EXHIBIT 1.3
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COASTAL FINANCE
[LOGO OF
COASTAL APPEARS and
HERE]
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UNDERWRITING AGREEMENT
DATED
AND
TERMS AGREEMENT
DATED
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% TRUST PREFERRED SECURITIES
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COASTAL FINANCE
UNDERWRITING AGREEMENT
, 199
[Name and Address of Lead Underwriters]
Ladies and Gentlemen:
Coastal Finance (the "Trust"), a statutory business trust formed under the
Business Trust Act (the "Delaware Act") of the State of Delaware proposes to
issue and sell from time to time certain of its Trust Preferred Securities
(liquidation amount $25 per preferred security) (the "Preferred Securities").
The Preferred Securities will be guaranteed (the "Guarantees") by The Coastal
Corporation, a Delaware corporation (the "Company" and, together with the
Trust, the "Issuers"), on a limited basis to the extent the Trust has funds
available therefor, pursuant to a Preferred Securities Guarantee Agreement
(the "Guarantee Agreement"). The aforementioned Preferred Securities, together
with the Guarantees, are collectively hereinafter referred to as the
"Securities". The Trust exists for the exclusive purpose of issuing and
selling the Preferred Securities and investing the proceeds thereof in an
equivalent principal amount of Subordinated Deferrable Interest Notes of the
Company (the "Subordinated Debt Securities"). The Securities may be sold to
you, and to other firms on whose behalf you may act, for resale in accordance
with the terms of offering determined at the time of sale. The Securities
involved in any such offering are hereinafter referred to as the "Purchased
Securities" and the firm or firms which agree to purchase the same are
hereinafter referred to as the "Underwriters" of such Purchased Securities and
the representative or representatives of the Underwriters, if any, specified
in a "Terms Agreement" are hereinafter referred to as the "Representatives";
provided, however, that if the Terms Agreement does not specify any
representative of the Underwriters, the term "Representatives" as used in this
Agreement shall mean the Underwriters. The terms and conditions herein shall
constitute a separate agreement between the Issuers and the respective
Underwriters in regard to each offering of Purchased Securities.
This Agreement shall not limit or affect the rights of the Issuers to offer
or sell any of the Securities through any other underwriters or agents or
through any other arrangements specified by the Company from time to time, and
this Agreement shall apply only to Securities in respect of which a Terms
Agreement shall have been executed as referred to herein.
This is to confirm the agreement concerning the purchase of the Securities
from the Issuers by the Underwriters.
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1. REPRESENTATIONS AND WARRANTIES. Each of the Trust and the Company,
jointly and severally, represents and warrants to, and agrees with, each
Underwriter that:
(a) A registration statement on Form S-3 (File No. 333- ), prepared
by the Issuers in conformity with the requirements of the Securities Act of
1933, as amended, and the rules and regulations promulgated thereunder
(collectively, the "Securities Act"), has been filed with the Securities
and Exchange Commission (the "Commission") and has become effective for the
registration under the Securities Act of the Securities. Copies of such
registration statement and any amendments thereto, and all forms of the
related prospectuses relating to the Securities contained therein, have
been delivered to each Underwriter. Such registration statement, including
the documents incorporated by reference therein and all financial schedules
and exhibits thereto, as amended at the date of any Terms Agreement, is
herein referred to as the "Registration Statement". As used in this
Agreement, the term "Prospectus" means such prospectus included in the
Registration Statement, supplemented by a Prospectus Supplement as
contemplated by Section 2 hereof to reflect the terms of the Purchased
Securities and the plan of distribution thereof. Any reference herein to
the Registration Statement 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 under the Securities Act, as of the date of the
Prospectus, and any reference herein to the terms "amend", "amendment" or
"supplement" with respect to any Prospectus shall be deemed to refer to and
include any documents filed with the Commission after such date under the
Securities Exchange Act of 1934, as amended, and the rules and regulations
of the Commission promulgated thereunder (collectively, the "Exchange
Act"), and so incorporated by reference (all such incorporated documents
being herein called the "Incorporated Documents").
(b) As of the date of any Terms Agreement, when the Prospectus is first
filed pursuant to Rule 424(b) under the Securities Act and when, prior to
the Closing Date (as defined in Section 2 hereof), any amendment to the
Registration Statement becomes effective (including the filing of any
document incorporated by reference in the Registration Statement) and at
the Closing Date, the Registration Statement and the Prospectus, as amended
or supplemented, shall comply in all material respects with the
requirements of the Securities Act. No such document shall contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading, except that the foregoing shall not apply to statements in
or omissions from any such document in reliance upon and in conformity with
written information furnished to the Issuers by any Underwriter
specifically for use in the preparation thereof. There is no contract or
document required to be described in the Registration Statement or the
Prospectus or required to be filed as an exhibit to the Registration
Statement that is not described or filed as required.
(c) Deloitte & Touche LLP, whose report is incorporated by reference in
the Prospectus, are independent certified public accountants as required by
the Securities Act. The financial statements and schedules (including the
related notes) included or incorporated by reference in the Registration
Statement and the Prospectus present fairly, in all material respects, the
financial condition, the results of operations and the cash flows of the
entities purported to be shown thereby at the dates and for the periods
indicated and have been prepared in accordance with generally accepted
accounting principles.
(d) The Incorporated Documents, when they were filed with the Commission,
complied in all material respects with the requirements of the Exchange
Act, and any documents so filed and incorporated by reference subsequent to
the date of the Prospectus shall, when they are filed with the Commission,
conform in all material respects to the requirements of the Exchange Act.
(e) Each of the Company and its Subsidiaries has been duly organized and
is validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, with full power and authority (corporate
and other) to own or lease its properties and conduct its business as
described in the Prospectus, and is duly qualified to do business and is in
good standing in each jurisdiction in which the character of the business
conducted by it or the location of the properties owned or leased by it
makes such qualification necessary, except where the failure to so qualify
would not have a material adverse effect on the Company and its
Subsidiaries taken as a whole.
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(f) The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Act; all filings required
under the laws of the State of Delaware with respect to the creation and
valid existence of the Trust as a business trust have been made under the
Delaware Act and the Amended and Restated Declaration of Trust (the
"Declaration"), the Trust has the business trust power and authority to (x)
own property or lease its properties and conduct its business as described
in the Prospectus, (y) enter into and perform its obligations under this
Agreement, and (z) issue and perform its obligations under the Securities
and is not required to be authorized to do business in any other
jurisdiction; the Trust is not a party to or otherwise bound by any
agreement other than those described in the Prospectus, the Trust does not
have any consolidated or unconsolidated subsidiaries; and the Trust is and
will be treated as a consolidated subsidiary of the Company pursuant to
generally accepted accounting principles.
(g) The Declaration has been duly and validly authorized by the Company
and, when executed and delivered by the Company and the Trustees (as such
term is defined in the Declaration) at the Closing Date, and assuming due
authorization, execution and delivery thereof by the Trustees, will be the
valid and binding obligation of the Company and the Trustees, enforceable
against the Company and the Trustees in accordance with its terms, subject
as to enforcement to bankruptcy, insolvency, reorganization, moratorium and
other laws of general applicability relating to or affecting creditors'
rights and to general equity principles (regardless of whether the issue of
enforceability is considered in a proceeding at law or in equity), and, at
the Closing Date, the Declaration will have been duly qualified under the
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act").
(h) All of the outstanding capital stock or other equity securities of
each of the Subsidiaries of the Company have been duly and validly
authorized and issued, are fully paid and nonassessable, and are owned by
the Company free and clear of any mortgage, pledge (other than any negative
pledge agreement to which the Company or any of its Subsidiaries may be a
party), security interest or restrictions on transferability or voting. The
Trust has no Subsidiaries.
(i) Since the date of the latest consolidated financial statements of the
Company and its subsidiaries included in the Registration Statement and the
Prospectus, there has not been any change in the Company's issued capital
stock or options, except (I) as set forth in or expressly contemplated by
the Registration Statement and the Prospectus, (II) pursuant to the
exercise of options or the conversion, exchange or exercise of outstanding
convertible, exchangeable or exercisable securities of the Company and
(III) issuances of shares of Common Stock and options to acquire Common
Stock issued after the date of such financial statements pursuant to the
Company's employee benefit plans as in effect on the date hereof. Except as
described in or contemplated by the Prospectus, there has not been any
material adverse change in, or any adverse development which materially
affects, the condition (financial or other), results of operation,
business, prospects, net worth or assets of the Company and its
Subsidiaries taken as a whole or of the Trust, from the date as of which
information is given in the Prospectus.
(j) Neither of the Issuers nor any of the Company's Subsidiaries is, nor
with the giving of notice or lapse of time or both would be, in violation
of or in default under, nor will the execution or delivery hereof or
consummation of the transactions contemplated hereby result in a violation
of, or constitute a default under, its certificate of incorporation,
certificate of trust, by-laws, Declaration or other governing documents, as
the case may be, or any agreement, indenture or other instrument to which
either Issuer or any of the Company's Subsidiaries is a party or by which
any of them is bound, or to which any of their properties is subject where
the effect of such violation or default would have a material adverse
effect on the Company and its Subsidiaries taken as a whole or of the
Trust.
(k) The execution and delivery of this Agreement, the applicable Terms
Agreement, the authorization, issuance and sale of the Purchased
Securities, the fulfillment of this Agreement, the applicable Terms
Agreement, the Purchased Securities, the Guarantees, the Guarantee
Agreement, the Indenture between the Company and The Bank of New York, as
trustee (the "Indenture"), the Supplemental Indenture between the Company
and The Bank of New York, as trustee (the "Supplemental Indenture"), the
Subordinated Debt Securities and any Delayed Delivery Contract and the
consummation of the transactions contemplated by each such agreement will
not conflict with or constitute a breach of, or default (with the passage
of time
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or otherwise) under, or result in the imposition of a lien on any
properties of the Issuers or any of the Company's Subsidiaries or an
acceleration of indebtedness pursuant to, the certificate of incorporation,
certificate of trust, by-laws, Declaration or other governing documents, as
the case may be, of the Issuers or any of the Company's Subsidiaries, or
any bond, debenture, note or any other evidence of indebtedness or any
indenture, mortgage, deed or trust or any other material agreement or
instrument to which either of the Issuers or any of the Company's
Subsidiaries is a party or by which any of them is bound or to which any of
the property or assets of the Issuers or any of the Company's Subsidiaries
is subject, or any law, administrative regulation or order of any court or
governmental agency or authority applicable to the Issuers or any of the
Company's Subsidiaries.
(l) Except for the orders of the Commission declaring the Registration
Statement effective under the Securities Act and permits and similar
authorizations required under the securities or Blue Sky laws of certain
jurisdictions, no consent, approval, authorization or order of any court,
governmental agency or body or financial institution is required in
connection with the issuance and sale of the Securities or the purchase by
the Trust of the Subordinated Debt Securities or the consummation of the
transactions contemplated by this Agreement, the applicable Terms
Agreement, the Indenture, the Supplemental Indenture, the Guarantee
Agreement or the Guarantee.
(m) Under the Delaware Act and the Declaration, the execution and
delivery by the Trust of this Agreement and the Terms Agreement, and the
performance by the Trust of its obligations thereunder, have been duly
authorized by all necessary business trust action on the part of the Trust,
and this Agreement and the Terms Agreement will have been, duly executed
and delivered by the Trust under the law of Delaware and each constitutes
the legal, valid and binding obligations of the Trust.
(n) The Common Securities have been duly authorized by the Original
Declaration (as defined in the Declaration) and, when issued and delivered
by the Trust to the Company against payment therefor in accordance with the
Declaration, will be validly issued and fully paid and nonassessable
undivided beneficial interests in the assets of the Trust; and under the
Delaware Act and the Declaration, the issuance of the Common Securities
will not be subject to preemptive rights.
(o) This Agreement and the applicable Terms Agreement have been duly
authorized, executed and delivered by the Company and each constitutes the
legal, valid and binding obligation of the Company.
(p) As of the date of the "Capitalization" table set forth in the
Prospectus Supplement, the Company had the authorized, issued and
outstanding capitalization set forth thereunder. The authorized capital
stock of the Company conforms as to legal matters to the description
thereof contained in the Registration Statement and the Prospectus, and all
of the outstanding shares of capital stock of the Company have been duly
authorized and validly issued, are fully paid and non-assessable and are
not subject to any preemptive or similar rights.
(q) The Preferred Securities have been duly authorized by the Original
Declaration and the Company for issuance and sale to the Underwriters
pursuant to this Agreement and Terms Agreement and, when issued and
delivered by the Trust in accordance with the Declaration to the
Underwriters and paid for in accordance with this Agreement and the Terms
Agreement, will be validly issued and fully paid and nonassessable
undivided beneficial interests in the assets of the Trust; the holders of
the Securities, as beneficial owners of the Trust, will be entitled to the
same limitation of personal liability as that extended to stockholders of
private corporations for profit organized under the General Corporation Law
of the State of Delaware; under the Delaware Act and the Declaration, the
issuance of the Securities will not be subject to preemptive rights; and
the Securities conform to the description thereof in the Prospectus.
(r) The Delayed Delivery Contracts, if any, have been duly authorized and
when executed and delivered by the Issuers will be the legal, valid and
binding agreements of the Issuers enforceable in accordance with their
terms, except that (i) the enforceability thereof may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights generally and (ii)
the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion
of the court before which any proceedings therefor may be brought.
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(s) Subsequent to the respective dates as of which information is given
in the Registration Statement and Prospectus and prior to the Closing Date,
neither of the Issuers nor any of the Company's Subsidiaries has incurred
or will have incurred any liabilities or obligations for borrowed money,
direct or contingent, or entered into any transactions, not in the ordinary
course of business and material to the business of the Company and its
Subsidiaries taken as a whole, and there has not been and will not have
been any material change in the capital stock or long-term indebtedness of
either of the Issuers or any of the Company's Subsidiaries, or any material
adverse change in the business, prospects, financial position, net worth or
assets or results of operations of the Company and its Subsidiaries taken
as a whole or of the Trust.
(t) The Company and its Subsidiaries have such interests in their
respective real (including leasehold interests) and personal properties
that they reasonably believe are necessary, in the aggregate, to use such
properties in the manner presently used or proposed to be used by the
Company and its Subsidiaries.
(u) Except as described in the Prospectus, there is no litigation or
governmental proceeding to which either of the Issuers or any of the
Company's Subsidiaries is a party or to which any property of any of them
is subject or which is pending or, to the knowledge of the Issuers,
contemplated against either of the Issuers or any of the Company's
Subsidiaries which might result in any material adverse change in the
condition (financial or other), results of operations, business, prospects,
net worth or assets of the Company and its Subsidiaries taken as a whole or
of the Trust.
(v) Neither of the Issuers nor any of the Company's Subsidiaries is in
violation of any law, ordinance, governmental rule or regulation or court
decree to which it may be subject which violation might have a material
adverse effect on the condition (financial or other), results of
operations, business, prospects, net worth or assets of the Company and its
Subsidiaries taken as a whole or of the Trust.
(w) The conditions for use of Form S-3, set forth in the General
Instructions thereto, have been satisfied.
(x) At the Closing Date, the Property Trustee will be the record holder
of Subordinated Debt Securities and no security interest, mortgage, pledge,
lien, encumbrance, claim or equity will be noted thereon or on the
register.
(y) The Guarantees and the Guarantee Agreement have each been duly and
validly authorized by the Company and, when executed and delivered by the
Company at the Closing Date, will constitute valid and legally binding
agreements of the Company enforceable in accordance with their terms,
subject as to enforcement to bankruptcy, insolvency, reorganization,
moratorium and other similar laws now or hereafter in effect relating to
creditors' rights generally and the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceedings
therefor may be brought; at the Closing Date, the Guarantees and the
Guarantee Agreement will have been duly qualified under the Trust Indenture
Act; and the Guarantees conform to the descriptions thereof contained in
the Prospectus.
(z) The Indenture has been duly and validly authorized by the Company
and, when executed and delivered by the Company at the Closing Date and,
assuming due authorization, execution and delivery by the Debt Trustee, at
such Closing Date will constitute a valid and legally binding agreement of
the Company enforceable in accordance with its terms, subject as to
enforcement to bankruptcy, insolvency, reorganization, moratorium and other
similar laws now or hereafter in effect relating to creditors' rights
generally and the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceedings therefor may be
brought; and at the Closing Date, the Indenture will have been duly
qualified under the Trust Indenture Act.
(aa) The Supplemental Indenture has been duly and validly authorized by
the Company and, when executed and delivered by the Company at the Closing
Date and, assuming due authorization, execution and delivery by the Debt
Trustee, at such Closing Date will constitute a valid and legally binding
agreement of the Company enforceable in accordance with its terms, subject
as to enforcement to bankruptcy, insolvency, reorganization, moratorium and
other similar laws now or hereafter in effect relating to
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creditors' rights generally and the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceedings
therefor may be brought; and at the Closing Date, the Supplemental
Indenture will have been duly qualified under the Trust Indenture Act.
(bb) The Subordinated Debt Securities have been duly and validly
authorized by the Company and, when executed and authenticated in
accordance with the terms of the Indenture and delivered to and paid for by
the Trust in accordance with the Declaration, will constitute valid and
legally binding obligations of the Company enforceable in accordance with
their terms, subject as to enforcement to bankruptcy, insolvency,
reorganization, moratorium and other similar laws now or hereafter in
effect relating to or affecting creditors' rights generally and the remedy
of specific performance and injunctive and other forms of equitable relief
may be subject to equitable defenses and to the discretion of the court
before which any proceedings therefor may be brought; and the Subordinated
Debt Securities conform to the description thereof contained in the
Prospectus.
(cc) The statements set forth in the Prospectus under the caption
"Certain Federal Income Tax Consequences," insofar as they purport to
describe the provisions of the law referred to therein, are accurate and
complete in all material respects.
(dd) The Trust will be classified as a "grantor trust" for United States
federal income tax purposes and is not an will not be classified as an
association taxable as a partnership or a corporation for United States
federal income tax purposes under federal income tax laws as currently in
effect.
(ee) Neither the Trust nor the Company is, nor upon consummation of the
offering of the Securities and the application of the proceeds therefrom as
described in the Prospectus will be, an "investment company" within the
meaning of the Investment Company Act of 1940, as amended, and neither the
Trust nor the Company is subject to regulation under such Act.
2. PURCHASE AND OFFERING.
(a) The obligations of the Underwriters to purchase the Purchased
Securities will be evidenced by an exchange of telegraphic or other written
communications substantially in the form attached as Exhibit A hereto (a
"Terms Agreement") at each time the Issuers determine to sell Purchased
Securities, with such other provisions which the Representatives and the
Issuers shall agree upon. Each Terms Agreement shall specify the firms
which will be Underwriters (who shall become bound by the terms hereof when
the Terms Agreement has been entered into), the principal amount to be
purchased by each Underwriter, the purchase price to be paid by the
Underwriters and the terms of the Purchased Securities, including, but not
limited to, distribution rates, maturities, redemption provisions and
sinking fund requirements. Each Terms Agreement shall also specify the date
of delivery and payment for the Purchased Securities other than any
Contract Securities (as defined below) and any details of the terms of
offering which should be reflected in the Prospectus Supplement relating to
the offering of the Purchased Securities. Such Prospectus Supplement shall
set forth the terms contained in the Terms Agreement and such other
information that you and the Issuers agree at the time the Terms Agreement
is entered into should be included in the Prospectus Supplement. Insofar as
any provision of this Agreement is inconsistent with any provision of the
applicable Terms Agreement, the Terms Agreement shall be deemed to control.
Purchased Securities to be purchased by Underwriters are herein referred to
as "Underwriters' Securities", and any Purchased Securities to be purchased
pursuant to Delayed Delivery Contracts as hereinafter provided are herein
referred to as "Contract Securities". The obligations of the Underwriters
to purchase the Underwriters' Securities shall be several and not joint. It
is understood that the Underwriters propose to offer the Purchased
Securities for sale as set forth in such Prospectus Supplement.
(b) Payment of the purchase price (the "Purchase Price") for the
Purchased Securities, as set forth in the Terms Agreement, shall be made to
the order of the Trust in immediately available (same day) funds against
delivery to the nominee of The Depository Trust Company for the accounts of
the Underwriters or such other persons designated in writing by the
Underwriters of one or more global securities representing the Purchased
Securities (the "Global Security"), with any transfer taxes payable in
connection with the
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transfer to the Underwriters paid by the Company. Each applicable Global
Security will be made available for inspection by the Underwriters at the
office of the Underwriters at the address set forth above, or at such other
location as the Company and the Underwriters agree, not later than 1:00
P.M., New York City time, on the Business Day prior to the Closing Date. In
view of the fact that the proceeds of the sale of the Purchased Securities
will be used to purchase Subordinated Debt Securities, the Company agrees
to pay compensation ("Underwriters' Compensation") to the Underwriters for
arranging the investment therein of such proceeds in an amount in
immediately available (same day) funds per Purchased Security as set forth
in the applicable Term Agreement.
(c) If any Terms Agreement provides for sales of Purchased Securities
pursuant to Delayed Delivery Contracts, the Trust authorizes the
Underwriters to solicit offers to purchase Contract Securities pursuant to
Delayed Delivery Contracts substantially in a form agreed to between the
Trust and you (the "Delayed Delivery Contracts") with such changes therein
as the Trust may approve. Delayed Delivery Contracts are to be with
institutional investors, including commercial and savings banks, insurance
companies, pension funds, investment companies and educational and
charitable institutions. At the time of purchase the Trust will pay you as
compensation, for the accounts of the Underwriters, the compensation set
forth in such Terms Agreement in respect of the principal amount of
Contract Securities. The Underwriters will not have any responsibility in
respect of the validity or the performance of Delayed Delivery Contracts.
If the Trust
executes and delivers Delayed Delivery Contracts, the Contract Securities
shall be deducted from the Purchased Securities to be purchased by the
several Underwriters and the aggregate principal amount of Purchased
Securities to be purchased by each Underwriter shall be reduced pro rata in
proportion to the principal amount of Purchased Securities set forth
opposite each Underwriter's name in such Terms Agreement, except to the
extent that you determine that such reduction shall be otherwise allocated
and so advise the Trust.
3. COVENANTS. Each of the Issuers covenants and agrees with each Underwriter
that it will furnish to counsel for the Underwriters, without charge, one
signed copy of the Registration Statement, including all exhibits, in the form
it became effective and of all amendments thereto and that, in connection with
each offering of Securities:
(a) The Issuers shall notify you promptly of any request by the
Commission for any amendment of or supplement to the Registration Statement
or the Prospectus, or for additional information; the Issuers shall prepare
and file with the Commission, promptly upon your request, any amendments of
or supplements to the Registration Statement or the Prospectus which, in
your opinion after consultation with the Issuers, may be necessary or
advisable in connection with the distribution of the Securities and the
Issuers shall not file any amendment or supplement to the Registration
Statement or the Prospectus or file any document under the Exchange Act
before the termination of the offering of the Securities if such document
would be deemed to be incorporated by reference therein which is not
approved by you after reasonable notice thereof, such approval not to be
unreasonably withheld or delayed. The Issuers shall notify you promptly of
the filing with the Commission of the Prospectus supplemented by the
Prospectus Supplement relating to the Purchased Securities. The Issuers
shall advise you promptly of the issuance by the Commission or any State or
other regulatory body of any stop order or other order suspending the
effectiveness of the Registration Statement, suspending or preventing the
use of the Prospectus, or suspending the qualification of the Securities
for offering or sale in any jurisdiction, or of the institution of any
proceedings for any such purpose; and the Issuers shall use their best
efforts to prevent the issuance of any stop order or other such order and,
should a stop order or other such order be issued, to obtain as soon as
possible the lifting thereof.
(b) The Issuers shall furnish to you, from time to time and without
charge, copies of the Registration Statement of which each Representative
shall receive a conformed copy and which shall include exhibits and all
amendments and supplements to any of such documents (including any
Incorporated Documents), in each case as soon as available and in such
quantities as you may from time to time reasonably request.
(c) If any event occurs as a result of which the Prospectus as then
amended or supplemented would include an untrue statement of a material
fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or if it is
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necessary to amend the Registration Statement or supplement the Prospectus
to comply with the Securities Act, the Issuers shall promptly notify you
and shall amend the Registration Statement or supplement the Prospectus or
file such document (at the expense of the Company) so as to correct such
statement or omission or effect such compliance.
(d) The Issuers shall take or cause to be taken all necessary action and
furnish to whomever you may direct such information as may be required in
qualifying the Purchased Securities for sale under the laws of such
jurisdictions as the Representative shall designate and to continue such
qualifications in effect for as long as may be necessary for the
distribution of the Purchased Securities; except that in no event shall the
Issuers be obligated in connection therewith to qualify as a foreign
corporation, or to execute a general consent for service of process.
(e) The Issuers shall make generally available to holders of the
Purchased Securities, in the manner contemplated by Rule 158(b) under the
Securities Act or otherwise, as soon as practicable after the date of the
applicable Terms Agreement, but in any event not later than 45 days after
the end of its fiscal quarter in which the first anniversary date of the
date of the Terms Agreement occurs (or 90 days if such fiscal quarter is
the last fiscal quarter of its fiscal year), an earnings statement
satisfying the requirements of Section 11(a) of the Securities Act and
covering a period of at least 12 consecutive months beginning after the
effective date of the Registration Statement.
(f) The Trust shall apply the net proceeds of the sale of Purchased
Securities as set forth in the Prospectus.
(g) Whether or not this Agreement becomes effective or is terminated or
the sale of the Purchased Securities to you is consummated, the Company
shall pay or cause to be paid (A) all expenses (including transfer taxes)
incurred in connection with the delivery to the Underwriters of the
Purchased Securities, (B) all fees and expenses (including, without
limitation, fees and expenses of the Issuers' accountants and counsel, but
excluding fees and expenses of counsel to the Underwriters except as set
forth in (C)) in connection with the preparation, printing, filing,
delivery and shipping of the Registration Statement (including the
financial statements therein and all amendments and exhibits thereto) and
the Prospectus as amended or supplemented, and the printing, delivery and
shipping of this Agreement, any Terms Agreement, any agreement among or
between Underwriters and other underwriting documents, including the Blue
Sky Survey and any legal investment survey, (C) all filing fees and fees
and disbursements of counsel to the Underwriters incurred in connection
with the qualification of the Purchased Securities under state securities
laws as provided in Section 3(d) hereof, (D) the filing fee of the National
Association of Securities Dealers, Inc., if any, (E) any applicable listing
fees, (F) the cost of printing the certificates representing the Purchased
Securities, (G) any fees payable to rating agencies in connection with the
rating of the Purchased Securities and (H) all other costs and expenses
incident to the performance of its obligations hereunder which are not
otherwise provided for in this Section. It is understood however, that,
except as provided in this Section 3(g), Section 5 and Section 6 hereof,
each of the Underwriters shall pay all of its own costs and expenses
including the fees of its counsel (except as set forth in (C) above) and
any advertising expenses connected with any offers it may make. If the sale
of the Purchased Securities provided for herein is not consummated by
reason or acts of either of the Issuers pursuant to Section 6 hereof which
prevent this Agreement or any Terms Agreement from becoming effective, or
by reason of any failure, refusal or inability on the part of the Issuers
to perform any agreement on its part to be performed or because any other
condition of the Underwriters' obligations hereunder is not fulfilled, the
Issuers shall reimburse each of the Underwriters for all reasonable out-of-
pocket disbursements (including fees and disbursements of counsel) incurred
by the Underwriters in connection with your investigation of or any
preparation by them in respect of marketing the Purchased Securities or in
contemplation of performing their respective obligations hereunder.
(h) Prior to the Closing Date, the Company, at your request, shall
furnish to you as soon as they have been prepared by the Company a copy of
any unaudited interim consolidated financial statements of the Company and
its Subsidiaries for any period subsequent to the period covered by the
financial statements appearing in the Registration Statement and the
Prospectus.
8
(i) To use its best efforts to effect the listing of the Purchased
Securities on the New York Stock Exchange on the date of the Terms
Agreement.
(j) During a period of 30 days from the date of a Terms Agreement,
neither Issuer will, without the prior written consent of the
Representatives, directly or indirectly, sell, offer to sell, contract to
sell, grant any option for the sale of, or otherwise dispose of, any
Preferred Securities or any Subordinated Debt Securities, any security
convertible into or exchangeable into or exercisable for Preferred
Securities or any Subordinated Debt Securities or any debt securities
substantially similar to the Subordinated Debt Securities or any equity
securities substantially similar to the Trust Preferred Securities (except
for the Purchased Securities and Subordinated Debt Securities being issued
to the Trust).
4. CONDITIONS OF YOUR OBLIGATIONS. Your obligations are subject to the
accuracy, as of the date hereof and the Closing Date (as if made at such
Closing Date), of the representations and warranties of the Issuers contained
herein, to the performance by the Issuers of their respective obligations
hereunder and to the following additional conditions:
(a) The Issuers shall have filed with the Commission on a timely basis
pursuant to Rule 424(b) under the Securities Act the Prospectus as
supplemented by the Prospectus Supplement covering the Purchased
Securities. No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall
be pending, threatened or contemplated by the Commission or any state
securities or Blue Sky authority.
(b) You shall not have advised the Issuers that the Registration
Statement, any Prospectus, or any amendment or supplement thereto, contains
an untrue statement of fact which, in your opinion, is material or omits to
state a fact which, in your opinion, is material and is required to be
stated therein or is necessary to make the statements therein not
misleading.
(c) You shall have received an opinion of Xxxxxx X. X'Xxxxx, Esq., Senior
Vice President and Secretary of the Company, dated the Closing Date, to the
effect that:
(i) each of the Company and its Subsidiaries has been duly
incorporated and is a validly existing corporation in good standing
under the laws of its respective jurisdiction of incorporation with
full corporate power and authority to own and occupy its properties and
carry on its business as presently conducted and as described in the
Prospectus, and the Company and each of its Subsidiaries is registered
or qualified to conduct business and is in good standing in each
jurisdiction in which, to the best of such counsel's knowledge, their
failure to so register or qualify would have a material adverse effect
on the Company and its Subsidiaries taken as a whole; all of the
outstanding capital stock or other equity securities of each of the
Subsidiaries of the Company have been duly and validly authorized and
issued, are fully paid and nonassessable, and are owned by the Company
free and clear of any mortgage, pledge (other than any negative pledge
agreement to which the Company or any of its Subsidiaries may be a
party), security interest or restrictions on transferability or voting;
(ii) this Agreement, the Terms Agreement, the Indenture, the
Supplemental Indenture, the Guarantee Agreement, the Guarantees and the
Declaration have been duly authorized, executed and delivered by each
of the Issuers, and this Agreement, the Terms Agreement, the Indenture,
the Supplemental Indenture, the Guarantee Agreement, the Guarantees and
the Declaration are each legal, valid and binding agreements of each of
the Issuers (to the extent it is a party thereto) enforceable in
accordance with their respective terms, except that (a) the
enforceability hereof and thereof may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally, (b) the
remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceedings therefor may be
brought and (c) rights to indemnity and contribution hereunder may be
limited by Federal and state securities laws or the policies underlying
such laws;
9
(iii) each of the Guarantee Agreement, the Guarantees, the Indenture,
the Supplemental Indenture and the Declaration has been duly qualified
under, and complies in all material respects with the requirements of,
the Trust Indenture Act.
(iv) the Subordinated Debt Securities, when executed and
authenticated in accordance with the terms of the Indenture and
delivered to and paid for by the Trust at the Closing Date, will be
legal, valid and binding obligations of the Company entitled to the
benefits of the Indenture and enforceable in accordance with their
terms, except (A) as such enforceability may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium and other
similar laws affecting creditors' rights generally, (B) the remedy of
specific performance and injunctive and other forms of equitable relief
are subject to certain equitable defenses and to the discretion of the
court before which any proceeding therefor may be brought and (C)
rights to indemnity and contribution hereunder may be limited by
Federal and state security laws or policy underlying such laws.
(v) the Delayed Delivery Contracts, if any, have been duly
authorized, executed and delivered by each of the Issuers and (assuming
that they have been duly authorized, executed and delivered by the
purchasers thereunder) are valid and binding agreements of each of the
Issuers;
(vi) to the best knowledge of such counsel, there are no legal or
governmental proceedings pending or threatened to which either of the
Issuers or any of the Company's Subsidiaries is a party, or of which
the business or properties of either of the Issuers or any of the
Company's Subsidiaries is the subject, which are required to be
disclosed in the Registration Statement and the Prospectus and are not
so disclosed, and there is no contract or document concerning either of
the Issuers or any of the Company's Subsidiaries of a character
required to be described in the Prospectus or to be filed as an exhibit
to the Registration Statement which is not described or filed as
required;
(vii) the execution and delivery of this Agreement, the Terms
Agreement, the Indenture, the Supplemental Indenture, the Guarantee
Agreement, the Guarantees and any Delayed Delivery Contract, the
authorization, issuance and sale of the Purchased Securities, the
Subordinated Debt Securities, the fulfillment of the terms of this
Agreement, the Terms Agreement, the Indenture, the Supplemental
Indenture, the Guarantee Agreement, the Guarantees and any Delayed
Delivery Contract, and the consummation of the transactions
contemplated by this Agreement, the Terms Agreement, the Indenture, the
Supplemental Indenture, the Guarantee Agreement, the Guarantees and any
Delayed Delivery Contract, will not conflict with or constitute a
breach of, or default (with the passage of time or otherwise) under, or
result in the imposition of a lien on any properties of either of the
Issuers or any of the Company's Subsidiaries or an acceleration of
indebtedness pursuant to, the certificate of incorporation, certificate
of trust and by-laws, Declaration or other equivalent instruments, as
the case may be, of the Issuers or any of the Company's Subsidiaries
or, to the best of such counsel's knowledge, any bond, debenture, note
or any other evidence of indebtedness or any indenture, mortgage, deed
of trust, or any other material agreement or instrument to which either
of the Issuers or any of the Company's Subsidiaries is subject where
such breach or default would have a material adverse effect on the
Company and its Subsidiaries taken as a whole or on the Trust, or any
law, administrative regulation or court or governmental agency or
authority ruling or decree known to such counsel to be applicable to
either of the Issuers or any of the Company's Subsidiaries or any of
their respective properties or assets; and all legally required
proceedings in connection with the authorization, issuance and sale of
the Purchased Securities in accordance with the terms of this
Agreement, the Terms Agreement, the Indenture and the Guarantees have
been taken and, except for permits and similar authorizations required
under the securities or Blue Sky laws of certain jurisdictions (as to
which such counsel need express no opinion), all consents, approvals,
authorizations or other orders of any regulatory body, administrative
agency or other governmental body legally required for the valid
issuance and sale of the Purchased Securities or any transactions
contemplated hereunder;
10
(viii) the Purchased Securities have been duly authorized and, when
executed and authenticated in accordance with the terms of the Terms
Agreement and delivered to, and paid for by, you will be validly issued
and fully paid and non-assessable; any Contract Securities have been
duly authorized and, when executed and authenticated in accordance with
the terms of the Terms Agreement and when issued and delivered against
payment as provided in the Delayed Delivery Contracts, will be validly
issued and fully paid and non-assessable terms;
(ix) (a) the Trust and the Company jointly meet the requirements for
use of Form S-3 under the Securities Act, and (b) the Registration
Statement has become effective under the Securities Act, and, to the
best knowledge of such counsel, 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
contemplated;
(x) the number of authorized shares of capital stock of the Company
is as set forth in the Prospectus under "Capitalization" and the
authorized capital stock of the Company conforms as to legal matters to
the description thereof contained in the Prospectus;
(xi) the Purchased Securities, the Delayed Delivery Contracts (if
any), the Indenture, the Supplemental Indenture, the Guarantee
Agreement, the Guarantees, the Declaration and the Subordinated Debt
Securities each conform in all material respects to the descriptions
thereof in the Prospectus;
(xii) neither the Company nor the Trust is, nor upon consummation of
the offering of the Securities and the application of the proceeds
therefrom as described in the Prospectus will be, an "investment
company" within the meaning of Section 3(a) of the Investment Company
Act of 1940, as amended, and is not subject to regulation under such
Act;
(xiii) except as to financial statements and schedules and other
financial or statistical data included therein, and the exhibits
thereto, as to which such counsel need not express any opinion, (a) the
Registration Statement and the Prospectus and any supplements or
amendments thereto comply as to form in all material respects with the
Securities Act and (b) the Incorporated Documents comply as to form in
all material respects with the requirements of the Exchange Act and, to
the best knowledge of such counsel, no such Incorporated Document
contains an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; and
(xiv) the issuance of the Purchased Securities is not subject to
preemptive rights arising by operation of law or under the charter or
by-laws of the Company or under the Declaration; and no holder of the
Securities will be subject to personal liability solely by reason of
being such a holder.
In addition, such counsel shall state that such counsel has participated
in conferences with officers and other representatives of the Issuers,
representatives of the independent public accountants for the Issuers,
special Delaware counsel to the Issuers and representatives of the
Underwriters at which conferences the contents of the Registration
Statement and the Prospectus and related matters were discussed. Given the
character of determinations involved in the preparation of the Registration
Statement and the Prospectus, such counsel may state that he is not passing
upon and does not assume any responsibility for the accuracy, completeness
or fairness of the statements contained in the Registration Statement or
the Prospectus and has made no independent check or verification thereof.
Subject to the foregoing, such counsel shall state that no facts have come
to such counsel's attention that would cause such counsel to believe that
the Registration Statement or any amendment thereto, at the time the
Registration Statement or any such amendment became effective, contained an
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading or that the Prospectus or any amendment or supplement
thereto, at the time the Prospectus was issued, at the time any such
amended or supplemented prospectus was issued or at the Closing Date,
included or includes an untrue statement of a material fact or omitted or
omits to state a material fact necessary in order to make the
11
statements therein, in the light of the circumstances under which they were
made, not misleading (it being understood that such counsel need express no
comment with respect to the financial statements, including the notes
thereto, or any other financial or statistical data found in or derived
from the internal accounting and other records of the Company and its
Subsidiaries set forth or referred to in the Registration Statement or the
Prospectus).
(d) You shall have received an opinion of Xxxxxx Xxxxxx & Xxxxxxx, your
counsel, dated the Closing Date, to the effect set forth in clauses (ii),
(iii), (iv), (v), (viii), (ix)(b), (xi) and (xiii)(a) (except with respect
to the Incorporated Documents) of Section 4(c) hereof. Such opinion shall
additionally state that the statements set forth in the Prospectus under
the caption "Certain Federal Income Tax Consequences," insofar as they
relate to matters of law or legal conclusions, are accurate and complete in
all material respects. In addition, such counsel shall state that such
counsel has participated in conferences with officers and other
representatives of the Issuers, counsel for the Issuers, representatives of
the independent public accountants for the Company and your representatives
at which the contents of the Registration Statement and Prospectus and
related matters were discussed and, although such counsel is not passing
upon and does not assume any responsibility for the accuracy, completeness
or fairness of the statements contained in the Registration Statement and
Prospectus (except to the extent provided in paragraph (xi) of Section 4(c)
hereof), on the basis of the foregoing (relying as to materiality to a
large extent upon the opinions of officers and other representatives of the
Issuers), no facts have come to the attention of such counsel that lead
them to believe that either the Registration Statement or any amendment
thereto at the time such Registration Statement or amendment became
effective contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading or that the Prospectus as of its date
or any supplement thereto as of its date contained an untrue statement of a
material fact or omitted 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 (it being understood that such counsel need
express no comment with respect to the financial statements, schedules and
other financial or statistical data included or incorporated by reference
in the Registration Statement or Prospectus or the exhibits to the
Registration Statement).
(e) You shall have received an opinion of Xxxxxxxx, Xxxxxx & Finger,
P.A., special Delaware counsel to the Issuers, dated the Closing Date, to
the effect that:
(i) The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Act, all filings
required under the laws of the State of Delaware with respect to the
creation and valid existence of the Trust as a business trust have been
made; under the Delaware Act and the Declaration, the Trust has the
business trust power and authority to (x) own property and conduct its
business, all as described in the Prospectus, (y) enter into and
perform its obligations under this Agreement and the Terms Agreement,
and (z) issue and perform its obligations under the Securities and the
Common Securities.
(ii) Assuming the Declaration has been duly authorized, executed and
delivered by the Trustees and the Company, the Declaration is the valid
and binding obligation of the Company and the Trustees, enforceable
against the Company and the Trustees in accordance with its terms,
subject as to enforcement to (a) bankruptcy, insolvency, receivership,
reorganization, moratorium, liquidation, fraudulent conveyance and
other similar laws relating to or affecting the rights remedies of
creditors generally, (b) to principles of equity including applicable
law relating to fiduciary duties (regardless of whether the issue of
enforceability is considered in a proceeding at law or in equity) and
(c) the effect of applicable public policy on the enforceability of
provisions relating to indemnification or contribution.
(iii) Under the Delaware Act and the Declaration, the execution and
delivery by the Trust of this Agreement and the Terms Agreement, and
the performance by the Trust of its obligations thereunder, have been
duly authorized by all necessary business trust action on the part of
the Trust.
12
(iv) The Common Securities have been duly authorized by the
Declaration and are validly issued and represent undivided beneficial
interests in the assets of the Trust; and under the Delaware Act and
the Declaration, the issuance of the Common Securities is not subject
to preemptive rights.
(v) The Preferred Securities have been duly authorized by the
Declaration and, when delivered to and paid for pursuant to this
Agreement, will be validly issued and fully paid and nonassessable
undivided beneficial interests in the assets of the Trust; the holders
of the Preferred Securities, as beneficial owners of the Trust, will be
entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the
General Corporation Law of the State of Delaware; and under the
Delaware Act and the Declaration, the issuance of the Preferred
Securities is not subject to preemptive rights. Such counsel may note
that the Preferred Security holders may be obligated, pursuant to the
Declaration, to (i) provide indemnity and/or security in connection
with and pay taxes or governmental charges arising from transfers of
Preferred Security Certificates and the issuance of replacement
Preferred Security Certificates, and (ii) provide security and
indemnity in connection with requests of or directions to the Property
Trustee to exercise its rights and powers under the Declaration.
(vi) The issuance and sale by the Trust of the Preferred Securities
and Common Securities; the execution, delivery and performance by the
Trust of this Agreement and the Terms Agreement; the consummation of
the transactions contemplated herein and therein; and compliance by the
Trust with its obligations hereunder and thereunder will not violate
any of the provisions of the Certificate of Trust or the Declaration,
or any applicable Delaware law or administrative regulation.
(vii) Assuming that the Trust derives no income from or in connection
with sources within the State of Delaware and has no assets, activities
(other than having a Delaware Trustee as required by the Delaware Act
and the filing of documents with the Delaware Secretary of State) or
employees in the State of Delaware, no authorization, approval, consent
or order of any Delaware court or Delaware governmental authority or
Delaware agency is required to be obtained by the Trust solely in
connection with the issuance and sale of the Common Securities and the
Preferred Securities or the purchase by the Trust of the Subordinated
Debt Securities and the Guarantees.
(f) You shall have received an opinion of Xxxxx, Xxxxxx & Xxxxxx, LLP,
counsel to The Bank of New York, as Property Trustee under the Declaration,
dated the Closing Date, to the effect that:
(i) The Bank of New York is a national banking association with trust
powers, duly organized, validly existing and in good standing under the
laws of the United States, with all necessary power and authority to
execute and deliver, and to carry out and perform its obligations under
the terms of, the Declaration.
(ii) The execution, delivery and performance by the Property Trustee
of the Declaration have been duly authorized by all necessary corporate
action on the part of the Property Trustee; the Declaration has been
duly executed and delivered by the Property Trustee and constitutes the
valid and binding obligation of the Property Trustee, enforceable
against the Property Trustee in accordance with its terms, subject as
to enforcement to bankruptcy, insolvency, reorganization, moratorium
and other laws of general applicability relating to or affecting
creditors' rights and to general equity principles (regardless of
whether the issue of enforceability is considered in a proceeding at
law or in equity).
(iii) The execution, delivery and performance of the Declaration by
the Property Trustee does not conflict with or constitute a breach of
the Articles of Organization or Bylaws of the Property Trustee.
(iv) No consent, approval or authorization of, or registration with
or notice to, any New York or federal banking authority is required for
the execution, delivery or performance by the Property Trustee of the
Declaration.
(v) To the best of such counsel's knowledge, based on a review of the
certificates representing the Subordinated Debt Securities, no security
interest, mortgage, pledge, lien, encumbrance, claim or equity is noted
thereon.
13
In giving such opinion, such counsel may rely as to matters governed by
the laws of the State of Delaware on an opinion of Xxxxxxxx Xxxxxx &
Finger, P.A.; provided, however, that such opinion shall be addressed to
the Underwriters, shall be dated as of such date and shall expressly permit
such counsel to rely thereon.
(g) There shall have been furnished to you two certificates, each dated
the Closing Date and addressed to you, (i) one signed by the President or
any Vice President and the Chief Financial Officer, any financial Vice
President or the Treasurer of the Company and (ii) the other signed by any
Regular Trustee of the Trust, each certificate to the effect that: (i) the
representations and warranties of the Company and Trust, as the case may
be, contained in this Agreement are true and correct, as if made at and as
of the Closing Date, and the Company and Trust, as the case may be, 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; (ii) no
stop order suspending the effectiveness of the Registration Statement has
been issued, and no proceedings for that purpose have been initiated or
threatened; (iii) all filings required by Rule 424 of the Securities Act
have been made; (iv) the signers of said certificate have carefully
examined the Registration Statement and the Prospectus, and any amendments
or supplements thereto (including any documents filed under the Exchange
Act and deemed to be incorporated by reference therein), and such documents
contain all statements and information required to be included therein, and
do not include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading; and (v) since the execution of the Terms
Agreement, there has occurred no event required to be set forth in an
amendment or supplement to the Registration Statement or the Prospectus
which has not been so set forth; and there has been no document required to
be filed under the Exchange Act that upon such filing would be deemed to be
incorporated by reference into the Prospectus that has not been so filed.
(h) Since the execution of the Terms Agreement, neither of the Issuers
nor any of the Company's Subsidiaries shall have sustained any loss by
fire, flood, accident or other calamity, or shall have become a party to or
be subject to any litigation, which is material to the Company and its
Subsidiaries taken as a whole or to the Trust, nor shall there have been a
material adverse change in the general affairs, business, key personnel,
capitalization, financial position or net worth of the Company and its
Subsidiaries taken as a whole or of the Trust, whether or not arising in
the ordinary course of business, which loss, litigation or change, in your
judgment, shall render it inadvisable to proceed with the delivery of the
Purchased Securities.
(i) On the date of execution of the Terms Agreement and the Closing Date,
you shall have received a letter of Deloitte & Touche LLP, dated the date
of execution of the Terms Agreement and the Closing Date, as the case may
be, and addressed to you, confirming that they are independent certified
public accountants, within the meaning of the Securities Act, and stating,
as of the date of such letter (or, with respect to matters involving
changes or developments since the respective dates as of which specified
financial information is given or incorporated in the Prospectus, as of a
date not more than five days prior to the date of such letter), the
conclusions and findings of such firm with respect to the financial
information and other matters requested to be covered by its letter
delivered to you concurrently with the execution of the Terms Agreement
and, with respect to the letter delivered on the Closing Date, confirming
the conclusions and findings set forth in such prior letter.
(j) That the Issuers shall have accepted Delayed Delivery Contracts in
any case where sales of Contract Securities arranged by the Underwriters
have been approved by the Issuers.
(k) At the Closing Date, the Securities shall have been approved for
quotation on the New York Stock Exchange and the Trust and the Company
shall have filed all notices and documents required by the New York Stock
Exchange of companies that have securities quoted on such exchange.
(l) You shall have been furnished with such additional documents and
certificates as you may reasonably request.
(m) Since the execution of any Terms Agreement, (i) no downgrading shall
have occurred in the rating assigned to the Company's debt securities by
any "nationally recognized statistical rating organization," as
14
that term is defined by the Commission for purposes of Rule 436(g)(2) under
the Securities Act, and (ii) no such organization shall have publicly
announced that it has under surveillance or review, with possible negative
implications, its rating of any of the Company's debt securities.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are reasonably
satisfactory in form and substance to you and to counsel for the
Underwriters. The Issuers shall furnish to you such conformed copies of
such opinions, certificates, letters and other documents as you shall
reasonably request. If any of the conditions specified in this Section 4
shall not have been fulfilled when and as required by this Agreement, this
Agreement and the applicable Terms Agreement and all obligations of the
Underwriters hereunder and thereunder may be cancelled at, or at any time
prior to, the Closing Date, by you. Any such cancellation shall be without
liability of the Underwriters to the Issuers. Notice of such cancellation
shall be given to the Issuers in writing, or by telegraph or telephone and
confirmed in writing.
5. INDEMNIFICATION AND CONTRIBUTION. (a) Each of the Issuers, jointly and
severally, shall indemnify and hold harmless each of the Underwriters against
any loss, claim, damage or liability to which the Underwriters may become
subject, under the Securities Act or otherwise, insofar as such loss, claim,
damage or liability (or action in respect thereof) arises out of or is based
upon (i) any untrue statement or alleged untrue statement made by the Issuers
in Section 1 hereof, or (ii) any untrue statement or alleged untrue statement
of a material fact contained (A) in the Registration Statement or the
Prospectus or any amendment or supplement thereto, or (B) in any Blue Sky
application or other document executed by either of the Issuers specifically
for the purpose or based upon any written information furnished by either of
the Issuers filed in any state or other jurisdiction in order to qualify any
or all of the Purchased Securities under the securities laws thereof (any such
application, document or information being hereinafter called "Blue Sky
Information"), or (iii) the omission or alleged omission to state in the
Registration Statement or the Prospectus or any amendment or supplement
thereto or in any Blue Sky Information a material fact required to be stated
therein or necessary to make the statements therein not misleading; and shall
reimburse each of the Underwriters for any legal or other reasonable expenses
as incurred by the Underwriters in connection with investigating or defending
against or appearing as a third-party witness in connection with any such
loss, claim, damage, liability or action, notwithstanding the possibility that
payments for such expenses might later be held to be improper, in which case
the person receiving them shall promptly refund them; provided, however, that
the Issuers shall not be liable to an Underwriter in any such case to the
extent, but only to the extent, that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in reliance upon and in conformity with
written information furnished to the Issuers by such Underwriter through
Xxxxxxx Xxxxx specifically for use in the preparation of the Registration
Statement, the Prospectus or any amendment or supplement thereto, or any Blue
Sky Information.
(b) Each of the Underwriters, severally but not jointly, shall indemnify and
hold harmless each of the Issuers against any loss, claim, damage or liability
to which the Issuers may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage or liability (or action in
respect thereof) arises out of or is based upon (i) any untrue statement or
alleged untrue statement of a material fact contained (A) in the Registration
Statement or the Prospectus or any amendment or supplement thereto, or (B) in
any Blue Sky Information, or (ii) the omission or alleged omission to state in
the Registration Statement or the Prospectus or any amendment or supplement
thereto or in any Blue Sky Information a material fact required to be stated
therein or necessary to make the statements therein not misleading; and shall
reimburse any legal or other expenses reasonably incurred by the Issuers in
connection with investigating or defending against any such loss, claim,
damage, liability or action, notwithstanding the possibility that payments for
such expenses might later be held to be improper, in which case the Issuers
shall promptly refund them; provided, however, that such indemnification and
expense reimbursement shall be available from an Underwriter to the extent,
but only to the extent, that such untrue statement or alleged untrue statement
or omission or alleged omission was made in reliance upon and in conformity
with written information furnished to the Issuers by such Underwriter through
Xxxxxxx Xxxxx specifically for use in the preparation thereof.
15
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against
the indemnifying party under such subsection, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however,
that the failure to notify the indemnifying party shall not relieve it from
any liability hereunder to the extent it is not materially prejudiced as a
result thereof and in any event shall not relieve it from any liability which
it may have otherwise than on account of this indemnity agreement. If any such
claim or action shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly
with any other similarly notified indemnifying party, to assume the defense
thereof with counsel reasonably satisfactory to the indemnified party. After
notice from the indemnifying party to the indemnified party of its election to
assume the defense of such claim or action, the indemnifying party shall not
be liable to the indemnified party under such subsection for any legal or
other expenses subsequently incurred by the indemnified party in connection
with the defense thereof other than reasonable costs of investigation; except
that you shall have the right to employ counsel to represent you in connection
with any claim in respect of which indemnity may be sought by the Underwriters
against the Issuers under such subsection if, in your reasonable judgment, it
is advisable for you to be represented by separate counsel, and in that event
the reasonable fees and expenses of such separate counsel shall be paid by the
Issuers.
(d) If the indemnification provided for in this Section 5 is unavailable or
insufficient to hold harmless an indemnified party under subsection (a) or (b)
above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages
or liabilities referred to in subsection (a) or (b) above (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Issuers on the one hand and the Underwriters on the other hand from the
offering of the Purchased Securities or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Issuers on the one hand and the
Underwriters on the other in connection with the statements or omissions that
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative benefits received by the
Issuers 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 of the
Purchased Securities (before deducting expenses) received by the Issuers bear
to the total underwriting discounts and commissions received by the
Underwriters as set forth in the Prospectus Supplement covering the Purchased
Securities. Relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to
information supplied by either of the Issuers or the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The Issuers and the
Underwriters agree that it would not be just and equitable if contribution
pursuant to this subsection (d) were to be determined by pro rata allocation
or by any other method of allocation which does not take into account the
equitable considerations referred to in the first sentence of this subsection
(d). The amount paid by an indemnified party as a result of the losses,
claims, damages or liabilities referred to in the first sentence of this
subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending against any action or claim which is the subject of this
subsection (d). Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Purchased Securities underwritten by it
and distributed to the public were offered to the public exceeds the amount of
any damages that such Underwriter has otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. Each party entitled
to contribution agrees that upon the service of a summons or other initial
legal process upon it in any action instituted against it in respect of which
contribution may be sought, it shall promptly give written notice of such
service to the party or parties from whom contribution may be sought, but the
omission so to notify such party or parties of any such service shall not
relieve the party from whom contribution may be sought from any obligation it
may have hereunder or otherwise.
16
(e) The obligations of the Issuers under this Section 5 shall be in addition
to any liability which the Issuers may otherwise have, and shall extend, upon
the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Securities Act and the Exchange Act; and
the obligations of the Underwriters under this Section 5 shall be in addition
to any liability that the respective Underwriters may otherwise have, and
shall extend, upon the same terms and conditions, to each director or Trustee,
as the case may be, of the Issuers (including any person who, with his or her
consent, is named in the Registration Statement as about to become a director
or Trustee, as the case may be, of the Issuers), to each officer of either of
the Issuers who has signed the Registration Statement and to each person, if
any, who controls either of the Issuers within the meaning of the Securities
Act.
6. EFFECTIVE DATE AND TERMINATION OF TERMS AGREEMENT. This Agreement shall
become effective (a) at 11:00 A.M., New York City time, on the first full
Business Day following the date of the Terms Agreement or (b) at such earlier
time after the date of the Terms Agreement as you shall first release the
Purchased Securities for sale to the public. You shall notify the Issuers
immediately after you have taken any action which causes this Agreement to
become effective. Until this Agreement is effective, it may be terminated by
the Issuers by giving notice as hereinafter provided to you or by you by
giving notice as hereinafter provided to the Issuers, except that the
provisions of Section 3(g) and Section 5 shall at all times be effective.
Your obligations under any Terms Agreement may be terminated by you by
giving notice as hereinafter provided to the Issuers, if (i) the Issuers shall
have failed, refused or been unable, at or prior to the Closing Date, to
perform any agreement on its part to be performed hereunder, (ii) any other
condition of the obligations of the Underwriters hereunder is not fulfilled,
(iii) trading in securities generally on the New York Stock Exchange ("NYSE")
or the American Stock Exchange or the over-the-counter market shall have been
suspended or minimum prices shall have been established on either of such
exchanges or such market by the Commission or by such exchange or other
regulatory body or governmental authority having jurisdiction, (iv) a general
banking moratorium shall have been declared by Federal or state authorities,
(v) the United States engages in hostilities or there is an escalation of
hostilities involving the United States or there is a declaration of war or
national emergency by the United States after the date hereof which, in your
judgment, makes it inadvisable or impracticable to proceed with the delivery
of the Purchased Securities, or (vi) there shall have been such a material
change in general economic, political or financial conditions or if the effect
of international conditions on the financial markets in the United States
shall be such as, in your judgment, makes it inadvisable or impracticable to
proceed with the delivery of the Purchased Securities. Any termination of this
Agreement pursuant to this Section 6 shall be without liability on the part of
the Issuers or the Underwriters except as otherwise provided in Sections 3(g)
and 5 hereof.
Any notice referred to above may be given at the address specified in
Section 9 hereof in writing or by telegraph or telephone, and if by telegraph
or telephone, shall be immediately confirmed in writing.
7. INCREASE IN UNDERWRITERS' COMMITMENTS. If any Underwriter shall default
in its obligation to take up and pay for the Purchased Securities to be
purchased by it under any Terms Agreement and if the number of Purchased
Securities which all Underwriters so defaulting shall have so failed to take
up and pay for does not exceed 10% of the total number of Purchased Securities
agreed to be purchased pursuant to such Terms Agreement, the non-defaulting
Underwriters shall take up and pay for (in addition to the number of Purchased
Securities they are obligated to purchase pursuant to such Terms Agreement)
the number of Purchased Securities agreed to be purchased by all such
defaulting Underwriters, as hereinafter provided. Such Purchased Securities
shall be taken up and paid for by such non-defaulting Underwriter or
Underwriters in such amount or amounts as you may designate with the consent
of each Underwriter so designated or, in the event no such designation is
made, such Purchased Securities shall be taken up and paid for by all non-
defaulting Underwriters pro rata in proportion to the number of Purchased
Securities they have agreed to purchase under such Terms Agreement.
Without relieving any defaulting Underwriter from its obligations hereunder,
each of the Issuers agrees with the non-defaulting Underwriters that it will
not sell any Purchased Securities under any Terms Agreement unless
17
all of the Purchased Securities under any such Terms Agreement are purchased
by the Underwriters (or by substituted underwriters selected by you with the
approval of the Issuers or selected by the Issuers with your approval).
If a new underwriter or underwriters are substituted by the Underwriters or
by the Issuers for a defaulting Underwriter or Underwriters in accordance with
the foregoing provision, the Issuers or you shall have the right to postpone
the Closing Date for a period not exceeding five full business days in order
that necessary changes in the Registration Statement and Prospectus and other
documents may be effected.
The term Underwriter as used in this Agreement shall refer to and include
any underwriter substituted under this Section 7.
8. SURVIVAL OF INDEMNITIES, CONTRIBUTIONS, WARRANTIES AND REPRESENTATIONS.
The indemnity and contribution agreements contained in Section 5 hereof and
the representations, warranties and agreements of the Issuers in Sections 1
and 3 hereof shall survive the delivery of the Purchased Securities to the
Underwriters hereunder and shall remain in full force and effect, regardless
of any termination or cancellation of this Agreement or any investigation made
by or on behalf of any indemnified party.
9. NOTICES. Except as otherwise provided in this Agreement, (a) whenever
notice is required by the provisions of this Agreement to be given to the
Company, such notice shall be in writing addressed to the Company at The
Coastal Corporation, Coastal Tower, Nine Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxx 00000-
0995, Attention: Director--Financial Administration, with a copy to Xxxxxx X.
X'Xxxxx, Esq.; (b) to the Trust c/o The Coastal Corporation at the address
listed above and (c) whenever notice is required by the provisions of this
Agreement to be given to the Underwriters, such notice shall be in writing and
addressed to the Underwriters at their respective addresses furnished to the
Company in writing for the purpose of communications hereunder.
10. INFORMATION FURNISHED BY UNDERWRITERS. The statements with respect to
the public offering of the Purchased Securities on the cover page of the
Prospectus Supplement covering the Purchased Securities and under the caption
"Underwriting", in such Prospectus Supplement constitute the only information
furnished to the Issuers in writing on behalf of or by you expressly for use
in the Registration Statement, the Prospectus or any amendment or supplement
thereto.
11. PARTIES. This Agreement shall inure to the benefit of and be binding
upon the Underwriters, each of the Issuers, any officer, director, trustee, or
controlling person referred to in Section 5 hereof, and their respective
successors and assigns, and no other person shall acquire or have any right by
virtue of this Agreement. The term "successors and assigns", as used in this
Agreement, shall not include any purchaser of any of the Purchased Securities
from the Underwriters merely by reason of such purchase.
12. DEFINITION OF "BUSINESS DAY" AND "SUBSIDIARY". For purposes of this
Agreement, (a) "Business Day" means any day on which the NYSE is open for
trading, and (b) "Subsidiary" has the meaning set forth in Rule 405 of the
Securities Act.
13. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO
THE CHOICE OF LAW OR CONFLICT OF LAWS PRINCIPLES THEREOF.
18
14. COUNTERPART. 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.
Please confirm, by signing and returning to us four counterparts of this
Agreement, that the foregoing correctly sets forth the Agreement between you
and the Issuers.
Very truly yours,
COASTAL FINANCE
By: _________________________________
THE COASTAL CORPORATION,
as Guarantor
By: _________________________________
Confirmed and accepted as of
the date first above mentioned:
[Lead Underwriters]
BY:
By: _________________________________
19
EXHIBIT A
TERMS AGREEMENT
% TRUST PREFERRED SECURITIES
(LIQUIDATION AMOUNT $25 PER PREFERRED SECURITY)
GUARANTEED BY THE COASTAL CORPORATION
[Date]
Coastal Finance
Coastal Tower
Nine Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000-0000
Dear Sirs:
Coastal Finance (the "Trust") and The Coastal Corporation, as Guarantor (the
"Company" and, together with the Trust, the "Issuers") and [Lead
Underwriters], [as representatives of the underwriters named in Schedule A
hereto] (the "Underwriters"), have entered into an Underwriting Agreement (the
"Underwriting Agreement"), dated , relating to the issuance from
time to time of Trust Originated Preferred Securities liquidation amount $25
per preferred security of the Trust (the "Preferred Securities", and together
with the Guarantee, the "Securities"). This Terms Agreement, relating to the
Securities, is being entered into pursuant to the Underwriting Agreement.
Capitalized terms used herein, not otherwise defined, have the meanings given
them in the Underwriting Agreement.
The Underwriters understand that the Issuers propose to issue and sell
Preferred Securities (the "Purchased Securities"). Subject to the terms,
conditions, representations and warranties set forth or incorporated by
reference herein, the Issuers agree to sell to the Underwriters and the
Underwriters agree, severally but not jointly, to purchase from the Issuers
the Purchased Securities in the respective numbers set forth next to their
names in Schedule A hereto, at $25.00 per Preferred Security. The Prospectus
Supplement with respect to the Purchased Securities is dated and
includes the Prospectus dated .
The Underwriters will pay for such Purchased Securities upon delivery
thereof in New York City at 10:00 A.M. (New York time) on (the
"Closing Date") in immediately available (same day) funds, or at such other
time on the Closing Date as shall be agreed upon by the Company and the
Underwriters.
The Purchased Securities shall have the following terms, in addition to
those set forth in the governing documents:
(a) Distributions: % per annum of the liquidation amount of $25.00 per
Preferred Security
(b) Conversion:
(c) Initial Public Offering Price:
(d) Purchase Price:
(e) Underwriters' Compensation
(f) Distribution Payment Dates: , , , and of each year,
commencing .
(g) Redemption:(i) upon repayment, whether at maturity or upon acceleration,
redemption or otherwise, of the Subordinated Debt Securities (ii) upon a
Tax Event or (iii) upon an Investment Company Event
1
All provisions contained in the Underwriting Agreement are incorporated by
reference herein in their entirety and shall be deemed to be part of this
Agreement to the same extent as if such provisions had been set forth in full
herein.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CHOICE OF LAW OR
CONFLICT OF LAWS PRINCIPLES THEREOF.
This instrument may be signed by the parties in counterparts which together
shall constitute one and the same agreement between the parties and shall
become effective at such time as each of the parties shall have signed such
counterparts and shall have notified the other party thereof.
Please confirm your agreement herewith by having an authorized officer sign
a copy of this Agreement in the space provided below.
Very truly yours,
[Lead Underwriters]
By:
By: _________________________________
Name:
Title:
Accepted and Agreed to as of the
date first above written
Coastal Finance
By: _________________________________
Name:
Title:
The Coastal Corporation
By: _________________________________
Name:
Title:
2
SCHEDULE A
TO
TERMS AGREEMENT
NUMBER
OF
PURCHASED
NAME SECURITIES
---- -----------
-----------
Total.....................................................
===========
3
