EXHIBIT 1.1
1,500,000 Shares
PENNZOIL COMPANY
6.49% CUMULATIVE PREFERRED STOCK, SERIES A
UNDERWRITING AGREEMENT
----------------------
May 28, 1998
PAINEWEBBER INCORPORATED
DEUTSCHE XXXXXX XXXXXXXX INC.
XXXXXX XXXXXXX & CO. INCORPORATED
c/o PaineWebber Incorporated
1285 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Pennzoil Company, a Delaware corporation (the "Company"), proposes to sell
an aggregate of 1,500,000 shares (the "Shares") of the Company's 6.49%
Cumulative Preferred Stock, Series A, par value $1.00 per share (the "Preferred
Stock"), to you (collectively, the "Underwriters"). The Preferred Stock has a
liquidation preference of $100 per share.
The initial public offering price per share for the Shares shall be $100
and the purchase price per share for the Shares to be paid by the several
Underwriters shall be agreed upon by the Company and the Underwriters, and such
agreement shall be set forth in a separate written instrument substantially in
the form of Exhibit A hereto (the "Price Determination Agreement"). The Price
Determination Agreement may take the form of an exchange of any standard form of
written telecommunication among the Company and the Underwriters and shall
specify such applicable information as is indicated in Exhibit A hereto. The
offering of the Shares will be governed by this Agreement, as supplemented by
the Price Determination Agreement. From and after the date of the execution and
delivery of the Price Determination Agreement, this Agreement shall be deemed to
incorporate, and, unless the context otherwise indicates, all references
contained herein to "this Agreement" and to the phrase "herein" shall be deemed
to include the Price Determination Agreement.
The Company confirms as follows its agreements with the several
Underwriters.
Section 1. Agreement to Sell and Purchase.
(a) On the basis of the representations, warranties and
agreements of the Company herein contained and subject to all the terms and
conditions of this Agreement, the Company agrees to sell to each
Underwriter named below, and each Underwriter, severally and not jointly,
agrees to purchase from the Company at the purchase price per share for the
Shares to be agreed upon by the Underwriters and the Company in accordance
with Section 1(b) hereof and set forth in the Price Determination
Agreement, the number of Shares set forth opposite the name of such
Underwriter in Schedule I, plus such additional number of Shares which such
Underwriter may become obligated to purchase pursuant to Section 8 hereof.
Schedule I may be attached to the Price Determination Agreement.
(b) The initial public offering price per share for the Shares
and the purchase price per share for the Shares to be paid by the several
Underwriters shall be agreed upon and set forth in the Price Determination
Agreement. In the event such price has not been agreed upon and the Price
Determination Agreement has not been executed by the close of business on
the fourteenth business day following the date of this Agreement, this
Agreement shall terminate forthwith, without liability of any party to any
other party except that Section 6 shall remain in effect.
Section 2. Delivery and Payment.
Delivery of the Shares shall be made to the Underwriters through the
facilities of the Depositary Trust Company ("DTC") from the account of the
Company with DTC against payment of the purchase price by wire transfer of
Federal Funds or similar same day funds to an account designated in writing by
the Company to PaineWebber Incorporated at least one business day prior to the
Closing Date (as hereinafter defined). Such payment shall be made at 10:00 a.m.,
New York City time, on the third business day (or fourth business day, if the
Price Determination Agreement is executed after 4:30 p.m.) after the date on
which the first bona fide offering of the Shares to the public is made by the
Underwriters or at such time on such other date, not later than 10 business days
after such date, as may be agreed upon by the Company and the Underwriters (such
date is hereinafter referred to as the "Closing Date").
The cost of original issue tax stamps, if any, in connection with the
issuance and delivery of the Shares by the Company to the respective
Underwriters shall be borne by the Company. The Company will pay and save each
Underwriter and any subsequent holder of the Shares harmless from any and all
liabilities with respect to or resulting from any failure or delay in paying
Federal and state stamp and other transfer taxes, if any, which may be payable
or determined to be payable in connection with the original issuance or sale to
such Underwriter of the Shares.
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Section 3. Representations and Warranties of the Company.
The Company represents, warrants and covenants to each Underwriter that:
(a) The Company meets the requirements for use of Form S-3 and a
registration statement (Registration No. 33-50953) on Form S-3 relating to
the debt securities, equity securities (including Preferred Stock) and
warrants of the Company, including a preliminary prospectus and such
amendments to such registration statement as may have been required to the
date of this Agreement, has been prepared by the Company under the
provisions of the Securities Act of 1933, as amended (the "Act"), and the
rules and regulations (collectively referred to as the "Rules and
Regulations") of the Securities and Exchange Commission (the "Commission")
thereunder, and has been filed with the Commission. Such registration
statement, as so amended, has been declared effective by the Commission.
The term "preliminary prospectus" as used herein means the prospectus,
dated November 10, 1993, as supplemented by the preliminary prospectus
supplement, dated May 20, 1998, relating to the Shares). Copies of such
registration statement and amendments and of each related preliminary
prospectus have been delivered to the Underwriters. The term "Registration
Statement" means the registration statement as amended at the time it
became effective (the "Effective Date"), including financial statements and
all exhibits thereto. The prospectus in the form first used to confirm
sales of shares (including the information contained in any prospectus
supplement relating to the Shares) is hereinafter referred to collectively
as the "Prospectus." Any reference herein to the Registration Statement,
any preliminary prospectus or the Prospectus shall be deemed to refer to
and include the documents incorporated by reference therein pursuant to
Item 12 of Form S-3 which were filed under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), on or before the Effective Date or
the date of such preliminary prospectus or the Prospectus, as the case may
be. Any reference herein to the terms "amend," "amendment" or "supplement"
with respect to the Registration Statement, any preliminary prospectus or
the Prospectus shall be deemed to refer to and include the filing of any
document under the Exchange Act after the Effective Date, or the date of
any preliminary prospectus or the Prospectus, as the case may be, and
deemed to be incorporated therein by reference.
(b) On the Effective Date, the date the Prospectus is first filed
with the Commission pursuant to Rule 424(b) (if required), at all times
subsequent to and including the Closing Date and, if later, when any post-
effective amendment to the Registration Statement becomes effective or any
amendment or supplement to the Prospectus is filed with the Commission, the
Registration Statement and the Prospectus (as amended or as supplemented if
the Company shall have filed with the Commission any amendment or
supplement thereto), including the financial statements included or
incorporated by reference in the Prospectus, did or will comply in all
material respects with the applicable provisions of the Act, the Exchange
Act, the rules and regulations thereunder (the "Exchange Act Rules and
Regulations") and the Rules and Regulations. On the Effective Date and when
any post-effective amendment to the Registration Statement becomes
effective, the Registration Statement did not contain and any such
amendment did not or will not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading. At the
Effective Date,
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the date the Prospectus or any amendment or supplement to the Prospectus is
filed with the Commission and at the Closing Date the Prospectus did not or
will not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The foregoing
representations and warranties in this Section 3(b) do not apply to any
statements or omissions made in reliance on and in conformity with
information relating to any Underwriter furnished in writing to the Company
by the Underwriters specifically for inclusion in the Registration
Statement or Prospectus or any amendment or supplement thereto. For all
purposes of this Agreement, the "price to public" set forth on the cover
page of the Prospectus, the last paragraph on the cover page of the
Prospectus, the first paragraph on page S-2 of the Prospectus, the
information contained in the table under the caption "Underwriting" set
forth in the Prospectus and the third and seventh paragraphs under the
caption "Underwriting" set forth in the Prospectus constitute the only
information relating to any Underwriter furnished in writing to the Company
by the Underwriters specifically for inclusion in the Registration
Statement, the preliminary prospectus or the Prospectus. The Company has
not distributed any offering material in connection with the offering or
sale of the Shares other than the Registration Statement, the preliminary
prospectus, the Prospectus or any other materials, if any, permitted by the
Act.
(c) The documents which are incorporated by reference in the
preliminary prospectus and the Prospectus or from which information is so
incorporated by reference, when they become effective or were filed with
the Commission, as the case may be, complied in all material respects with
the requirements of the Act or the Exchange Act, as applicable, the
Exchange Act Rules and Regulations and the Rules and Regulations; and any
documents so filed and incorporated by reference subsequent to the
Effective Date shall, when they are filed with the Commission, conform in
all material respects with the requirements of the Act and the Exchange
Act, as applicable, the Exchange Act Rules and Regulations and the Rules
and Regulations.
(d) The Company and each of its Material Subsidiaries (as defined
herein) is, and at the Closing Date will be, a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation. The Company and each of its Material Subsidiaries has, and
at the Closing Date will have, full power and authority to conduct all the
activities conducted by it, to own or lease all the assets owned or leased
by it and to conduct its business as described in the Registration
Statement and the Prospectus. The Company and each of its Material
Subsidiaries is, and at the Closing Date will be, duly licensed or
qualified to do business and in good standing as a foreign corporation in
all jurisdictions in which the nature of the activities conducted by it or
the character of the assets owned or leased by it makes such licensing or
qualification necessary. All of the outstanding shares of capital stock of
the Material Subsidiaries have been duly authorized and validly issued and
are fully paid and non-assessable and are owned by the Company free and
clear of all liens, encumbrances and claims whatsoever. Except for the
stock of the Material Subsidiaries and as disclosed in the Registration
Statement, the Company does not own, and at the Closing Date will not own,
directly or indirectly, any shares of stock or any other equity or long-
term debt securities of any corporation or have any equity interest in any
firm, partnership, joint venture, association or other entity that
constitutes a "significant subsidiary" as such term is defined in Rule
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1-02 of Regulation S-X promulgated under the Act. Complete and correct
copies of the certificate of incorporation and of the by-laws of the
Company and each of Pennzoil Exploration and Production Company ("PEPCO"),
Richland Development Corporation ("Richland"), Pennzoil Products Company
("PPC") and Jiffy Lube International, Inc. ("Jiffy Lube" and collectively
with PEPCO and PPC, the "Material Subsidiaries") and all amendments thereto
have been delivered to the Underwriters, and no changes therein will be
made subsequent to the date hereof and prior to the Closing Date other than
the amendment to the Company's certificate of incorporation to be effected
upon the filing of the Designation (as defined herein).
(e) The Shares to be issued and sold by the Company upon such
issuance will be, duly authorized, validly issued, fully paid and
nonassessable and will not be subject to any preemptive or similar right.
The description of the Common Stock, the Preferred Stock and the Shares in
the Registration Statement and the Prospectus is, and at the Closing Date
will be, complete and accurate in all respects, and, when issued, the
Shares will conform in all material respects to the description thereof
contained in the Prospectus. As of the date of this Agreement and as of the
Closing Date, the Company does not have outstanding any shares of Preferred
Stock and no shares of any series of Preferred Stock are or, as of the
Closing Date, will be authorized, except for the 750,000 shares of Series A
Junior Participating Preferred Stock (the "Series A Junior Participating
Preferred Stock") authorized for issuance pursuant to that certain Rights
Agreement, dated as of October 28, 1994, between the Company and Chemical
Bank, as rights agent, as amended.
(f) The financial statements and schedules included or
incorporated by reference in the Registration Statement or the Prospectus
present fairly the consolidated financial position of the Company as of the
respective dates thereof and the consolidated results of operations and
cash flows of the Company for the respective periods covered thereby, all
in conformity with generally accepted accounting principles applied on a
consistent basis throughout the entire period involved, except as otherwise
disclosed in the Prospectus. The pro forma financial statements and other
pro forma financial information included or incorporated by reference in
the Registration Statement or the Prospectus (i) present fairly in all
material respects the information shown therein, (ii) have been prepared in
accordance with the Commission's rules and guidelines with respect to pro
forma financial statements and (iii) have been properly computed on the
bases described therein. The assumptions used in the preparation of the pro
forma financial statements and other pro forma financial information
included or incorporated by reference in the Registration Statement or the
Prospectus are reasonable and the adjustments used therein are appropriate
to give effect to the transactions or circumstances referred to therein. No
other financial statements or schedules of the Company are required by the
Act, the Exchange Act or the Rules and Regulations to be included in the
Registration Statement or the Prospectus. Xxxxxx Xxxxxxxx LLP (the
"Accountants") who have reported on such financial statements and
schedules, are independent accountants with respect to the Company as
required by the Act and the Rules and Regulations. The statements included
in the Registration Statement with respect to the Accountants pursuant to
Rule 509 of Regulation S-K of the Rules and Regulations are true and
correct in all material respects.
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(g) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus and prior to the
Closing Date, except as set forth in or contemplated by the Registration
Statement and the Prospectus, there has been no material adverse change in
the condition (financial or otherwise), earnings or business affairs of the
Company and its consolidated subsidiaries, considered as one enterprise.
(h) The Company is not an "investment company" or an "affiliated
person" of, or "promoter" or "principal underwriter" for, an "investment
company," as such terms are defined in the Investment Company Act of 1940,
as amended.
(i) There is no material litigation or governmental proceeding
pending, nor, to the knowledge of the Company, is any material litigation
or governmental proceeding threatened against the Company or any of its
subsidiaries which, to the knowledge of the Company, would materially
adversely affect the purchase and sale of the Shares or would be required
to be disclosed in the Registration Statement or the Prospectus which is
not disclosed in the Registration Statement or the Prospectus.
(j) The Company and each of its Subsidiaries has, and at the
Closing Date will have, all governmental licenses, permits, consents,
orders, approvals and other authorizations necessary to carry on its
business as contemplated in the Prospectus. Neither the Company nor any of
its subsidiaries is, nor at the Closing Date will any of them be, in
violation of any provision of its certificate of incorporation or by-laws.
No default exists under any material contract or agreement to which the
Company or any of its subsidiaries is a party, which has or would have a
material adverse effect on the condition (financial or otherwise), earnings
or business affairs of the Company and its consolidated subsidiaries,
considered as one enterprise, except as disclosed in the Registration
Statement or in the Prospectus.
(k) All authorizations, approvals, consents, permits or licenses,
if any, of any regulatory body or authority (other than under the 1933 Act
or the securities or Blue Sky laws of the various states) required for the
issuance and delivery of the Shares by the Company have been obtained, are
in full force and effect, and the copies of each thereof have been, or at
or prior to the Closing Time will be, delivered to you, except for the
filing with the Secretary of State of Delaware of a certificate of
designation setting forth the voting powers, designations, preferences and
relative, participating, optional and other special rights, and
qualifications, limitations or restrictions, of the Shares (the
"Designation") to be filed by the Company prior to the Closing Date.
(l) The Company has full corporate power and authority to enter
into this Agreement. This Agreement has been duly authorized, executed and
delivered by the Company. The execution and delivery of this Agreement, the
consummation of the transactions contemplated herein and compliance with
the terms of this Agreement do not and will not conflict with or result in
a breach of any of the terms or provisions of, or constitute a default
under, the charter documents or by-laws of the Company or any of its
subsidiaries, or any indenture, mortgage or other agreement or instrument
to which the Company or any of its subsidiaries is a party or by which the
Company
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or any of its subsidiaries or their respective property is bound, or any
existing applicable law, rule, regulation, judgment, order or decree of any
government, governmental instrumentality or court, domestic or foreign,
having jurisdiction over the Company or any of the Subsidiaries or their
respective property.
(m) There are no contracts of the Company or of any Subsidiary of
a character required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement which
are not described and filed as required. All such contracts to which the
Company or any Subsidiary is a party have been duly authorized, executed
and delivered by the Company or such Subsidiary, constitute valid and
binding agreements of the Company or such Subsidiary and are enforceable
against the Company or such Subsidiary in accordance with the terms
thereof.
(n) Any certificate signed by an officer of the Company or a
Subsidiary and delivered to you or counsel for the Underwriters shall be
deemed a representation and warranty by the Company to each Underwriter as
to the matters covered thereby and each such representation and warranty
shall be accurate when made.
(o) Neither the Company nor any of its directors, officers or
controlling persons has taken, directly or indirectly, any action intended,
or which might reasonably be expected, to cause or result, under the Act or
otherwise, in, or which has constituted, stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale
of the Shares.
(p) No holder of securities of the Company has rights to the
registration of any securities of the Company because of the filing of the
Registration Statement.
(q) The Company and its Subsidiaries are in compliance with all
federal, state and local employment and labor laws, including, but not
limited to, laws relating to non-discrimination in hiring, promotion and
pay of employees; no labor dispute with the employees of the Company or any
Subsidiary exists or, to the knowledge of the Company, is imminent or
threatened; and the Company is not aware of any existing, imminent or
threatened labor disturbance by the employees of any of its principal
suppliers, manufacturers or contractors that could result in any material
adverse effect on the condition (financial or otherwise), earnings or
business affairs of the Company and its subsidiaries, considered as one
enterprise.
(r) The Company has complied, and until the completion of the
distribution of the Shares will comply, with all of the provisions of
(including, without limitation, filing all forms required by) Section
517.075 of the Florida Securities and Investor Protection Act and
Regulation 3E-900.001 issued thereunder with respect to the offering and
sale of the Shares.
(s) Except as disclosed in the Prospectus, the Company and its
Subsidiaries (i) are in compliance with any and all applicable foreign,
federal, state and local laws and regulations relating to the protection of
human health and safety, the environment or imposing liability or
7
standards of conduct concerning any Hazardous Material (as hereinafter
defined) ("Environmental Laws"), (ii) have received all permits, licenses
or other approvals required of them under applicable Environmental Laws to
conduct their respective businesses and (iii) are in compliance with all
terms and conditions of any such permit, license or approval, except where
such noncompliance with Environmental Laws, failure to receive required
permits, licenses or other approvals or failure to comply with the terms
and conditions of such permits, licenses or approvals would not,
individually or in the aggregate result in a material adverse effect on the
condition (financial or otherwise), earnings or business affairs of the
Company and its subsidiaries, considered as one enterprise. The term
"Hazardous Material" means (A) any "hazardous substance" as defined by the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended, (B) any "hazardous waste" as defined by the Resource
Conservation and Recovery Act, as amended, (C) any petroleum or petroleum
product, (D) any polychlorinated biphenyl and (E) any pollutant or
contaminant or hazardous, dangerous, or toxic chemical, material, waste or
substance regulated under or within the meaning of any other Environmental
Law.
(t) Except as set forth in the Registration Statement and the
Prospectus there are no costs and liabilities associated with or arising in
connection with Environmental Laws as currently in effect (including,
without limitation, costs of compliance therewith) which would, singly or
in the aggregate have any material adverse effect on the condition
(financial or otherwise), earnings or business affairs of the Company and
its subsidiaries, considered as one enterprise.
(u) The Company maintains insurance with respect to its
properties and business of the types and in amounts generally deemed
adequate for its business and consistent with insurance coverage maintained
by similar companies and businesses, all of which insurance is in full
force and effect.
(v) The Company has filed all material federal, state and foreign
income and franchise tax returns and has paid all taxes shown as due
thereon, other than taxes which are being contested in good faith and for
which adequate reserves have been established in accordance with generally
accepted accounting principles ("GAAP"); and the Company has no knowledge
of any tax deficiency which has been or might be asserted or threatened
against the Company. There are no tax returns of the Company or any of its
Subsidiaries that are currently being audited by state, local or federal
taxing authorities or agencies (and with respect to which the Company or
any Subsidiary has received notice), where the findings of such audit, if
adversely determined, would result in a material adverse effect on the
condition (financial or otherwise), earnings or business affairs of the
Company and its subsidiaries, considered as one enterprise.
(w) Except for the recent announcement by Xxxxx'x Investor's
Services ("Xxxxx'x) that it has posted the Company on its "watch list" for
a possible downgrade, no "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule 436(g)(2) under
the Act (i) has imposed (or has informed the Company that it is considering
imposing) any condition (financial or otherwise) on the Company's retaining
any rating assigned to the Company, or any securities of the Company or
(ii) has indicated to the Company that it is
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considering (A) the downgrading, suspension, or withdrawal of, or any
review for a possible change that does not indicate the direction of the
possible change in, any rating so assigned or (B) except for Xxxxx'x, any
change in the outlook for any rating of the Company, or any securities of
the Company.
Section 4. Agreements of the Company.
The Company agrees with the several Underwriters as follows:
(a) The Company will not, during such period as the Prospectus is
required by law to be delivered in connection with sales of the Shares by
an Underwriter or dealer, file any amendment or supplement to the
Registration Statement or the Prospectus, unless a copy thereof shall first
have been submitted to the Underwriters within a reasonable period of time
prior to the filing thereof and the Underwriters shall not have objected
thereto in good faith.
(b) The Company will notify the Underwriters promptly, and will
confirm such advice in writing, (1) when any post-effective amendment to
the Registration Statement becomes effective, (2) of any request by the
Commission for amendments or supplements to the Registration Statement or
the Prospectus or for additional information, (3) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or the initiation of any proceedings for that
purpose or the threat thereof, (4) of the happening of any event during the
period referred to in the second sentence of Section 4(e) that in the
judgment of the Company makes any statement made in the Registration
Statement or the Prospectus untrue or that requires the making of any
changes in the Registration Statement or the Prospectus in order to make
the statements therein, in light of the circumstances in which they are
made, not misleading and (5) of receipt by the Company or any
representative or attorney of the Company of any other communication from
the Commission relating to the Company, the Registration Statement, any
preliminary prospectus or the Prospectus. If at any time the Commission
shall issue any order suspending the effectiveness of the Registration
Statement, the Company will make every reasonable effort to obtain the
withdrawal of such order at the earliest possible moment.
(c) The Company will furnish to the Underwriters, without charge,
signed copies of the Registration Statement and of any post-effective
amendment thereto, including financial statements and schedules, and all
exhibits thereto (including any document filed under the Exchange Act and
deemed to be incorporated by reference into the Prospectus), and will
furnish to the Underwriters, without charge, for transmittal to each of the
other Underwriters, a copy of the Registration Statement and any post-
effective amendment thereto, including financial statements and schedules
but without exhibits.
(d) The Company will comply with all the provisions of any
undertakings contained in the Registration Statement.
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(e) From time to time after the execution and delivery of this
Agreement, the Company will deliver to each of the Underwriters, without
charge, as many copies of the Prospectus or any amendment or supplement
thereto as the Underwriters may reasonably request. The Company consents to
the use of the Prospectus or any amendment or supplement thereto by the
several Underwriters and by all dealers to whom the Shares may be sold,
both in connection with the offering or sale of the Shares and for any
period of time thereafter during which the Prospectus is required by law to
be delivered in connection therewith. If during such period of time any
event shall occur which in the judgment of the Company or counsel to the
Underwriters would require the Prospectus to be amended or supplemented in
order to make any statement therein, in the light of the circumstances
under which it was made, not misleading, or if it is necessary to
supplement or amend the Prospectus to comply with law, the Company will
forthwith prepare and duly file with the Commission an appropriate
supplement or amendment thereto, and will deliver to each of the
Underwriters, without charge, such number of copies thereof as the
Underwriters may reasonably request. The Company will inform you of its
intention to file any amendment to the Registration Statement, any
supplement to the Prospectus or any document that would as a result thereof
be incorporated by reference in the Prospectus; will furnish you with
copies of any such amendment, supplement or other document a reasonable
time in advance of filing; and will not file any such amendment, supplement
or other document in a form to which you or your counsel shall reasonably
object; except that the Company shall inform you of its intention to file
documents pursuant to Section 14(d) of the 1934 Act and shall furnish you
with copies of such documents immediately upon the filing thereof, but you
or your counsel shall not be entitled to object thereto.
(f) Prior to any public offering of the Shares by the
Underwriters, the Company will cooperate with the Underwriters and counsel
to the Underwriters in connection with the registration or qualification of
the Shares for offer and sale under the securities or Blue Sky laws of such
jurisdictions as the Underwriters may request; provided, that in no event
shall the Company be obligated to qualify to do business or as a dealer in
securities in any jurisdiction where it is not now so qualified or to take
any action which would subject it to general service of process in any
jurisdiction where it is not now so subject or to subject itself to
taxation in respect of doing business in any jurisdiction in which it is
not otherwise so subject.
(g) During the period of five years commencing on the Effective
Date, the Company will furnish to the Underwriters and each other
Underwriter who may so request copies of such financial statements and
other periodic and special reports as the Company may from time to time
distribute generally to the holders of any class of its capital stock, and
will furnish to the Underwriters and each other Underwriter who may so
request a copy of each annual or other report it shall be required to file
with the Commission.
(h) The Company will make generally available to holders of its
securities as soon as may be practicable but in no event later than the
last day of the fifteenth full calendar month following the calendar
quarter in which the Effective Date falls, an earnings statement (which
need not be audited but shall be in reasonable detail) for a period of 12
months ended commencing after
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the Effective Date, and satisfying the provisions of Section 11(a) of the
Act (including Rule 158 of the Rules and Regulations).
(i) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, the Company will
pay, or reimburse if paid by the Underwriters, all costs and expenses
incident to the performance of the obligations of the Company under this
Agreement, including but not limited to costs and expenses of or relating
to (1) the preparation, printing and filing of the Registration Statement
and exhibits to it, each preliminary prospectus, the Prospectus and any
amendment or supplement to the Registration Statement or the Prospectus,
(2) the preparation and delivery of certificates representing the Shares,
(3) the word processing, printing and reproduction of this Agreement, the
Agreement Among Underwriters, any Dealer Agreements and any Underwriters'
Questionnaire, (4) furnishing (including costs of shipping, mailing and
courier) such copies of the Registration Statement, the Prospectus and any
preliminary prospectus, and all amendments and supplements thereto, as may
be requested for use in connection with the offering and sale of the Shares
by the Underwriters or by dealers to whom Shares may be sold, (5) any
filings required to be made by the Underwriters with the NASD, and the
fees, disbursements and other charges of counsel for the Underwriters in
connection therewith, (6) the registration or qualification of the Shares
for offer and sale under the securities or Blue Sky laws of such
jurisdictions designated pursuant to Section 4(f), including the fees,
disbursements and other charges of counsel to the Underwriters in
connection therewith, and the preparation and printing of preliminary,
supplemental and final Blue Sky memoranda, (7) the preparation and filing
of the Designation, (8) counsel to the Company, (9) the transfer agent for
the Shares and (10) the Accountants and Xxxxx Xxxxx.
(j) If this Agreement shall be terminated by the Company pursuant
to any of the provisions hereof (otherwise than pursuant to Section 8) or
if for any reason the Company shall be unable to perform its obligations
hereunder, the Company will reimburse the several Underwriters for all out-
of-pocket expenses (including the fees, disbursements and other charges of
counsel to the Underwriters) reasonably incurred by them in connection
herewith.
(k) The Company will not at any time, directly or indirectly,
take any action intended, or which might reasonably be expected, to cause
or result in, or which will constitute, stabilization of the price of the
shares of Common Stock to facilitate the sale or resale of any of the
Shares.
(l) The Company will apply the net proceeds from the offering and
sale of the Shares to be sold by the Company in the manner set forth in the
Prospectus under "Use of Proceeds."
Section 5. Conditions of the Obligations of the Underwriters.
In addition to the execution and delivery of the Price Determination
Agreement, the obligations of each Underwriter hereunder are subject to the
following conditions:
11
(a) The Registration Statement has become effective and all
filings required by Rule 424 of the Rules and Regulations and Rule 430A have
been made.
(b) (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall be pending or threatened by the Commission, (ii) no order
suspending the effectiveness of the Registration Statement or the qualification
or registration of the Shares under the securities or Blue Sky laws of any
jurisdiction shall be in effect and no proceeding for such purpose shall be
pending before or threatened or contemplated by the Commission or the
authorities of any such jurisdiction, (iii) any request for additional
information on the part of the staff of the Commission or any such authorities
shall have been complied with to the satisfaction of the staff of the Commission
or such authorities and (iv) after the date hereof no amendment or supplement to
the Registration Statement or the Prospectus shall have been filed unless a copy
thereof was first submitted to the Underwriters and the Underwriters did not
object thereto in good faith, and the Underwriters shall have received
certificates, dated the Closing Date and signed by the Group Vice President-
Finance and Accounting and Corporate Secretary of the Company (who may, as to
proceedings threatened, rely upon the best of their information and belief), to
the effect of clauses (i), (ii) and (iii).
(c) Since the respective dates as of which information is given
in the Registration Statement and the Prospectus, (i) there shall not have been
any material adverse change in the condition (financial or otherwise), earnings
or business affairs of the Company and its subsidiaries, considered as one
enterprise, whether or not arising in the ordinary course of business, other
than as set forth in or contemplated by the Prospectus, and (ii) neither the
Company nor any of its Subsidiaries shall have sustained any material loss or
interference with its business or properties from fire, explosion, flood or
other casualty, whether or not covered by insurance, or from any labor dispute
or any court or legislative or other governmental action, order or decree, which
is not set forth in the Registration Statement and the Prospectus, if in the
judgment of the Underwriters any such development makes it impracticable or
inadvisable to consummate the sale and delivery of the Shares by the
Underwriters at the initial public offering price.
(d) Since the respective dates as of which information is given
in the Registration Statement and the Prospectus, no action, suit or proceeding
at law or in equity shall be pending or, to the knowledge of the Company,
threatened against the Company or any subsidiary which would be required to be
set forth in the Prospectus other than as set forth therein and no proceedings
shall be pending or, to the knowledge of the Company, threatened against the
Company or any subsidiary before or by any federal, state or other commission,
board or administrative agency wherein an unfavorable decision, ruling or
finding would materially adversely affect the condition (financial or
otherwise), earnings or business affairs of the Company and its consolidated
subsidiaries, considered as one enterprise, other than as set forth in the
Prospectus.
(e) Each of the representations and warranties of the Company
contained herein shall be true and correct in all material respects at the
Closing Date, as if made at the Closing Date, and all covenants and agreements
herein contained to be performed on the part of the Company and
12
all conditions herein contained to be fulfilled or complied with by the Company
at or prior to the Closing Date, shall have been duly performed, fulfilled or
complied with.
(f) The Underwriters shall have received an opinion, dated the
Closing Date and satisfactory in form and substance to counsel for the
Underwriters, from Xxxxx & Xxxxx, L.L.P., counsel to the Company, to the effect
set forth in Exhibit B.
(g) The Underwriters shall have received an opinion, dated the
Closing Date, from Xxxxxxx & Xxxxx L.L.P., counsel to the Underwriters, with
respect to the Registration Statement, the Prospectus and this Agreement, which
opinion shall be reasonably satisfactory in all respects to the Underwriters.
(h) On the date of the Prospectus, the Accountants shall have
furnished to the Underwriters a letter, dated the date of its delivery,
addressed to the Underwriters and in form and substance satisfactory to the
Underwriters, confirming that they are independent accountants with respect to
the Company as required by the Act and the Rules and Regulations and with
respect to the financial and other statistical and numerical information
contained in the Registration Statement or incorporated by reference therein. At
the Closing Date, the Accountants shall have furnished to the Underwriters a
letter, dated the date of its delivery, which shall confirm, on the basis of a
review in accordance with the procedures set forth in the letter from the
Accountants, that nothing has come to their attention during the period from the
date of the letter referred to in the prior sentence to a date (specified in the
letter) not more than five days prior to the Closing Date which would require
any change in their letter dated the date of the Prospectus, if it were required
to be dated and delivered at the Closing Date.
(i) At the Closing Date, there shall be furnished to the
Underwriters an accurate certificate, dated the date of its delivery, signed by
each of the Group Vice President-Finance and Accounting and Corporate Secretary
of the Company, in form and substance satisfactory to the Underwriters, to the
effect that:
(i) Each signer of such certificate has carefully
examined the Registration Statement and the Prospectus (including any
documents filed under the Exchange Act and deemed to be incorporated by
reference into the Prospectus) and (A) as of the date of such
certificate, such documents are true and correct in all material
respects and do not omit to state a material fact required to be stated
therein or necessary in order to make the statements therein not untrue
or misleading and (B) since the Effective Date, no event has occurred as
a result of which it is necessary to amend or supplement the Prospectus
in order to make the statements therein not untrue or misleading in any
material respect and there has been no document required to be filed
under the Exchange Act and the Exchange Act Rules and Regulations that
upon such filing would be deemed to be incorporated by reference into
the Prospectus that has not been so filed;
13
(ii) Each of the representations and warranties of the Company
contained in this Agreement were, when originally made, and are, at the
time such certificate is delivered, true and correct in all material
respects;
(iii) Each of the covenants required herein to be performed by
the Company on or prior to the delivery of such certificate has been
duly, timely and fully performed and each condition herein required to
be complied with by the Company on or prior to the date of such
certificate has been duly, timely and fully complied with; and
(iv) Since the respective dates as of which information is given
in the Registration Statement and the Prospectus, (A) there has not
been, and no development has occurred which could reasonably be expected
to result in, a material adverse change in the condition (financial or
otherwise), earnings or business affairs of the Company and its
subsidiaries, considered as one enterprise, whether or not arising from
transactions in the ordinary course of business, in each case other than
as set forth in or contemplated by the Registration Statement and the
Prospectus and (B) neither the Company nor any of its Subsidiaries has
sustained any material loss or interference with its business or
properties from fire, explosion, flood or other casualty, whether or not
covered by insurance, or from any labor dispute or any court or
legislative or other governmental action, order or decree, which is not
set forth in the Registration Statement and the Prospectus, and such
other matters as the Underwriters may reasonably request.
(j) The Shares shall be qualified for sale in such states as the
Underwriters may reasonably request, each such qualification shall be in effect
and not subject to any stop order or other proceeding on the Closing Date.
(k) The Company shall have obtained the approval of DTC for "book
entry" transfer of the Shares (and such approval shall not have been withdrawn
or terminated), and the Company shall have agreed to comply with the
requirements of DTC applicable to such "book entry" transfer of the Shares.
(l) The Company shall have furnished to the Underwriters such
certificates, in addition to those specifically mentioned herein, as the
Underwriters may have reasonably requested as to the accuracy and completeness
at the Closing Date of any statement in the Registration Statement or the
Prospectus or any documents filed under the Exchange Act and deemed to be
incorporated by reference into the Prospectus, as to the accuracy at the Closing
Date of the representations and warranties of the Company herein, as to the
performance by the Company of its obligations hereunder, or as to the
fulfillment of the conditions concurrent and precedent to the obligations
hereunder of the Underwriters.
14
Section 6. Indemnification.
(a) The Company will indemnify and hold harmless each
Underwriter, the directors, officers, employees and agents of each Underwriter
and each person, if any, who controls each Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, from and against any
and all losses, claims, liabilities, expenses and damages (including, but not
limited to, any and all investigative, legal and other expenses reasonably
incurred in connection with, and any and all amounts paid in settlement of, any
action, suit or proceeding between any of the indemnified parties and any
indemnifying parties or between any indemnified party and any third party, or
otherwise, or any claim asserted), as and when incurred, to which any
Underwriter, or any such person, 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, liabilities, expenses or damages
arise out of or are based on (i) any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus, the
Registration Statement or the Prospectus or any amendment or supplement to the
Registration Statement or the Prospectus or in any documents filed under the
Exchange Act and deemed to be incorporated by reference into the Prospectus, or
in any application or other document executed by or on behalf of the Company or
based on written information furnished by or on behalf of the Company filed in
any jurisdiction in order to qualify the Shares under the Securities Laws
thereof or filed with the Commission, (ii) the omission or alleged omission to
state in such document a material fact required to be stated in it or necessary
to make the statements in it not misleading or (iii) any act or failure to act
or any alleged act or failure to act by any Underwriter in connection with, or
relating in any manner to, the Shares or the offering contemplated hereby, and
which is included as part of or referred to in any loss, claim, liability,
expense or damage arising out of or based upon matters covered by clause (i) or
(ii) above (provided that the Company shall not be liable under this clause
(iii) to the extent it is finally judicially determined by a court of competent
jurisdiction that such loss, claim, liability, expense or damage resulted
directly from any such acts or failures to act undertaken or omitted to be taken
by such underwriter through its gross negligence or willful misconduct);
provided that the Company will not be liable to the extent that such loss,
claim, liability, expense or damage arises from the sale of the Shares in the
public offering to any person by an Underwriter and is based on an untrue
statement or omission or alleged untrue statement or omission made in reliance
on and in conformity with information relating to any Underwriter furnished in
writing to the Company by the Underwriters on behalf of any Underwriter
expressly for inclusion in the Registration Statement, any preliminary
prospectus or the Prospectus. This indemnity agreement will be in addition to
any liability that the Company might otherwise have.
(b) Each Underwriter will indemnify and hold harmless the
Company, each person, if any, who controls the Company within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, each director of the
Company and each officer of the Company who signs the Registration Statement to
the same extent as the foregoing indemnity from the Company to each Underwriter,
but only insofar as losses, claims, liabilities, expenses or damages arise out
of or are based on any untrue statement or omission or alleged untrue statement
or omission made in reliance on and in conformity with information relating to
any Underwriter furnished in writing to the
15
Company by the Underwriters on behalf of such Underwriter expressly for use in
the Registration Statement, the Preliminary Prospectus or the Prospectus. This
indemnity will be in addition to any liability that each Underwriter might
otherwise have; provided, however, that in no case shall any Underwriter be
liable or responsible for any amount in excess of the underwriting discounts and
commissions received by such Underwriter.
(c) Any party that proposes to assert the right to be indemnified under
this Section 6 will, promptly after receipt of notice of commencement of any
action against such party in respect of which a claim is to be made against an
indemnifying party or parties under this Section 6, notify each such
indemnifying party of the commencement of such action, enclosing a copy of all
papers served, but the omission so to notify such indemnifying party will not
relieve it from any liability that it may have to any indemnified party under
the foregoing provisions of this Section 6 unless, and only to the extent that,
such omission results in the forfeiture of substantive rights or defenses by the
indemnifying party. If any such action is brought against any indemnified party
and it notifies the indemnifying party of its commencement, the indemnifying
party will be entitled to participate in and, to the extent that it elects by
delivering written notice to the indemnified party promptly after receiving
notice of the commencement of the action from the indemnified party, jointly
with any other indemnifying party similarly notified, to assume the defense of
the action, with counsel satisfactory to the indemnified party, and after notice
from the indemnifying party to the indemnified party of its election to assume
the defense, the indemnifying party will not be liable to the indemnified party
for any legal or other expenses except as provided below and except for the
reasonable costs of investigation subsequently incurred by the indemnified party
in connection with the defense. The indemnified party will have the right to
employ its own counsel in any such action, but the fees, expenses and other
charges of such counsel will be at the expense of such indemnified party unless
(1) the employment of counsel by the indemnified party has been authorized in
writing by the indemnifying party, (2) the indemnified party has reasonably
concluded (based on advice of counsel) that there may be legal defenses
available to it or other indemnified parties that are different from or in
addition to those available to the indemnifying party, (3) a conflict or
potential conflict exists (based on advice of counsel to the indemnified party)
between the indemnified party and the indemnifying party (in which case the
indemnifying party will not have the right to direct the defense of such action
on behalf of the indemnified party) or (4) the indemnifying party has not in
fact employed counsel to assume the defense of such action within a reasonable
time after receiving notice of the commencement of the action, in each of which
cases the reasonable fees, disbursements and other charges of counsel will be at
the expense of the indemnifying party or parties. It is understood that the
indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate firm admitted to
practice in such jurisdiction at any one time for all such indemnified party or
parties. All such fees, disbursements and other charges will be reimbursed by
the indemnifying party promptly as they are incurred. An indemnifying party will
not be liable for any settlement of any action or claim effected without its
written consent (which consent will not be unreasonably withheld). No
indemnifying party shall, without the prior written consent of each indemnified
party, settle or compromise or consent to the entry of any judgment in any
pending or threatened claim, action or proceeding
16
relating to the matters contemplated by this Section 6 (whether or not any
indemnified party is a party thereto), unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising or that may arise out of such claim, action or proceeding.
Notwithstanding any other provision of this Section 6 (c), if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement 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.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 6 is applicable in accordance with its terms but for
any reason is held to be unavailable from the Company or the Underwriters, the
Company and the Underwriters will contribute to the total losses, claims,
liabilities, expenses and damages (including any investigative, legal and other
expenses reasonably incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claim asserted, but after
deducting any contribution received by the Company from persons other than the
Underwriters, such as persons who control the Company within the meaning of the
Act, officers of the Company who signed the Registration Statement and directors
of the Company, who also may be liable for contribution) to which the Company
and any one or more of the Underwriters may be subject in such proportion as
shall be appropriate to reflect the relative benefits received by the Company on
the one hand and the Underwriters on the other. The relative benefits received
by the Company on the one hand and the Underwriters on the other shall be deemed
to be in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover page of the Prospectus. If, but only if, the
allocation provided by the foregoing sentence is not permitted by applicable
law, the allocation of contribution shall be made in such proportion as is
appropriate to reflect not only the relative benefits referred to in the
foregoing sentence but also the relative fault of the Company, on the one hand,
and the Underwriters, on the other, with respect to the statements or omissions
which resulted in such loss, claim, liability, expense or damage, or action in
respect thereof, as well as any other relevant equitable considerations with
respect to such offering. Such relative fault shall be determined by reference
to whether the untrue or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact relates to information supplied by
the Company or the Underwriters on behalf of the Underwriters, the intent of the
parties and their relative 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 contributions pursuant to this
Section 6(d) were to be 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 into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as a
result of the loss, claim, liability, expense or damage, or action in respect
thereof, referred to
17
above in this Section 6(d) shall be deemed to include, for purpose of this
Section 6(d), any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 6(d), no Underwriter
shall be required to contribute any amount in excess of the underwriting
discounts and commissions received by it and no person found guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
will be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute as
provided in this Section 6(d) are several in proportion to their respective
underwriting obligations and not joint. For purposes of this Section 6(d), any
person who controls a party to this Agreement within the meaning of the Act will
have the same rights to contribution as that party, and each officer of the
Company who signed the Registration Statement will have the same rights to
contribution as the Company, subject in each case to the provisions hereof. Any
party entitled to contribution, promptly after receipt of notice of commencement
of any action against such party in respect of which a claim for contribution
may be made under this Section 6(d), will notify any such party or parties from
whom contribution may be sought, but the omission so to notify will not relieve
the party or parties from whom contribution may be sought from any other
obligation it or they may have under this Section 6 (d). Except for a settlement
entered into pursuant to the last sentence of Section 6 (c) hereof, no party
will be liable for contribution with respect to any action or claim settled
without its written consent (which consent will not be unreasonably withheld).
(e) The indemnity and contribution agreements contained in this
Section 6 and the representations and warranties of the Company contained in
this Agreement shall remain operative and in full force and effect regardless of
(i) any investigation made by or on behalf of the Underwriters, (ii) acceptance
of the Shares and payment therefore or (iii) any termination of this Agreement.
Section 7. Termination.
The obligations of the several Underwriters under this Agreement
may be terminated at any time on or prior to the Closing Date by notice to the
Company from the Underwriters without liability on the part of any Underwriter
to the Company, if, prior to delivery and payment for the Shares, in the sole
judgment of the Underwriters, (i) there has been, since the respective dates as
of which information is given in the Registration Statement, any material
adverse change in the Company's condition (financial or otherwise), earnings or
business affairs of the Company and its subsidiaries, considered as on
enterprise, whether or not arising in the ordinary course of business, other
than as set forth in or contemplated by the Prospectus, (ii) trading in any of
the equity securities of the Company shall have been suspended by the
Commission, the NASD, by any exchange that lists the Company's Common Stock or
by the Nasdaq Stock Market, (iii) trading in securities generally on the New
York Stock Exchange or the Nasdaq Stock Market shall have been suspended or
limited or minimum or maximum prices shall have been generally established on
such exchange or over the counter market, or additional material governmental
restrictions, not in force on the date of this Agreement, shall have been
imposed upon trading in securities generally by such exchange or by order of the
Commission or the NASD or any court or other governmental authority,
18
(iv) a general banking moratorium shall have been declared by either Federal or
New York State authorities, (v) since the execution of this Agreement there has
been (a) any downgrading, suspension or withdrawal of, or the giving of any
notice of any potential or intended downgrading, suspension or withdrawal of, or
of any review (or of any potential or intended review) for a possible change
that does not indicate the direction of the possible change in, any rating of
the Company or any securities of the Company (including, without limitation, the
placing of any of the foregoing ratings on credit watch with negative or
developing implications or under review with an uncertain direction) by any
"nationally recognized statistical rating organization" as such term is defined
for purposes of Rule 436(g)(2) under the Act, (b) any change, or any notice
given of any potential or intended change, in the outlook for any rating of the
Company or any securities of the Company by any such rating organization or (c)
any such rating organization shall have given notice that it has assigned (or is
considering assigning) a lower rating to the Shares than that on which the
Shares were marketed or (vi) any material adverse change in the financial or
securities markets in the United States or in political, financial or economic
conditions in the United States or any outbreak or material escalation of
hostilities or declaration by the United States of a national emergency or war
or other calamity or crisis shall have occurred, the effect of any of which is
such as to make it, in the sole judgment of the Underwriters, impracticable or
inadvisable to market the Shares on the terms and in the manner contemplated by
the Prospectus.
Section 8. Substitution of Underwriters.
If any one or more of the Underwriters shall fail or refuse to purchase any
of the Shares which it or they have agreed to purchase hereunder, and the
aggregate number of Shares which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate number of Shares, the other Underwriters shall be obligated,
severally, to purchase the Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase, in the proportions which
the number of Shares which they have respectively agreed to purchase pursuant to
Section 1 bears to the aggregate number of Shares which all such non-defaulting
Underwriters have so agreed to purchase, or in such other proportions as the
Underwriters may specify; provided that in no event shall the maximum number of
Shares which any Underwriter has become obligated to purchase pursuant to
Section 1 be increased pursuant to this Section 8 by more than one-ninth of the
number of Shares agreed to be purchased by such Underwriter without the prior
written consent of such Underwriter. If any Underwriter or Underwriters shall
fail or refuse to purchase any Shares and the aggregate number of Shares which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase exceeds one-tenth of the aggregate number of the Shares and
arrangements satisfactory to the Underwriters and the Company for the purchase
of such Shares are not made within 48 hours after such default, this Agreement
will terminate without liability on the part of any non-defaulting Underwriter
or the Company for the purchase or sale of any Shares under this Agreement. In
any such case either the Underwriters or the Company shall have the right to
postpone the Closing Date, but in no event for longer than seven days, in order
that the required changes, if any, in the Registration Statement and in the
Prospectus or in any other documents or arrangements may be effected. Any
action taken
19
pursuant to this Section 8 shall not relieve any defaulting Underwriter from
liability in respect of any default of such Underwriter under this Agreement.
Section 9. Miscellaneous.
Notice given pursuant to any of the provisions of this Agreement shall be
in writing and, unless otherwise specified, shall be mailed or delivered (a) if
to the Company, at the office of the Company, Pennzoil Place, 000 Xxxxxxxxx
Xxxxxx, Xxxxxxx, Xxxxx 00000, Attention: Xxxxx X. Xxxxxxxx XX, or (b) if to the
Underwriters, to PaineWebber Incorporated, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Investment Banking Division. Any such notice
shall be effective only upon receipt. Any notice under Section 7 or 8 may be
made by telex or telephone, but if so made shall be subsequently confirmed in
writing.
This Agreement has been and is made solely for the benefit of the several
Underwriters and the Company and of the controlling persons, directors and
officers referred to in Section 6, and their respective successors and assigns,
and no other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" as used in this Agreement shall
not include a purchaser, as such purchaser, of Shares from any of the several
Underwriters.
All representations, warranties and agreements of the Company contained
herein or in certificates or other instruments delivered pursuant hereto, shall
remain operative and in full force and effect regardless of any investigation
made by or on behalf of any Underwriter or any of its controlling persons and
shall survive delivery of and payment for the Shares hereunder.
Any action required or permitted to be taken by the Underwriters under this
Agreement may be taken by them jointly or by PaineWebber Incorporated.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES
OF SUCH STATE.
This Agreement may be signed in two or more counterparts with the same
effect as if the signatures thereto and hereto were upon the same instrument.
In case any provision in this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
The Company and the Underwriters each hereby irrevocably waive any right
they may have to a trial by jury in respect of any claim based upon or arising
out of this Agreement or the transactions contemplated hereby.
20
This Agreement may not be amended or otherwise modified or any provision
hereof waived except by an instrument in writing signed by the Underwriters and
the Company.
21
Please confirm that the foregoing correctly sets forth the agreement among the
Company and the several Underwriters.
Very truly yours,
PENNZOIL COMPANY
/s/ Xxxxx X. Xxxxxxxx, XX
--------------------------------
Name: Xxxxx X. Xxxxxxxx, XX
--------------------------
Title: Group Vice President--
Financing & Accounting
--------------------------
Confirmed as of the date first
above mentioned:
PAINEWEBBER INCORPORATED
DEUTSCHE XXXXXX XXXXXXXX INC.
XXXXXX XXXXXXX & CO. INCORPORATED
By: PAINEWEBBER INCORPORATED
/s/ Xxxxxxx X. Xxxxxx III
---------------------------------
Name: Xxxxxxx X. Xxxxxx III
Title: Managing Director
By: DEUTSCHE XXXXXX XXXXXXXX INC. By: DEUTSCHE XXXXXX XXXXXXXX INC.
/s/ Xxxxx X. Xxxxxxxx /s/ Xxxxx Xxxxxx
--------------------------------- ---------------------------------
Name: Xxxxx X. Xxxxxxxx Name: Xxxxx Xxxxxx
Title: Managing Director Title: Managing Director
By: XXXXXX XXXXXXX & CO. INCORPORATED
/s/ Xxxxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Principal
22
SCHEDULE I
UNDERWRITERS
@@
NUMBER OF
NAME OF SHARES TO BE
UNDERWRITERS PURCHASED
PaineWebber Incorporated........................ 500,000
Deutsche Xxxxxx Xxxxxxxx Inc.................... 500,000
Xxxxxx Xxxxxxx & Co. Incorporated............... 500,000
---------
Total........................................... 1,500,000
=========
---------
23
EXHIBIT A
PENNZOIL COMPANY
_____________________
PRICE DETERMINATION AGREEMENT
May 28, 1998
PAINEWEBBER INCORPORATED
DEUTSCHE XXXXXX XXXXXXXX INC.
XXXXXX XXXXXXX & CO. INCORPORATED
c/o PaineWebber Incorporated
1285 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Reference is made to the Underwriting Agreement, dated May 28, 1998 (the
"Underwriting Agreement"), among Pennzoil Company, a Delaware corporation (the
"Company") and PaineWebber Incorporated, Deutsche Xxxxxx Xxxxxxxx Inc. and
Xxxxxx Xxxxxxx & Co. Incorporated (collectively, the "Underwriters"). The
Underwriting Agreement provides for the purchase by the Underwriters from the
Company, subject to the terms and conditions set forth therein, of an aggregate
of 1,500,000 shares (the "Shares") of the Company's 6.49% cumulative preferred
stock, Series A, par value $1.00 per share. This Agreement is the Price
Determination Agreement referred to in the Underwriting Agreement.
Pursuant to Section 1 of the Underwriting Agreement, the undersigned agree
with the Underwriters as follows:
The initial public offering price per share for the Shares shall be
$100.00.
The purchase price per share for the Shares to be paid by the several
Underwriters shall be $98.00 representing an amount equal to the initial public
offering price set forth above, less $2.00 per share.
The Company represents and warrants to each of the Underwriters that the
representations and warranties of the Company set forth in Section 3 of the
Underwriting Agreement are accurate as though expressly made at and as of the
date hereof.
24
As contemplated by the Underwriting Agreement, attached as Schedule I is a
completed list of the several Underwriters, which shall be a part of this
Agreement and the Underwriting Agreement.
THIS AGREEMENT SHALL BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK
WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES OF SUCH STATE.
25
If the foregoing is in accordance with your understanding of the
agreement among the Underwriters and the Company, please sign and return to the
Company a counterpart hereof, whereupon this instrument along with all
counterparts and together with the Underwriting Agreement shall be a binding
agreement among the Underwriters and the Company in accordance with its terms
and the terms of the Underwriting Agreement.
Very truly yours,
PENNZOIL COMPANY
/s/ Xxxxx X. Xxxxxxxx, XX
--------------------------------
Name: Xxxxx X. Xxxxxxxx, XX
---------------------------
Title: Group Vice President--
Financing & Accounting
--------------------------
Confirmed as of the date first
above mentioned:
PAINEWEBBER INCORPORATED
DEUTSCHE XXXXXX XXXXXXXX INC.
XXXXXX XXXXXXX & CO. INCORPORATED
By: PAINEWEBBER INCORPORATED
/s/ Xxxxxxx X. Xxxxxx III
-------------------------------------
Name: Xxxxxxx X. Xxxxxx III
Title: Managing Director
By: DEUTSCHE XXXXXX XXXXXXXX INC. By: DEUTSCHE XXXXXX XXXXXXXX INC.
/s/ Xxxxx X. Xxxxxxxx /s/ Xxxxx Xxxxxx
------------------------------------- -----------------------------------
Name: Xxxxx X. Xxxxxxxx Name: Xxxxx Xxxxxx
Title: Managing Director Title: Managing Director
By: XXXXXX XXXXXXX & CO. INCORPORATED
/s/ Xxxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Principal
26
EXHIBIT B
Form of Opinion of
Counsel to the Company
Based upon the foregoing, we are of the opinion that:
1. The Company is a corporation duly incorporated and validly existing in
good standing under the laws of the State of Delaware, and each of the Material
Subsidiaries is a corporation duly incorporated and validly existing in good
standing under the laws of the state of its incorporation, and each of the
Company and the Material Subsidiaries has corporate power and authority under
such laws to own its properties and to conduct its business as described in the
Registration Statement and the Prospectus. The Company owns directly or
indirectly all of the issued and outstanding voting securities of each of its
Material Subsidiaries, and all such securities are validly issued, fully paid
and nonassessable, and the Company is not subject to personal liability solely
by reason of being the owner thereof under the General Corporation Law of the
State of Delaware.
2. The Company has all necessary corporate power and authority to issue
and deliver the Shares. The Shares have been duly authorized by the Company
and, upon issuance and delivery of the Shares and payment therefor in accordance
with the terms of the Underwriting Agreement, the Shares will be validly issued,
fully paid and non-assessable and no holder thereof will be subject to personal
liability as a result of being such a holder. The Shares will not be subject to
the preemptive rights of any stockholder of the Company.
3. The Shares conform in all material respects as to legal matters to the
descriptions thereof contained in the Prospectus.
4. The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
5. No authorization, approval, consent or license of any regulatory body
or authority (other than under the 1933 Act and the securities or Blue Sky laws
of the various states and other than the filing of the Designation with the
Secretary of State of Delaware, which filing has been made) and no approval of
the stockholders of the Company is required for the execution and delivery of
this Agreement by the Company or the valid authorization, issuance, sale and
delivery of the Shares by the Company.
B-1
6. The Registration Statement has become effective under the 1933 Act
and, to the best of our knowledge, no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings for that purpose
have been instituted or are pending or are contemplated under the 1933 Act.
7. The Registration Statement and the Prospectus, excluding the documents
incorporated by reference therein (except for the financial statements and other
financial, statistical or reserve data included therein or omitted therefrom, as
to which we express no opinion), as of their respective effective or issue
dates, appear on their face to have been appropriately responsive in all
material respects to the requirements of the 1933 Act and the 1933 Act
Regulations.
8. The documents incorporated by reference in the Prospectus (except for
the financial statements, other financial or statistical data included therein
or omitted therefrom, the summary reserve report of Xxxxx Xxxxx Company
Petroleum Engineers included therein, and other reserve data included therein or
omitted therefrom, as to which we express no opinion, and except to the extent
that any statement therein is modified or superseded in the Prospectus), as of
the dates they were filed with the Commission, appear on their face to have been
appropriately responsive in all material respects to the requirements of the
1934 Act and the 1934 Act Regulations.
9. We do not know of any statutes or regulations or any pending or
threatened legal or governmental proceedings required to be described in the
Prospectus which are not described as required, nor of any material contracts or
documents of a character required to be described in the Registration Statement
or the Prospectus or to be filed or incorporated as exhibits to the Registration
Statement which are not described and filed or incorporated as required.
10. The execution and delivery of the Underwriting Agreement, the
consummation of the transactions contemplated in the Underwriting Agreement and
compliance with the terms of the Underwriting Agreement by the Company do not
and will not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, the charter documents or by-laws
of the Company or any of its Material Subsidiaries, or, to our knowledge, any
indenture, mortgage or other agreement or instrument to which the Company or any
of its subsidiaries is a party or by which they or any of their property is
bound, or any existing applicable law, rule, regulation, or, to our knowledge,
any judgment, order or decree of any government, governmental instrumentality or
court, domestic or foreign, having jurisdiction over the Company or any of its
subsidiaries or any of their properties, which is material to the Company and
its subsidiaries, considered as one enterprise.
11. The statements in the Prospectus under the caption "Certain United
States Federal Income Tax Consequences" are a fair and accurate summary of the
information described therein.
12. The authorized capitalization of the Company is as set forth in the
Prospectus Supplement in the second paragraph under the caption "Description of
Series A Preferred Stock."
B-2
13. The Company is not an "investment company," or a company controlled by
an "investment company," within the meaning of the Investment Company Act of
1940, as amended.
14. Neither the Company nor any of its subsidiaries is a "holding company"
within the meaning of the Public Utility Holding Company Act of 1935, as
amended.
We have participated in conferences with officers and other representatives
of the Company, counsel employed by the Company, representatives of the
independent accountants of the Company, representatives of the independent
engineers of the Company and your representatives and your counsel at which the
contents of the Registration Statement and the Prospectus and related matters
were discussed. Although we are not passing upon and do not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus (except for the
statements referred to in paragraphs 3 and 11 hereof, upon which we are
passing), we advise you that, on the basis of the foregoing (relying as to
materiality to a certain extent upon certificates from officers and other
representatives of the Company), no facts have come to our attention which lead
us to believe (A) that the Registration Statement (except for the financial
statements and other financial or statistical data included therein or omitted
therefrom, the summary reserve report of Xxxxx Xxxxx Company Petroleum Engineers
included therein, or other reserve data included therein or omitted therefrom,
as to which we have not been asked to comment), at its effective date, 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 (B) that the Prospectus (except for the financial statements and
other financial or statistical data included therein or omitted therefrom, the
summary reserve report of Xxxxx Xxxxx Company Petroleum Engineers included
therein, or other reserve data included therein or omitted therefrom, as to
which we have not been asked to comment), at the time the Prospectus was issued,
or at the Closing Time, contained or contains 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-3
