses of
any such indemnified person, as the case may be, to the extent of such
unavailability or insufficiency. Notwithstanding anything to the contrary in
this Section 8, in no case shall Citigroup be responsible for any amount under
the indemnity and contribution provisions of this Section 8 in excess of
$250,000,000.
9. Default by a Convertible Notes Underwriter. If any one or more
Convertible Notes Underwriters shall fail to purchase and pay for any of the
Securities agreed to be purchased by such Convertible Notes Underwriter or
Convertible Notes Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Convertible Notes Underwriters shall be obligated
severally to take up and pay for (in the respective proportions which the amount
of Securities set forth opposite their names in Schedule I hereto bears to the
aggregate amount of Securities set forth opposite the names of all the remaining
Convertible Notes Underwriters) the Securities which the defaulting Convertible
Notes Underwriter or Convertible Notes Underwriters agreed but failed to
purchase; provided, however, that in the event that the aggregate amount of
Securities which the defaulting Convertible Notes Underwriter or Convertible
Notes Underwriters agreed but failed to purchase shall exceed 10% of the
aggregate amount of Securities set
23
forth in Schedule I hereto, the remaining Convertible Notes Underwriters shall
have the right to purchase all, but shall not be under any obligation to
purchase any, of the Securities, and if such nondefaulting Convertible Notes
Underwriters do not purchase all the Securities, this Agreement will terminate
without liability to any nondefaulting Convertible Notes Underwriter, the
Company or Citigroup. In the event of a default by any Convertible Notes
Underwriter as set forth in this Section 9, the Closing Date shall be postponed
for such period, not exceeding five Business Days, as the Representatives shall
determine in order that the required changes in the Registration Statement and
the Prospectus or in any other documents or arrangements may be effected.
Nothing contained in this Agreement shall relieve any defaulting Convertible
Notes Underwriter of its liability, if any, to the Company, Citigroup and any
nondefaulting Convertible Notes Underwriter for damages occasioned by its
default hereunder.
10. Termination. This Agreement shall be subject to termination in
the absolute discretion of the Representatives, by notice given to the Company
and Citigroup prior to delivery of and payment for the Securities, if at any
time prior to such time (a) trading in the Company's Common Stock shall have
been suspended by the Commission or the New York Stock Exchange or trading in
securities generally on the New York Stock Exchange shall have been suspended or
limited or minimum prices shall have been established on such Exchange, (b) a
banking moratorium shall have been declared either by federal, New York State or
Connecticut State authorities or (c) there shall have occurred any outbreak or
escalation of hostilities, declaration by the United States of a national
emergency or war, or other calamity or crisis the effect of which on financial
markets is such as to make it, in the sole judgment of the Representatives,
impractical or inadvisable to proceed with the offering or delivery of the
Securities as contemplated by the Prospectus (exclusive of any supplement
thereto).
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers, of Citigroup or its officers, and of the Convertible
Notes Underwriters set forth in or made pursuant to this Agreement will remain
in full force and effect, regardless of any investigation made by or on behalf
of any Convertible Notes Underwriter or the Company or Citigroup or any of the
officers, directors, employees, agents or controlling persons referred to in
Section 8 hereof, and will survive delivery of and payment for the Securities.
The provisions of Sections 7 and 8 hereof shall survive the termination or
cancellation of this Agreement.
12. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or telefaxed to the Xxxxxxx Xxxxx Xxxxxx Inc. General Counsel (fax
no.: (000) 000-0000) and confirmed to the General Counsel, Xxxxxxx Xxxxx Barney
Inc., at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention: General
Counsel; if sent to the Company, will be mailed, delivered or telefaxed to the
Company's General Counsel (fax no.: (000) 000-0000) and confirmed to it at
Travelers Property Casualty Corp., Xxx Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx,
00000, attention of the legal department; or, if sent to Citigroup, will be
mailed, delivered or telefaxed to Citigroup's Co-General Counsel
24
(fax no.: (000) 000-0000) and confirmed to it, at Citigroup Inc., 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, attention of the Legal Department.
13. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers, directors, employees, agents and controlling persons referred to in
Section 8 hereof, and no other person will have any right or obligation
hereunder.
14. Applicable Law. This Agreement will be governed by and construed
in accordance with the laws of the State of New York applicable to contracts
made and to be performed within the State of New York.
15. Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
16. Headings. The section headings used herein are for convenience
only and shall not affect the construction hereof.
17. Definitions. The terms which follow, when used in this
Agreement, shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder.
"Business Day" shall mean any day other than a Saturday, a Sunday or
a legal holiday or a day on which banking institutions or trust companies
are authorized or obligated by law to close in New York City or
Connecticut.
"Commission" shall mean the Securities and Exchange Commission.
"Effective Date" shall mean each date and time that the Registration
Statement, any post-effective amendment or amendments thereto and any Rule
462(b) Registration Statement became or become effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.
"Preliminary Prospectus" shall mean any preliminary prospectus
referred to in paragraph 1(a)(i) above and any preliminary prospectus
included in the Registration Statement at the Effective Date that omits
Rule 430A Information.
"Prospectus" shall mean the prospectus relating to the Securities
that is first filed pursuant to Rule 424(b) after the Execution Time or,
if no filing
25
pursuant to Rule 424(b) is required, shall mean the form of final
prospectus relating to the Securities included in the Registration
Statement at the Effective Date.
"Registration Statement" shall mean the registration statement
referred to in paragraph 1(a) above, including exhibits and financial
statements, as amended at the Execution Time (or, if not effective at the
Execution Time, in the form in which it shall become effective), and, in
the event any post-effective amendment thereto or any Rule 462(b)
Registration Statement becomes effective prior to the Closing Date, shall
also mean such registration statement as so amended or such Rule 462(b)
Registration Statement, as the case may be. Such term shall include any
Rule 430A Information deemed to be included therein at the Effective Date
as provided by Rule 430A.
"Rule 424", "Rule 430A" and "Rule 462" refer to such rules under the
Act.
"Rule 430A Information" shall mean information with respect to the
Securities and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b)
relating to the offering covered by the registration statement referred to
in Section 1(a)(i) hereof.
"Trust Indenture Act" shall mean the Trust Indenture Act of 1939, as
amended, and the rules and regulations of the Commission promulgated
thereunder.
26
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company, Citigroup and the several Convertible Notes Underwriters.
Very truly yours,
TRAVELERS PROPERTY CASUALTY CORP.
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: General Counsel and Secretary
CITIGROUP INC.
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Controller
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
Xxxxxxx Xxxxx Xxxxxx Inc.
Credit Suisse First Boston Corporation
Xxxxxxx, Sachs & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Xxxxxx X. Xxxxxxx & Company, Inc.
Xxxxxxxx Capital Partners, L.P.
By: Xxxxxxx Xxxxx Barney Inc.
By: /s/ Xxxxxxx Xxxxxxxx
--------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Managing Director
For themselves and the other several Convertible Notes Underwriters named in
Schedule I to the foregoing Agreement.
