EXHIBIT 1.1
$250,000,000
▇. ▇. ▇▇▇▇▇▇▇ CORPORATION
6.25% SENIOR NOTES
DUE 2037
UNDERWRITING AGREEMENT
FEBRUARY 9, 2007
February 9, 2007
Citigroup Global Markets Inc.
Credit Suisse Securities (USA) LLC
As Representatives of the Several Underwriters
c/o Citigroup Global Markets Inc.
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs and Mesdames:
▇. ▇. ▇▇▇▇▇▇▇ Corporation, a Delaware corporation (the "COMPANY"),
proposes to issue and sell to the several Underwriters named in Schedule I
hereto (the "UNDERWRITERS") $250,000,000 principal amount of its 6.25% Senior
Notes due 2037 (the "SECURITIES") to be issued pursuant to the provisions of an
Indenture, dated as of February 14, 2003, as supplemented by the Fifth
Supplemental Indenture, to be dated as of February 14, 2007 (the "INDENTURE"),
between the Company and The Bank of New York, as Trustee (the "TRUSTEE").
The Company has filed with the Securities and Exchange Commission
(the "COMMISSION") a registration statement, including a prospectus, on Form S-3
(No. 333-128546) covering the registration of the securities of the Company,
including the Securities, under the Securities Act of 1933, as amended (the
"SECURITIES ACT"), and the offering thereof from time to time in accordance with
Rule 415 of the rules and regulations of the Commission under the Securities Act
(the "RULES AND REGULATIONS") and the Company has filed such post-effective
amendments thereto as may be required prior to the execution of this Agreement.
Promptly after execution and delivery of this Agreement, the Company will
prepare and file a final prospectus and final prospectus supplement in
accordance with the provisions of paragraph (b) of Rule 424 of the Rules and
Regulations. "REGISTRATION STATEMENT" at any particular time means such
registration statement in the form then filed with the Commission, including any
amendment thereto, any document incorporated by reference therein and any
information in a prospectus or prospectus supplement deemed or retroactively
deemed to be a part thereof pursuant to Rule 430B or 430C of the Rules and
Regulations, that in any case has not been superseded or modified. "REGISTRATION
STATEMENT" without reference to a time means the Registration Statement as of
the time of the first contract of sale for the Securities, which time shall be
considered the "EFFECTIVE DATE" of such Registration Statement relating to the
Securities. For purposes of this definition, information contained in a form of
prospectus or prospectus supplement that is deemed or retroactively deemed to be
a part of the Registration Statement pursuant to Rule 430B of the Rules and
Regulations shall be considered to be included in the Registration Statement as
of the time specified in Rule 430B of the Rules and Regulations. "STATUTORY
PROSPECTUS" as of any particular time means the prospectus relating to the
Securities that is included in the Registration Statement immediately prior to
that time, including all information contained in a form of prospectus or
prospectus supplement deemed to be a part
thereof pursuant to Rule 430B or 430C of the Rules and Regulations that in any
case has not been superseded or modified. For purposes of this definition,
information contained in a form of prospectus (including a prospectus
supplement) that is deemed or retroactively deemed to be a part of the
Registration Statement pursuant to Rule 430B of the Rules and Regulations shall
be considered to be included in the Statutory Prospectus only as of the actual
time that form of prospectus (including a prospectus supplement) is filed with
the Commission pursuant to Rule 424(b) of the Rules and Regulations and not
retroactively. "PROSPECTUS" means the Statutory Prospectus that discloses the
public offering price and other final terms of the Securities and otherwise
satisfies Section 10(a) of the Securities Act and the term "PRELIMINARY
PROSPECTUS" means the Statutory Prospectus, as supplemented by the Preliminary
Prospectus Supplement, dated February 9, 2007.
For purposes of this Agreement, "ISSUER FREE WRITING PROSPECTUS"
means any "issuer free writing prospectus," as defined in Rule 433(h) of the
Rules and Regulations, relating to the Securities in the form filed or required
to be filed with the Commission or, if not required to be filed, in the form
retained or required to be retained in the Company's records pursuant to Rule
433(g) of the Rules and Regulations, "GENERAL USE ISSUER FREE WRITING
PROSPECTUS" means any Issuer Free Writing Prospectus that is intended for
general distribution to prospective investors, as evidenced by its being
specified in Schedule II hereto and "LIMITED USE ISSUER FREE WRITING PROSPECTUS"
means any Issuer Free Writing Prospectus that is not a General Use Issuer Free
Writing Prospectus. All references to the terms "Registration Statement,"
"Prospectus" and "preliminary prospectus" shall be deemed to include all
documents incorporated therein by reference pursuant to the Securities Exchange
Act of 1934, as amended (the "EXCHANGE ACT"). For purposes of this Agreement,
all references to the Registration Statement, Prospectus or any preliminary
prospectus or to any amendment or supplement to any of them shall be deemed to
include any copy filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval System.
1. Representations and Warranties. The Company represents and
warrants to and agrees with each of the Underwriters that:
(a) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending before or, to the
knowledge of the Company, threatened by the Commission.
(b) (i) (A) At the time the Registration Statement initially became
effective, (B) at the time of each amendment thereto for the purposes of
complying with Section 10(a)(3) of the Securities Act (whether by
post-effective amendment, incorporated report or form of prospectus), (C)
at the effective time of the Registration Statement relating to the
Securities and (D) on the Closing Date, the Registration Statement
conformed and will confirm in all material respects to the requirements of
the Securities Act and the Rules and Regulations and did 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, (ii) (A) on its date, (B) at the time of filing the
Prospectus pursuant to Rule 424(b) of the Rules and Regulations and (C) on
the Closing Date, the Prospectus will conform in all material respects to
the requirements of the Securities Act
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and the Rules and Regulations, (iii) as of 1:30 p.m. New York City time on
the date of this Agreement (the "APPLICABLE TIME"), neither the General
Use Issuer Free Writing Prospectus issued at or prior to the Applicable
Time and the Statutory Prospectus identified in Schedule II attached
hereto and all other documents set forth on Schedule II, all considered
together (collectively, the "GENERAL DISCLOSURE PACKAGE"), nor any
individual Limited Use Issuer Free Writing Prospectus, when considered
together with the General Disclosure Package, included any untrue
statement of a material fact or omitted to state any material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, except that the
foregoing does not apply to (A) statements in or omissions from any
prospectus included in the Registration Statement or any Issuer Free
Writing Prospectus in reliance upon or in conformity with written
information furnished to the Company by any Underwriter through the
representative or representatives of the Underwriter (the
"REPRESENTATIVES") specifically for use therein, (iv) (A) on its date, (B)
at the time of its filing pursuant to Rule 424(b) of the Rules and
Regulations and (C) on the Closing Date, the Prospectus does not include
and will not include any untrue statement of a material fact or omit to
state any material fact required to be stated therein, in light of the
circumstances under which they were made, or necessary to make the
statements therein not misleading, except that the foregoing does not
apply to (A) statements in or omissions from any of such documents based
upon written information furnished to the Company by any Underwriter
through the Representatives specifically for use therein or (B) that part
of the Registration Statement that constitutes the Statement of
Eligibility (Form T-1) under the Trust Indenture Act of 1939, as amended
(the "TRUST INDENTURE ACT"), of the Trustee; and (v) the documents
incorporated by reference in the Prospectus, at the time they were, or
hereafter, are filed with the Commission, complied and, at any time when a
prospectus relating to the Securities is required (or would be required,
but for the provisions of Rule 172 of the Rules and Regulations) to be
delivered under the Securities Act in connection with sales by any
Underwriter or dealer, will comply as to form in all material respects
with the requirements of the Exchange Act and the rules and regulations
thereunder.
(c) At the earliest time after the filing of the Registration
Statement that the Company or another offering participant made a bona
fide offer (within the meaning of Rule 164(h)(2) of the Rules and
Regulations) of the Securities and at the date of this Agreement, the
Company was not and is not an "ineligible issuer" as defined in Rule 405
of the Rules and Regulations.
(d) Each Issuer Free Writing Prospectus, as of its issue date and at
all subsequent times through the completion of the public offer and sale
of the Securities or until any earlier date that the Company notified or
notifies the Representatives as described in the next sentence, did not,
does not and will not include any information that conflicted, conflicts
or will conflict with the information then contained in the Registration
Statement. If at any time following issuance of an Issuer Free Writing
Prospectus there occurred or occurs an event or development as a result of
which such Issuer Free Writing Prospectus conflicted or would conflict
with the information then contained in the Registration Statement or as
result of which such Issuer Free Writing Prospectus, if republished
immediately following such event or development, would include an untrue
statement of a material fact or would omit to state a material fact
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necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, (A) the Company
has promptly notified or will promptly notify the Representatives and (B)
the Company has promptly amended or will promptly amend or supplement such
Issuer Free Writing Prospectus to eliminate or correct such conflict,
untrue statement or omission.
(e) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware, with
power and authority (corporate and other) to own its properties and
conduct its business as described in the General Disclosure Package and
the Prospectus; and the Company is duly qualified to do business as a
foreign corporation in good standing in all other jurisdictions in which
its ownership or lease of property or the conduct of its business requires
such qualification, except in such jurisdictions where the failure to be
so qualified would not individually or in the aggregate have a material
adverse effect on the condition (financial or other), business, properties
or results of operations of the Company and its subsidiaries taken as a
whole ("MATERIAL ADVERSE EFFECT").
(f) Each Significant Subsidiary (as defined below) of the Company
has been duly incorporated and is an existing corporation in good standing
under the laws of the jurisdiction of its incorporation, with power and
authority (corporate and other) to own its properties and conduct its
business as described in the General Disclosure Package and the
Prospectus; and each Significant Subsidiary of the Company is, to the
extent applicable, duly qualified to do business as a foreign corporation
in good standing in all other jurisdictions in which its ownership or
lease of property or the conduct of its business requires such
qualification, except where the failure to be so qualified would not
individually or in the aggregate have a Material Adverse Effect; all of
the issued and outstanding capital stock of each Significant Subsidiary of
the Company has been duly authorized and validly issued and is fully paid
and nonassessable; and the capital stock of each Significant Subsidiary
owned by the Company, directly or through subsidiaries, is owned free from
liens, encumbrances and defects. As used herein, "SIGNIFICANT
SUBSIDIARIES" means Admiral Insurance Company, Berkley Regional Insurance
Company, Berkley Insurance Company and Nautilus Insurance Company, which
are currently the only operating insurance companies that are "significant
subsidiaries" of the Company as that term is defined in Rule 1-02(w) of
Regulation S-X of the Rules and Regulations.
(g) The Indenture has been duly qualified under the Trust Indenture
Act and has been duly authorized, and on the Closing Date (as defined
below) will be duly executed and delivered by the Company and a valid and
binding agreement of the Company, enforceable in accordance with its terms
except as (i) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and (ii)
rights of acceleration and the availability of equitable remedies may be
limited by equitable principles of general applicability.
(h) The Securities have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and
delivered to and paid for by the Underwriters in accordance with the terms
of this Agreement on the
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Closing Date, such Securities will be duly executed, authenticated, issued
and delivered and entitled to the benefits of the Indenture and will be
valid and binding obligations of the Company, enforceable in accordance
with their terms except as (i) the enforceability thereof may be limited
by bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (ii) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of general
applicability; and the Securities and the Indenture will conform to the
information in the General Disclosure Package and will conform to the
descriptions thereof in the Prospectus.
(i) Except as disclosed in the General Disclosure Package and the
Prospectus, there are no contracts, agreements or understandings between
the Company and any person that would give rise to a valid claim against
the Company or any Underwriter for a brokerage commission, finder's fee or
other like payment in connection with this offering.
(j) There are no contracts, agreements or understandings between the
Company and any person granting such person the right to require the
Company to file a registration statement under the Securities Act with
respect to any securities of the Company owned or to be owned by such
person or to require the Company to include such securities in the
securities registered pursuant to the Registration Statement or in any
securities being registered pursuant to any other registration statement
filed by the Company under the Securities Act.
(k) No consent, approval, authorization, or order of, or filing
with, any governmental agency or body or any court is required for the
performance by the Company of its obligations under this Agreement, the
Indenture or the Securities, except such as have been obtained and made
under the Securities Act, as contemplated under Section 5(a) hereof, and
such as may be required under state securities laws.
(l) The execution and delivery of, and the performance by the
Company of its obligations under, this Agreement, the Indenture and the
Securities will not result in a breach or violation of any of the terms
and provisions of, or constitute a default under, any statute, any rule,
regulation or order of any governmental agency or body or any court,
domestic or foreign, having jurisdiction over the Company or any
Significant Subsidiaries of the Company or any of their material
properties, or any material agreement or instrument to which the Company
or any such subsidiary is a party or by which the Company or any such
subsidiary is bound or to which any of the properties of the Company or
any such subsidiary is subject, or the charter or by-laws of the Company
or any such subsidiary, and the Company has full power and authority to
authorize, issue and sell the Securities as contemplated by this
Agreement.
(m) This Agreement has been duly authorized, executed and delivered
by the Company.
(n) Except as disclosed in the General Disclosure Package and the
Prospectus, the Company and its Significant Subsidiaries have good and
marketable title to all real properties and all other properties and
assets owned by them, in each case free from liens, encumbrances and
defects that would affect the value thereof or interfere with the use
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made or to be made thereof by them, other than liens, encumbrances and
defects that would not individually or in the aggregate have a Material
Adverse Effect; and except as disclosed in the General Disclosure Package
and the Prospectus, the Company and its subsidiaries hold any leased real
or personal property under valid and enforceable leases with no exceptions
that would individually or in the aggregate have a Material Adverse
Effect.
(o) The Company and its Significant Subsidiaries possess adequate
certificates, authorities or permits issued by appropriate governmental
agencies or bodies necessary to conduct the business now operated by them
and have not received any notice of proceedings relating to the revocation
or modification of any such certificate, authority or permit that, if
determined adversely to the Company or any of its Significant
Subsidiaries, would individually or in the aggregate have a Material
Adverse Effect.
(p) The Company has made all required filings under applicable
insurance holding company statutes, and has received approvals of
acquisition of control and/or affiliate transactions, in each jurisdiction
in which such filings or approvals are required, except where the failure
to have made such filings or receive such approvals in any such
jurisdiction would not have individually or in the aggregate a Material
Adverse Effect; each of the Company's Significant Subsidiaries that is
required to be organized and licensed as an insurance or reinsurance
company (the "INSURANCE SUBSIDIARIES") in its jurisdiction of
incorporation is duly organized and licensed as an insurance or
reinsurance company in its respective jurisdiction of incorporation, and
each such Significant Subsidiary is duly licensed or authorized as an
insurer or reinsurer (the "INSURANCE LICENSES") in each other jurisdiction
in which such licensing or authorization is required, except where the
failure to be so licensed or authorized in any such jurisdiction would not
have individually or in the aggregate a Material Adverse Effect; there is
no pending or, to the knowledge of the Company, threatened action, suit,
proceeding or investigation that would reasonably be expected to lead to
the revocation, termination or suspension of any such Insurance Licenses,
the revocation, termination or suspension of which would have individually
or in the aggregate a Material Adverse Effect; and except as disclosed in
the General Disclosure Package and the Prospectus, no insurance regulatory
agency or body has issued any order or decree impairing, restricting or
prohibiting the payment of dividends of any Company subsidiary to its
respective parent which would have individually or in the aggregate a
Material Adverse Effect.
(q) The Company and each of its Significant Subsidiaries is in
compliance with the requirements of all laws, ordinances, governmental
rules or regulations or court decrees to which it may be subject, and has
filed all notices, reports, documents or other information required to be
filed thereunder, except where the failure to so comply or file would not
individually or in the aggregate have a Material Adverse Effect.
(r) Except as disclosed in the General Disclosure Package and the
Prospectus, neither the Company nor any of its Insurance Subsidiaries is
in violation of, or in default in the performance, observance or
fulfillment of, any obligation, agreement, covenant or condition contained
in reinsurance treaties, contracts, agreements and arrangements to which
the Company or any of its Insurance Subsidiaries is a party, except for
such
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violations or defaults which would not individually or in the aggregate
have a Material Adverse Effect; neither the Company nor any of its
Insurance Subsidiaries has received any notice from any of the other
parties to such treaties, contracts, agreements or arrangements that such
other party intends not to perform its obligations thereunder and none of
them has any reason to believe that any of the other parties to such
treaties, contracts, agreements or arrangements will be unable to perform
its obligations thereunder, except to the extent that such nonperformance
would not individually or in the aggregate have a Material Adverse Effect.
(s) To the knowledge of the Company and its Insurance Subsidiaries,
no change in any insurance law or regulation is pending that would
reasonably be expected to have individually or in the aggregate a Material
Adverse Effect, except as described in the General Disclosure Package and
the Prospectus.
(t) No labor dispute with the employees of the Company or any
Significant Subsidiary exists or, to the knowledge of the Company, is
imminent that would reasonably be expected to have individually or in the
aggregate a Material Adverse Effect.
(u) The Company and its subsidiaries own, possess or can acquire on
reasonable terms, adequate trademarks, trade names and other rights to
inventions, know-how, patents, copyrights, confidential information and
other intellectual property (collectively, "INTELLECTUAL PROPERTY RIGHTS")
materially necessary to conduct the business now operated by them and have
not received any notice of infringement of or conflict with asserted
rights of others with respect to any intellectual property rights that, if
determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a Material Adverse Effect.
(v) Except as disclosed in the General Disclosure Package and the
Prospectus, neither the Company nor any of its subsidiaries is in
violation of any statute, any rule, regulation, decision or order of any
governmental agency or body or any court, domestic or foreign, relating to
the use, disposal or release of hazardous or toxic substances or relating
to the protection or restoration of the environment or human exposure to
hazardous or toxic substances (collectively, "ENVIRONMENTAL LAWS"), owns
or operates any real property contaminated with any substance that is
subject to any environmental laws, is liable for any off-site disposal or
contamination pursuant to any environmental laws, or is subject to any
claim relating to any environmental laws, which violation, contamination,
liability or claim would individually or in the aggregate have a Material
Adverse Effect; and the Company is not aware of any pending investigation
which would reasonably be expected to lead to such a claim.
(w) Except as disclosed in the General Disclosure Package and the
Prospectus, there are no pending actions, suits or proceedings against or
affecting the Company, any of its subsidiaries or any of their respective
properties that would individually or in the aggregate have a Material
Adverse Effect, or would materially and adversely affect the ability of
the Company to perform its obligations under this Agreement; and no such
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actions, suits or proceedings are, to the Company's knowledge, threatened
or contemplated.
(x) KPMG LLP, who have certified the financial statements and
supporting schedules of the Company and its subsidiaries contained in the
General Disclosure Package and the Prospectus, are independent public
accountants within the meaning of the Securities Act and the Rules and
Regulations; except as disclosed in the General Disclosure Package and the
Prospectus, the financial statements included or incorporated by reference
in the Registration Statement and the General Disclosure Package and the
Prospectus present fairly the financial position of the Company and its
consolidated subsidiaries as of the dates shown and their results of
operations and cash flows for the periods shown; except as disclosed in
the General Disclosure Package and the Prospectus, such financial
statements have been prepared in conformity with the generally accepted
accounting principles in the United States applied on a consistent basis;
except as disclosed in the General Disclosure Package and the Prospectus,
the schedules included or incorporated in the Registration Statement
present fairly the information required to be stated therein; and except
as disclosed in the General Disclosure Package and the Prospectus, the
Company and its Insurance Subsidiaries have made no material change in
their insurance reserving practices since the most recent audited
financial statements included in the General Disclosure Package and the
Prospectus.
(y) The statutory annual and quarterly statements of the Insurance
Subsidiaries required to file such statutory statements and the statutory
balance sheets and income statements included in such statutory annual and
quarterly statements, most recently filed in each jurisdiction, have been
prepared in conformity with required or permitted or prescribed statutory
accounting principles or practices applied on a consistent basis, except
as may otherwise be indicated in the notes thereto, and present fairly the
financial position of the Insurance Subsidiaries (on a statutory basis)
for the period covered thereby.
(z) The Company and its subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or
specific authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with United
States generally accepted accounting principles and to maintain asset
accountability; (iii) access to assets is permitted only in accordance
with management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(aa) Except as disclosed in the General Disclosure Package and the
Prospectus and except for regular dividends declared or paid consistent
with past practice, since the date of the latest audited financial
statements included in the General Disclosure Package and the Prospectus,
(i) there has been no material adverse change, nor any development or
event involving a prospective material adverse change, in the condition
(financial or other), business, properties or results of operations of the
Company and its subsidiaries
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taken as a whole, (ii) there have not been any transactions entered into
by the Company or any of its subsidiaries other than in the ordinary
course of business which are material to the Company and its subsidiaries
taken as a whole, and, (iii) there has been no dividend or distribution of
any kind declared, paid or made by the Company on any class of its capital
stock.
(bb) The Company is not and, after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as
described in the General Disclosure Package and the Prospectus, will not
be an "investment company" as defined in the Investment Company Act of
1940.
2. Agreements to Sell and Purchase. The Company hereby agrees to
sell to the several Underwriters, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees, severally and not jointly, to purchase from the
Company the respective principal amount of Securities set forth in Schedule I
hereto opposite its name at 98.909% of their principal amount (the "PURCHASE
PRICE") plus accrued interest, if any, from February 14, 2007 to the date of
payment and delivery.
3. Terms of Public Offering. The Company is advised by you that the
Underwriters propose to make a public offering of their respective portions of
the Securities as soon after the Registration Statement and this Agreement have
become effective as in your judgment is advisable. The Company is further
advised by you that the Securities are to be offered to the public initially at
99.784% of their principal amount (the "PUBLIC OFFERING PRICE") plus accrued
interest, if any, from February 14, 2007 to the date of payment and delivery and
to certain dealers selected by you at a price that represents a concession not
in excess of 0.5% of their principal amount under the Public Offering Price, and
that any Underwriter may allow, and such dealers may reallow, a concession to
certain other dealers not to exceed 0.25% of the principal amount of the
Securities.
4. Payment and Delivery. Payment for the Securities shall be made to
the Company in Federal or other funds immediately available in New York City
against delivery of such Securities at 9:00 a.m., New York City time, on
February 14, 2007, or at such other time on the same or such other date, not
later than February 22, 2007, as shall be designated in writing by you. The time
and date of such payment are hereinafter referred to as the "CLOSING DATE."
Certificates for the Securities shall be in global form and
registered in such names and in such denominations as you shall request in
writing not later than one full business day prior to the Closing Date. The
certificates evidencing the Securities shall be delivered to you on the Closing
Date for the respective accounts of the several Underwriters, with any transfer
taxes payable in connection with the transfer of the Securities to the
Underwriters duly paid, against payment of the Purchase Price therefor plus
accrued interest, if any, to the date of payment and delivery.
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5. Covenants of the Company. In further consideration of the
agreements of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:
(a) The Company has filed or will file each Statutory Prospectus
(including the Prospectus) with the Commission pursuant to and in
accordance with Rule 424(b) not later than the second business day
following the earlier of the date it is first used or the execution and
delivery of this Agreement. The Company has complied and will comply with
Rule 433 of the Rules and Regulations.
(b) The Company will advise the Representatives promptly of any
proposal to amend or supplement the Registration Statement, the Prospectus
or the General Disclosure Package and will afford the Representatives a
reasonable opportunity to comment on any such proposed amendment or
supplement; provided, however, the Company shall not file any such
proposed amendment or supplement to which the Representatives reasonably
object; and the Company will also advise the Representatives promptly of
the filing of any such amendment or supplement and of the institution by
the Commission of any stop order proceedings in respect of the
Registration Statement or of any part thereof and will use its best
efforts to prevent the issuance of any such stop order and to obtain as
soon as possible its lifting, if issued.
(c) The Company represents and agrees that, unless it obtains the
prior consent of the Representatives, and each Underwriter represents and
agrees that, unless it obtains the prior consent of the Company and the
Representatives, it has not made and will not make any offer relating to
the Securities that would constitute an Issuer Free Writing Prospectus, or
that would otherwise constitute a "free writing prospectus," as defined in
Rule 405 of the Rules and Regulations, required to be filed with the
Commission. Any such free writing prospectus consented to by the Company
and the Representatives is hereinafter referred to as a "PERMITTED FREE
WRITING PROSPECTUS." The Company represents that it has treated and agrees
that it will treat each Permitted Free Writing Prospectus as an "issuer
free writing prospectus," as defined in Rule 433 of the Rules and
Regulations, and has complied and will comply with the requirements of
Rules 164 and 433 of the Rules and Regulations applicable to any Permitted
Free Writing Prospectus, including timely Commission filing where
required, legending and record keeping.
(d) The Company will prepare a final term sheet relating to the
Securities, containing only information that describes the final terms of
the Securities and otherwise in a form consented to by the
Representatives, and will file such final term sheet within the period
required by Rule 433(d)(5)(ii) of the Rules and Regulations following the
date such final terms have been established for all classes of the
offering of the Securities. Any such final term sheet is an Issuer Free
Writing Prospectus and a Permitted Free Writing Prospectus for purposes of
this Agreement. The Company also consents to the use by any Underwriter of
a free writing prospectus that contains only (i)(x) information describing
the preliminary terms of the Securities or their offering or (y)
information that describes the final terms of the Securities or their
offering and that is included in the final term sheet of the Company
contemplated in the first sentence of this subsection or (ii) other
information that is not "issuer information," as defined in Rule 433 of
the Rules and
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Regulations, it being understood that any such free writing prospectus
referred to in clause (i) or (ii) above shall not be an Issuer Free
Writing Prospectus for purposes of this Agreement.
(e) If, at any time when a prospectus relating to the Securities as
in the opinion of counsel for the Underwriters is (or but for the
exemption in Rule 172 would be) required to be delivered under the
Securities Act in connection with sales by any Underwriter or dealer, any
event occurs as a result of which the General Disclosure Package or the
Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or if for any other reason it shall
be necessary during the same period to amend or supplement the General
Disclosure Package or the Prospectus or to file under the Exchange Act any
document incorporated by reference in the Prospectus in order to comply
with the provisions of the Securities Act, the Exchange Act or the Trust
Indenture Act, the Company promptly will notify the Representatives of
such event, and if such event shall occur or if, in the opinion of counsel
for the Underwriters, it is necessary at any time to amend the General
Disclosure Package or the Prospectus to comply with the Securities Act,
the Company will promptly prepare and file with the Commission, at its own
expense, an amendment or supplement which will correct such statement or
omission or an amendment which will effect such compliance. Neither the
Representatives' consent to, nor the Underwriters' delivery of, any such
amendment or supplement shall constitute a waiver of any of the conditions
set forth in Section 6 hereof.
(f) As soon as practicable, but not later than 16 months, after the
date of this Agreement, the Company will make generally available to its
securityholders an earnings statement covering a period of at least 12
months beginning after the date of this Agreement and satisfying the
provisions of Section 11(a) of the Securities Act and Rule 158 of the
Rules and Regulations.
(g) The Company will furnish to the Representatives copies of the
Registration Statement, including all exhibits, any related preliminary
prospectus, any related preliminary prospectus supplement, the Prospectus,
any Issuer Free Writing Prospectus and all amendments and supplements to
such documents, in each case prior to 3:00 P.M. New York City time on the
business day next succeeding the date of this Agreement or as soon as
possible, with respect to any amendment or supplement, during the period
mentioned in Section 5(c) above and in such quantities as the
Representatives reasonably request. The Company will pay the expenses of
printing and distributing to the Underwriters all such documents.
(h) The Company will arrange for the qualification of the Securities
for sale under the laws of such jurisdictions as the Representatives
reasonably designate and will continue such qualifications in effect so
long as required for the distribution; provided, that in connection
therewith the Company shall not be required to qualify to do business in
any jurisdiction or to file or consent or otherwise subject itself to
service of process or taxation in any jurisdiction where it is not already
so subject.
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(i) During the period of five years hereafter, the Company will
furnish to the Representatives and, upon request, to each of the other
Underwriters, as soon as practicable after the end of each fiscal year, a
copy of its annual report to stockholders for such year; and the Company
will furnish to the Representatives (i) as soon as available, a copy of
each report and any definitive proxy statement of the Company filed with
the Commission under the Exchange Act or mailed to stockholders, and (ii)
from time to time, such other information concerning the Company as the
Representatives may reasonably request.
(j) Whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, the Company will pay or
cause to be paid all expenses incident to the performance of its
obligations under this Agreement, including: (i) the fees, disbursements
and expenses of the Company's counsel and the Company's accountants in
connection with the registration and delivery of the Securities under the
Securities Act and all other fees or expenses in connection with the
preparation and filing of the Indenture, the Registration Statement, any
preliminary prospectus, the Prospectus, any Issuer Free Writing Prospectus
and amendments and supplements to any of the foregoing, including all
printing costs associated therewith, and the mailing and delivering of
copies thereof to the Underwriters and dealers, in the quantities
hereinabove specified, (ii) all costs and expenses related to the transfer
and delivery of the Securities to the Underwriters, including any transfer
or other taxes payable thereon, (iii) the cost of printing certificates
representing the Securities, (iv) any fees charged by securities rating
services for rating the Securities, (v) the fees and expenses of the
Trustee and any agent of the Trustee and the fees and disbursements of
counsel for the Trustee in connection with the Indenture and the
Securities, (vi) travel and lodging expenses of officers and employees of
the Company for any "road show" undertaken in connection with the
marketing of the offering of the Securities, and one-half of the cost of
any aircraft chartered in connection with the road show, and (vii) all
other costs and expenses incident to the performance of the obligations of
the Company hereunder for which provision is not otherwise made in this
Section. It is understood, however, that except as provided in this
Section, Section 7 entitled "Indemnity and Contribution", and the last
paragraph of Section 9 below, the Underwriters will pay all of their costs
and expenses, including fees and disbursements of their counsel, transfer
taxes payable on resale of any of the Securities by them and any
advertising expenses connected with any offers they may make.
6. Conditions to the Underwriters' Obligations. The obligations of
the Company to sell the Securities to the Underwriters and the several
obligations of the Underwriters to purchase and pay for the Securities on the
Closing Date are subject to the following conditions:
(a) The Prospectus shall have been filed with the Commission in
accordance with the Rules and Regulations and Section 5(a) of this
Agreement. The final term sheet described in Section 5(d) and identified
in Section 2.a of Schedule II shall have been filed within the period
required by Rule 433(d)(5)(ii) of the Rules and Regulations following the
date such final terms have been established for all classes of the
offering of the Securities. No stop order suspending the effectiveness of
the Registration Statement or of
-12-
any part thereof shall have been issued and no proceedings for that
purpose shall have been instituted or, to the knowledge of the Company or
any Underwriter, shall be contemplated by the Commission.
(b) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date:
(i) there shall not have occurred any downgrading, nor shall
any notice have been given of any intended or potential downgrading
or of any review for a possible change that does not indicate the
direction of the possible change, in the rating accorded any of the
Company's securities by ▇▇▇▇▇'▇ Investors Service, Inc. or Standard
& Poor's Ratings Group, a division of McGraw Hill, Inc.; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or operations
of the Company and its subsidiaries, taken as a whole, from that set
forth in the General Disclosure Package and the Prospectus
(exclusive of any amendments or supplements thereto subsequent to
the date of this Agreement) that, in your judgment, is material and
adverse and that makes it, in your judgment, impracticable to market
the Securities on the terms and in the manner contemplated in the
General Disclosure Package and the Prospectus.
(c) The Underwriters shall have received on the Closing Date an
opinion of ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP, outside counsel for the Company,
dated the Closing Date, to the effect that:
(i) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of
Delaware;
(ii) The Company has corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the Registration Statement, General Disclosure Package
and the Prospectus;
(iii) The Indenture has been duly qualified under the Trust
Indenture Act, has been duly authorized, executed and delivered by
the Company and is a valid and binding agreement of the Company,
enforceable in accordance with its terms except as (A) the
enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (B) rights of
acceleration and the availability of equitable remedies may be
limited by equitable principles of general applicability;
(iv) The Securities have been duly authorized by all necessary
corporate action, have been executed, authenticated, issued and
delivered and are entitled to the benefits of the Indenture and are
valid and binding obligations of the Company, enforceable in
accordance with their terms except as (A) the enforceability thereof
may be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and (B) rights of acceleration and the
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availability of equitable remedies may be limited by equitable
principles of general applicability; and the Securities and the
Indenture will conform to the information in the General Disclosure
Package and will conform in all material respects to the
descriptions thereof in the Prospectus;
(v) No consent, approval, authorization or order of, or filing
with, any governmental agency or body or any court is required for
the consummation of the transactions contemplated by this Agreement
in connection with the issuance or sale of the Securities by the
Company, except such as have been obtained and made under the
Securities Act and such as may be required under state securities
and insurance laws, and the execution and delivery of this Agreement
and the consummation of the transactions herein contemplated will
not conflict with or constitute a breach of, or default under, the
certificate of incorporation or by-laws of the Company;
(vi) The Registration Statement has become effective under the
Securities Act, the Prospectus was filed with the Commission
pursuant to the subparagraph of Rule 424(b) specified in such
opinion on the date specified therein, and, to the best of the
knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement or any part thereof has
been issued and no proceedings for that purpose have been instituted
or are pending or contemplated under the Securities Act, and the
Registration Statement and the Prospectus (but not including the
Form T-1 heretofore referred to or any document incorporated by
reference in the Registration Statement or the Prospectus), as of
the date of this Agreement, and any amendment or supplement thereto,
and as of its date, complied as to form in all material respects
with the requirements of the Securities Act and the Rules and
Regulations; it being understood that such counsel need express no
opinion as to the financial statements or other financial data
contained in the Registration Statement or the Prospectus;
(vii) This Agreement has been duly authorized, executed and
delivered by the Company;
(viii) The information in the Prospectus and the General
Disclosure Package under the captions "Description of the Debt
Securities," "Description of Notes," "Plan of Distribution" and
"Underwriters," to the extent that such information is applicable to
the Securities and constitutes matter of law or legal conclusions or
descriptions of documents referred to therein, has been reviewed by
such counsel and is correct in all material respects; and
(ix) The Company is not and, after giving effect to the
offering and sale of the Securities and the application of the
proceeds thereof as described in the General Disclosure Package and
the Prospectus, will not be an "investment company" as defined in
the Investment Company Act of 1940.
-14-
The opinion of ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP described in this
Section 6(c) above shall be rendered to the Underwriters at the request of
the Company and shall so state therein.
In rendering such opinions, such counsel may state that (i) its
opinion is limited to matters governed by the Federal laws of the United
States of America, the laws of the State of New York and the corporate law
of the State of Delaware and (ii) it has relied, as to matters of fact to
the extent it deems proper, on certificates of responsible officers of the
Company or public officials. In addition to the matters set forth above,
such counsel shall state that it has no reason to believe that (x) the
Registration Statement, as of its effective date relating to the
Securities or as of the Closing Date, or any amendment thereto, as of its
effective time or as of the Closing Date, contained any untrue statement
of a material fact or omitted to state any material fact required to be
stated therein or necessary to make the statements therein not misleading
or (y) the Prospectus, as of its date or as of such Closing Date, or any
amendment or supplement thereto, as of its date or as of the Closing Date,
contained any untrue statement of a material fact or omitted to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading or
(z) the General Disclosure Package and the Prospectus, as of the
Applicable Time or as of the Closing Date, contained any untrue statement
of a material fact or omitted to state any 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 view as to (A) the financial statements or other
financial data contained in the Registration Statement or the Prospectus
and (B) that part of the Registration Statement that constitutes the Form
T-1 heretofore referred to.
(d) The Underwriters shall have received on the Closing Date an
opinion of ▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Senior Vice President - General Counsel and
Secretary of the Company, dated the Closing Date, to the effect that:
(i) The Company has an authorized capitalization as is set
forth in the General Disclosure Package and the Prospectus;
(ii) The Company is duly qualified to do business as a foreign
corporation in good standing in all other jurisdictions in which its
ownership or lease of property or the conduct of its business
requires such qualification, except where the failure to be so
qualified would not individually or in the aggregate have a Material
Adverse Effect;
(iii) Each Significant Subsidiary of the Company has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation, has
the corporate power and authority to own, lease and operate its
properties and to conduct the business described in the Registration
Statement, General Disclosure Package and the Prospectus and, to the
extent applicable, is duly qualified as a foreign corporation to
transact business and is in good standing as such in each
jurisdiction in which it owns or leases substantial properties or in
which the conduct of its business requires such
-15-
qualification (except in such jurisdictions where the failure to be
so qualified would not individually or in the aggregate have a
Material Adverse Effect) (such counsel may note in his opinion that
insurance laws of certain of such jurisdictions where the
Significant Subsidiaries hold an insurance license do not require
such due qualification as a foreign corporation); except as set
forth in the Registration Statement, General Disclosure Package and
the Prospectus, all of the issued and outstanding shares of capital
stock of each Significant Subsidiary have been duly authorized and
validly issued and are owned directly or indirectly by the Company,
free and clear of any pledges, liens, encumbrances, claims or
equities; and all such shares are fully paid and nonassessable;
(iv) There are no contracts, agreements or understandings
known to such counsel between the Company and any person granting
such person the right to require the Company to file a registration
statement under the Securities Act with respect to any securities of
the Company owned or to be owned by such person or to require the
Company to include such securities in the securities registered
pursuant to the Registration Statement or in any securities being
registered pursuant to any other registration statement filed by the
Company under the Securities Act;
(v) To the best of such counsel's knowledge, there are no
licenses, franchises, contracts, indentures, mortgages, loan
agreements, notes, leases or other instruments required to be
described in the Registration Statement or to be filed as an exhibit
thereto other than those described therein or filed or incorporated
by reference as exhibits thereto;
(vi) The execution and delivery of, and the performance by the
Company of its obligations under, this Agreement, the Indenture and
the Securities will not result in a breach or violation of any of
the terms and provisions of, or constitute a default under, any
statute, any rule, regulation or order of any governmental agency or
body or any court having jurisdiction over the Company or any
Significant Subsidiary of the Company or the charter or by-laws of
any such subsidiary, or, to the best of such counsel's knowledge,
any of their material properties, or any material agreement,
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Company or any such subsidiary is a party or
by which the Company or any such subsidiary is bound or to which any
of the properties of the Company or any such subsidiary is subject;
(vii) The Company has made all required filings under
applicable insurance holding company statutes, and has received
approvals of acquisition of control and/or affiliate transactions,
in each jurisdiction in which such filings or approvals are
required, except where the failure to have made such filings or
receive such approvals in any such jurisdiction would not reasonably
be expected to have individually or in the aggregate a Material
Adverse Effect; each of the Insurance Subsidiaries is duly organized
and licensed as an insurance or reinsurance company in its
respective jurisdiction of incorporation, and each such
-16-
Insurance Subsidiary owns the Insurance Licenses in each other
jurisdiction in which such licensing or authorization is required,
except where the failure to be so licensed or authorized in any such
jurisdiction would not reasonably be expected to have individually
or in the aggregate a Material Adverse Effect; there is no pending
or, to the best of such counsel's knowledge, threatened action,
suit, proceeding or investigation that would be reasonably likely to
lead to the revocation, termination or suspension of any such
Insurance Licenses, the revocation, termination or suspension of
which would reasonably be expected to have individually or in the
aggregate a Material Adverse Effect; and except as disclosed in the
General Disclosure Package and the Prospectus, no insurance
regulatory agency or body has issued any order or decree impairing,
restricting or prohibiting the payment of dividends of any Company
subsidiary to its respective parent which would reasonably be
expected to have individually or in the aggregate a Material Adverse
Effect;
(viii) Except as would not individually or in the aggregate
have a Material Adverse Effect and except as described in the
General Disclosure Package and the Prospectus, (i) to the best of
such counsel's knowledge, there are no legal or governmental
proceedings pending or threatened which are required to be disclosed
in the Registration Statement, other than those disclosed therein,
and (ii) there are no pending legal or governmental proceedings, to
the best of such counsel's knowledge, to which the Company or any
subsidiary is a party or of which any of their property is the
subject which are not described in the Registration Statement but
are required to be so described in the Registration Statement,
including ordinary routine litigation incidental to the business;
(ix) The documents incorporated by reference in the Prospectus
pursuant to Item 12 of Form S-3 under the Securities Act (other than
the financial statements, supporting schedules and other financial
information included or incorporated by reference therein, as to
which no opinion need to be rendered), at the time they were filed
with the Commission or delivered to the security holders, as the
case may be, complied as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations
thereunder; and
(x) The descriptions in the Registration Statement, Prospectus
and General Disclosure Package of legal and governmental proceedings
and contracts and other documents are accurate in all material
respects and fairly present the information required to be shown;
and, to the best of such counsel's knowledge, no stop order
suspending the effectiveness of the Registration Statement or any
part thereof has been issued and no proceedings for that purpose
have been instituted or are pending or contemplated under the
Securities Act.
In rendering such opinions, such counsel may state that (i) its
opinion is limited to matters governed by the Federal laws of the United
States of America, the laws of the State of New York and the corporate law
of the State of Delaware and (ii) it has relied, as to matters of fact to
the extent it deems proper, on certificates of responsible officers of the
Company or public officials. In addition to the matters set forth above,
such counsel
-17-
shall state that it has no reason to believe that (x) the Registration
Statement, as of its effective date relating to the Securities or as of
the Closing Date, or any amendment thereto, as of its effective time or as
of the Closing Date, contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or
necessary to make the statements therein not misleading or (y) the
Prospectus, as of its date or as of such Closing Date, or any amendment or
supplement thereto, as of its date or as of the Closing Date, contained
any untrue statement of a material fact or omitted to state any material
fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading or (z) the
General Disclosure Package and the Prospectus, as of the Applicable Time
or as of the Closing Date, contained any untrue statement of a material
fact or omitted to state any 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 view as to (A) the financial statements or other financial data
contained in the Registration Statement or the Prospectus and (B) that
part of the Registration Statement that constitutes the Form T-1
heretofore referred to.
(e) The Underwriters shall have received on the Closing Date an
opinion of LeBoeuf, Lamb, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, counsel for the
Underwriters, dated the Closing Date, with respect to the incorporation of
the Company, the execution and delivery of this Agreement, the
qualification, execution, delivery and enforceability of the Indenture,
the authorization, validity and enforceability of the Securities, the
Registration Statement, the Prospectus, the General Disclosure Package and
other related matters as the Representatives may require, and the Company
shall have furnished to such counsel such documents as they request for
the purpose of enabling them to pass upon such matters.
(f) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date, of the President or any Vice
President and a principal financial or accounting officer of the Company
in which such officers, to the best of their knowledge and after
reasonable investigation, shall state that the representations and
warranties of the Company in this Agreement are true and correct, that the
Company has complied with all agreements and satisfied all conditions on
its part to be performed or satisfied hereunder at or prior to the Closing
Date, that no stop order suspending the effectiveness of the Registration
Statement or of any part thereof has been issued and no proceedings for
that purpose have been instituted or are contemplated by the Commission
and that, subsequent to the date of the most recent financial statements
in the General Disclosure Package and the Prospectus, (i) there has not
occurred any downgrading, nor has any notice been given of any intended or
potential downgrading or any review for a possible change that does not
indicate the direction of the possible change, in the rating accorded any
of the Company's securities by ▇▇▇▇▇'▇ Investors Service, Inc. or Standard
& Poor's Ratings Group, a division of McGraw Hill, Inc., and (ii) there
has been no material adverse change, nor any development or event
involving a prospective material adverse change, in the condition
(financial or other), business, properties or results of operations of the
Company and its subsidiaries taken as a whole except as set forth in or
contemplated by the Prospectus or as described in such certificate.
-18-
(g) The Underwriters shall have received on the date of this
Agreement a letter in form and substance agreed to by LeBoeuf, Lamb,
▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, counsel for the Underwriters, from KPMG LLP,
independent public accountants, containing statements and information of
the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain
financial information contained in the Prospectus and General Disclosure
Package, which letter shall use a "cut-off date" not earlier than the date
hereof (the "COMFORT LETTER"). The Underwriters shall also have received
on the Closing Date a "bring down" comfort letter from KPMG LLP in the
form of Exhibit A hereto.
7. Indemnity and Contribution. (a) The Company agrees to indemnify
and hold harmless each Underwriter, each person, if any, who controls any
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act and each affiliate of any Underwriter within the
meaning of Rule 405 under the Securities Act from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or any amendment thereof, any preliminary prospectus or any Statutory
Prospectus, the Prospectus or any Issuer Free Writing Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through you expressly
for use therein, it being understood and agreed that the only such information
furnished by any Underwriter consists of the information described as such in
subsection (b) below.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Registration Statement and each person, if any, who controls the Company
within the meaning of either Section 15 of the Securities Act or Section
20 of the Exchange Act to the same extent as the foregoing indemnity from
the Company to such Underwriter, but only with reference to information
relating to such Underwriter furnished to the Company in writing by such
Underwriter through you expressly for use in the Registration Statement,
any preliminary prospectus, any Statutory Prospectus, the Prospectus or
any Issuer Free Writing Prospectus or any amendments or supplements
thereto.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of
which indemnity may be sought pursuant to Section 7(a) or 7(b), such
person (the "INDEMNIFIED PARTY") shall promptly notify the person against
whom such indemnity may be sought (the "INDEMNIFYING PARTY") in writing
and the indemnifying party, upon request of the indemnified party, shall
retain counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the indemnifying party may
designate in such proceeding and shall pay the fees and disbursements of
such counsel related to such proceeding. In any such proceeding, any
indemnified party shall have the right to retain its own counsel, but the
-19-
fees and expenses of such counsel shall be at the expense of such
indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii)
the named parties to any such proceeding (including any impleaded parties)
include both the indemnifying party and the indemnified party and
representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. It is
understood that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the fees and
expenses of more than one separate firm (in addition to any local counsel)
for all such indemnified parties and that all such fees and expenses shall
be reimbursed as they are incurred. Such firm shall be designated in
writing by the Representatives, in the case of parties indemnified
pursuant to Section 7(a), and by the Company, in the case of parties
indemnified pursuant to Section 7(b). The indemnifying party shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment
for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as
contemplated by the second and third sentences of this paragraph, the
indemnifying party agrees that it shall be liable for any settlement of
any proceeding effected without its written consent if (i) such settlement
is entered into more than 30 days after receipt by such indemnifying party
of the aforesaid request and (ii) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request prior to
the date of such settlement. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of
any pending or threatened proceeding in respect of which any indemnified
party is or could have been a party and indemnity could have been sought
hereunder by such indemnified party, unless such settlement (i) includes
an unconditional release of such indemnified party from all liability on
claims that are the subject matter of such proceeding and (ii) does not
include a statement as to or in admission of fault, culpability or a
failure to act, by or on behalf of any indemnified party.
(d) To the extent the indemnification provided for in Section 7(a)
or 7(b) is unavailable to an indemnified party or insufficient in respect
of any losses, claims, damages or liabilities referred to therein, then
each indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand and the
Underwriters on the other hand from the offering of the Securities or (ii)
if the allocation provided by clause 7(d)(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 7(d)(i) above but also the
relative fault of the Company on the one hand and of the Underwriters on
the other hand in connection with the statements or omissions that
resulted in such losses, claims, damages or liabilities, as well as any
other relevant equitable considerations. The relative benefits received by
the Company on the one hand and the Underwriters on the other hand in
connection with the offering of the Securities shall be deemed to be in
the same
-20-
respective proportions as the net proceeds from the offering of the
Securities (before deducting expenses) received by the Company and the
total underwriting discounts and commissions received by the Underwriters,
in each case as set forth in the table on the cover of the Prospectus,
bear to the aggregate Public Offering Price of the Securities. The
relative fault of the Company on the one hand and the Underwriters on the
other hand shall be determined by reference to, among other things,
whether 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 the Company or by the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The Underwriters'
respective obligations to contribute pursuant to this Section 7 are
several in proportion to the respective principal amount of Securities
they have purchased hereunder, and not joint.
(e) The Company and the Underwriters agree that it would not be just
or equitable if contribution pursuant to this Section 7 were determined by
pro rata allocation (even if the Underwriters were treated as one entity
for such purpose) or by any other method of allocation that does not take
account of the equitable considerations referred to in Section 7(d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, 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 7, no Underwriter
shall be required to contribute any amount in excess of the amount by
which the total price at which the 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. The remedies provided for in this Section 7 are not
exclusive and shall not limit any rights or remedies which may otherwise
be available to any indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in this
Section 7 and the representations, warranties and other statements of the
Company contained in this Agreement shall remain operative and in full
force and effect regardless of (i) any termination of this Agreement, (ii)
any investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter or by or on behalf of the Company, its
officers or directors or any person controlling the Company and (iii)
acceptance of and payment for any of the Securities.
8. Termination. This Agreement shall be subject to termination by
notice given by you to the Company, if: (a) after the execution and delivery of
this Agreement and prior to the Closing Date (i) trading generally shall have
been suspended or materially limited on or by, as the case may be, any of the
New York Stock Exchange, the American Stock Exchange or the National Association
of Securities Dealers, Inc., (ii) trading of any securities of the Company shall
have been suspended on any exchange or in any over-the-counter market, (iii) a
material
-21-
disruption in securities settlement, payment or clearance services in the United
States shall have occurred, (iv) any moratorium on commercial banking activities
in New York shall have been declared by either Federal or New York State
authorities, or (v) there shall have occurred any outbreak or escalation of
hostilities or, any change in financial markets or any calamity or crisis that,
in your judgment, is material and adverse; and (b) in the case of any of the
events specified in clauses 8(a)(i) through 8(a)(v), such event, singly or
together with any other such event, makes it, in your judgment, impracticable or
inadvisable to proceed with the offer, sale or delivery of the Securities on the
terms and in the manner contemplated in the General Disclosure Package and the
Prospectus.
9. Effectiveness; Defaulting Underwriters. This Agreement shall
become effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date, any one or more of the Underwriters shall
fail or refuse to purchase Securities that it has or they have agreed to
purchase hereunder on such date, and the aggregate principal amount of
Securities which such defaulting Underwriter or Underwriters agreed but failed
or refused to purchase is not more than one-tenth of the aggregate principal
amount of the Securities to be purchased on such date, the other Underwriters
shall be obligated severally in the proportions that the principal amount of
Securities set forth opposite their respective names in Schedule I bears to the
aggregate principal amount of Securities set forth opposite the names of all
such non-defaulting Underwriters, or in such other proportions as you may
specify, to purchase the Securities which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date; provided,
that in no event shall the principal amount of Securities that any Underwriter
has agreed to purchase pursuant to this Agreement be increased pursuant to this
Section 9 by an amount in excess of one-ninth of such principal amount of
Securities without the written consent of such Underwriter. If, on the Closing
Date, any Underwriter or Underwriters shall fail or refuse to purchase
Securities and the aggregate principal amount of Securities with respect to
which such default occurs is more than one-tenth of the aggregate principal
amount of Securities to be purchased, and arrangements satisfactory to you and
the Company for the purchase of such Securities are not made within 36 hours
after such default, this Agreement shall terminate without liability on the part
of any non-defaulting Underwriter or the Company. In any such case either you 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 General Disclosure Package and the Prospectus
or in any other documents or arrangements may be effected. Any action taken
under this paragraph shall not relieve any defaulting Underwriter from liability
in respect of any default of such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder.
-22-
10. Notices. All communications hereunder will be in writing and, if
sent to the Underwriters, will be mailed, delivered or telegraphed and confirmed
to the Representatives, c/o Citigroup Global Markets Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: General Counsel or, if sent to the Company,
will be mailed, delivered or telegraphed and confirmed to it at address and
numbers of the Company set forth in the Registration Statement, Attention: ▇▇▇
▇. ▇▇▇▇▇▇▇▇, Senior Vice President - General Counsel and Secretary; provided,
however, that any notice to an Underwriter pursuant to Section 7 will be mailed,
delivered or telegraphed and confirmed to such Underwriter.
11. Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
12. Applicable Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.
13. Headings. The headings of the sections of this Agreement have
been inserted for convenience of reference only and shall not be deemed a part
of this Agreement.
14. Absence of Fiduciary Relationship. The Company acknowledges and
agrees that:
(a) The Representatives have been retained solely to act as
underwriters in connection with the sale of the Securities and that no
fiduciary, advisory or agency relationship between the Company and the
Representatives has been created in respect of any of the transactions
contemplated by this Agreement or the Prospectus, irrespective of whether
the Representatives have advised or are advising the Company on other
matters;
(b) The price of the Securities set forth in this Agreement was
established by the Company following discussions and arms-length
negotiations with the Representatives and the Company is capable of
evaluating and understanding and understands and accepts the terms, risks
and conditions of the transactions contemplated by this Agreement;
(c) The Company has been advised that the Representatives and their
affiliates are engaged in a broad range of transactions which may involve
interests that differ from those of the Company and that the
Representatives have no obligation to disclose such interests and
transactions to the Company by virtue of any fiduciary, advisory or agency
relationship; and
(d) The Company waives, to the fullest extent permitted by law, any
claims it may have against the Representatives for breach of fiduciary
duty or alleged breach of fiduciary duty and agrees that the
Representatives shall have no liability (whether direct or indirect) to
the Company in respect of such a fiduciary duty claim or to any person
asserting a fiduciary duty or claim on behalf of or in right if the
Company, including stockholders, employees or creditors of the Company.
-23-
Very truly yours,
▇. ▇. ▇▇▇▇▇▇▇ CORPORATION
By: /s/ W. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇.
--------------------------------
Name: W. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇.
Title: Executive Vice President
Accepted as of the date hereof
CITIGROUP GLOBAL MARKETS INC.
CREDIT SUISSE SECURITIES (USA) LLC
Acting severally on behalf
of themselves and the
several Underwriters named
in Schedule I hereto
By: CITIGROUP GLOBAL MARKETS INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
By: CREDIT SUISSE SECURITIES (USA) LLC
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Director
SCHEDULE I
PRINCIPAL AMOUNT OF
SECURITIES
UNDERWRITER TO BE PURCHASED
Credit Suisse Securities (USA) LLC................................... $125,000,000
Citigroup Global Markets Inc......................................... $125,000,000
Total.................................. $250,000,000
============
SCHEDULE II
1. Statutory Prospectus Included in the General Disclosure Package
a. Prospectus, dated September 29, 2005, included in the Registration
Statement, as supplemented by the Preliminary Prospectus Supplement,
dated February 9, 2007.
2. General Use Issuer Free Writing Prospectuses Included in the General
Disclosure Package
a. Final term sheet dated February 9, 2007, a copy of which is attached
hereto.
3. Other Information Included in the General Disclosure Package
a. None.
EXHIBIT A
FORM OF BRING-DOWN COMFORT LETTER
This draft is furnished solely for the purpose of indicating the form of the
letter that we would expect to be able to furnish the addressees in response to
their request, the matters expected to be covered in the letter, and the nature
of the procedures that we would expect to carry out with respect to such
matters. Based on our discussions with the addressees, it is our understanding
that the procedures outlined in this draft letter are those they wish us to
follow. Unless the addressees inform us otherwise, we shall assume that there
are not additional procedures they wish us to follow. The text of the letter
itself will depend, of course upon the results of the procedures, which we would
not expect to complete until shortly before the letter is given and in no event
before the cut-off date indicated herein.
February 14, 2007
Credit Suisse Securities (USA) LLC
Eleven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Citigroup Global Markets Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇. ▇. ▇▇▇▇▇▇▇ Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear Sirs:
We have audited the consolidated balance sheets of ▇. ▇. ▇▇▇▇▇▇▇ Corporation
(the "Company") and subsidiaries as of December 31, 2005 and 2004, and the
related consolidated statements of income, stockholders' equity, comprehensive
income and cash flows for each of the years in the three-year period ended
December 31, 2005, and the related financial statement schedules, management's
assessment of the effectiveness of internal control over financial reporting as
of December 31, 2005, and the effectiveness of internal control over financial
reporting as of December 31, 2005. The consolidated financial statements,
financial statement schedules and management's assessment of the effectiveness
of internal control over financial reporting referred to above are incorporated
by reference or included in the Company's annual report on Form 10-K for the
year ended December 31, 2005, and incorporated by reference in the registration
statement No. 333-128546 on Form S-3 filed by the Company under the Securities
Act of 1933 (the "Act"); our reports with respect thereto, are also incorporated
by reference in that registration statement. The registration statement is
herein referred to as the "registration statement".
Page 2
Credit Suisse Global Markets (USA) LLC
Citigroup Global Markets Inc.
▇. ▇. ▇▇▇▇▇▇▇ Corporation
February 14, 2007
In connection with the registration statement:
1. We are independent certified public accountants with respect to the
Company within the meaning of the Act and the applicable rules and
regulations thereunder adopted by the Securities and Exchange Commission
(the "SEC") and the Public Company Accounting Oversight Board (United
States) ("PCAOB").
2. In our opinion, the consolidated financial statements and financial
statement schedules audited by us and incorporated by reference in the
registration statement comply as to form in all material respects with the
applicable accounting requirements of the Act and the Securities Exchange
Act of 1934 and the related published rules and regulations adopted by the
SEC.
3. We have not audited any financial statements of the Company,
management's assessment of the effectiveness of internal control over
financial reporting, or the effectiveness of internal control over
financial reporting as of any date or for any period subsequent to
December 31, 2005; although we have conducted an audit for the year ended
December 31, 2005, the purpose (and therefore the scope) of the audit was
to enable us to express our opinion on the consolidated financial
statements as of December 31, 2005, and for the year then ended,
management's assessment of the effectiveness of internal control over
financial reporting as of December 31, 2005, and the effectiveness of
internal control over financial reporting as of December 31, 2005, but not
on the consolidated financial statements or internal control over
financial reporting for any interim period within that year. Therefore, we
are unable to and do not express any opinion on the unaudited condensed
consolidated balance sheets as of March 31, 2006, June 30, 2006 and
September 30, 2006, the unaudited condensed consolidated statements of
income for the three-month periods ended March 31, 2006 and 2005, the
three and six-month periods ended June 30, 2006 and 2005 and the three and
nine-month periods ended September 30, 2006 and 2005 and the unaudited
condensed consolidated statements of stockholders' equity and cash flows
for the three-month periods ended March 31, 2006 and 2005, the six-month
periods ended June 30, 2006 and 2005 and the nine-month periods ended
September 30, 2006 and 2005 included in the Company's quarterly reports on
Form 10-Q, incorporated by reference in the registration statement, or on
the financial position, results of operations, cash flows or the
effectiveness of internal control over financial reporting as of any date
or for any period subsequent to December 31, 2005.
4. For purposes of this letter, we have read the 2006 minutes of the
meetings of the stockholders, the board of directors and the audit
committee of the Company as set forth in the minute books at February 8,
2007, officials of the Company having advised us that the minutes of all
such meetings through that date, except for minutes of the November 1,
2006 meeting of the Board of Directors and the November 1, 2006 and
January 5, 2007 meetings of the Audit Committee, which are still in draft
form and not provided for us to read, were set forth therein; we have
carried out other procedures to February 9, 2007 as follows (our work did
not extend to February 14, 2007):
Page 3
Credit Suisse Global Markets (USA) LLC
Citigroup Global Markets Inc.
▇. ▇. ▇▇▇▇▇▇▇ Corporation
February 14, 2007
a. With respect to the three-month periods ended March 31, 2006
and 2005, the three and six-month periods ended June 30, 2006
and 2005 and the three and nine-month periods ended September
30, 2006 and 2005 for the Company we have:
(i) Performed the procedures specified by the PCAOB for a review
of interim financial information as described in SAS No. 100,
Interim Financial Information, on the unaudited condensed
consolidated financial statements for the periods described in
paragraph 3, included in the Company's quarterly reports on
Form 10-Q for the quarters ended March 31, 2006, June 30, 2006
and September 30, 2006 incorporated by reference in the
registration statement.
(ii) Inquired of certain officials of the Company who have
responsibility for financial and accounting matters whether
the unaudited condensed consolidated financial statements
referred to in 4a(i) comply as to form in all material
respects with the applicable accounting requirements of the
Securities Exchange Act of 1934 as it applies to Form 10-Q and
the related rules and regulations adopted by the SEC.
b. With respect to the period from October 1, 2006 to December
31, 2006, we have:
(i) Read the unaudited condensed consolidated financial statements
of the Company and subsidiaries for the three-month period and
the year ended December 31, 2006 furnished to us by the
Company, officials of the Company having advised us that no
such financial statements as of any date or for any period
subsequent to December 31, 2006, were available.
(ii) Inquired of certain officials of the Company who have
responsibility for financial and accounting matters whether
the unaudited consolidated financial statements referred to in
4b(i) are stated on a basis substantially consistent with that
of the audited consolidated financial statements incorporated
by reference in the registration statement. These officials
have informed us that these financial statements are stated on
a basis substantially consistent with that of the audited
consolidated financial statements incorporated by reference in
the registration statement.
The foregoing procedures do not constitute an audit conducted in
accordance with the standards of the PCAOB. Also, they would not
necessarily reveal matters of significance with respect to the comments in
the following paragraph. Accordingly, we make no representations about the
sufficiency of the foregoing procedures for your purposes.
5. Nothing came to our attention as a result of the foregoing procedures,
however, that caused us to believe that:
Page 4
Credit Suisse Global Markets (USA) LLC
Citigroup Global Markets Inc.
▇. ▇. ▇▇▇▇▇▇▇ Corporation
February 14, 2007
a.(i) Any material modifications should be made to the unaudited condensed
consolidated financial statements described in 4a(i), incorporated
by reference in the registration statement, for them to be in
conformity with U.S. generally accepted accounting principles
("GAAP").
a.(ii) The unaudited condensed consolidated financial statements described
in 4a(i) do not comply as to form in all material respects with the
applicable accounting requirements of the Securities Exchange Act of
1934 as it applies to Form 10-Q and the related rules and
regulations adopted by the SEC.
b. At December 31, 2006 there was (a) any change in capital stock,
except for stock issued in this time period under existing employee
stock incentive plans, increase in long-term debt, except for
amortization of discount, or any decreases in consolidated total
assets or stockholders' equity, excluding the effect of the change
due to ▇▇▇▇ to market of the Company's investment portfolio in
accordance with Financial Accounting Standards No. 115, Accounting
for Certain Investments in Debt and Equity Securities, as compared
with amounts shown in the September 30, 2006 unaudited condensed
consolidated balance sheet incorporated by reference in the
registration statement, or (b) for the period from October 1, 2006
to December 31, 2006 there were any decreases, as compared with the
corresponding period in the preceding year, in consolidated net
premiums earned or total net income, except in all instances for
changes, increases or decreases that the registration statement
discloses have occurred or may occur.
6. As mentioned in 4b(i), Company officials have advised us that no
consolidated financial statements of the Company as of any date or for any
period subsequent to December 31, 2006 are available; accordingly, the
procedures carried out by us with respect to changes in consolidated
financial statement items of the Company after December 31, 2006 have, of
necessity, been limited. We have inquired of certain officials of the
Company who have responsibility for financial and accounting matters
regarding whether at February 9, 2007 there was (a) any change in capital
stock, except for stock issued in this time period under existing employee
stock incentive plans, increase in long-term debt, except for amortization
of discount, or any decreases in consolidated total assets or
stockholders' equity, excluding the effect of the change due to ▇▇▇▇ to
market of the Company's investment portfolio in accordance with Financial
Accounting Standards No. 115, Accounting for Certain Investments in Debt
and Equity Securities, as compared with amounts shown on the December 31,
2006 unaudited consolidated balance sheet furnished to us by the Company
or (b) for the period from January 1, 2007 to February 9, 2007 there were
any decreases, as compared with the corresponding period in the preceding
year, in consolidated net premiums earned or total net income. On the
basis of these inquiries and reading of the minutes as described in 4,
nothing came to our attention that caused us to believe that there were
any such changes, increases, or decreases.
Page 5
Credit Suisse Global Markets (USA) LLC
Citigroup Global Markets Inc.
▇. ▇. ▇▇▇▇▇▇▇ Corporation
February 14, 2007
7. For purposes of this letter, we have also read the circled items
identified by you on the attached copy of the registration statement and
pages of the Annual Report, the Annual Report on Form 10-K, the quarterly
reports on Form 10-Q for the three-month period ended March 31, 2006,
three and six-month periods ending June 30, 2006 and the three and
nine-month periods ending September 30, 2006 and the news release dated
February 8, 2007, as filed with the SEC on Form 8-K (announcing earnings
of ▇.▇. ▇▇▇▇▇▇▇ Corporation for the three months and year ending December
31, 2006) and have performed the following procedures, which were applied
as indicated with respect to the symbols explained below:
A. Compared specified dollar amounts, number of shares, percentages or
ratios to the Company's audited consolidated financial statements or
to dollar amounts, number of shares, percentages, or ratios derived
from the Company's audited financial statements incorporated by
reference in the registration statement and found them to be in
agreement.
B. Compared specified dollar amounts, number of shares, percentages, or
ratios to the corresponding dollar amounts, number of shares,
percentages, or ratios in the Company's unaudited consolidated
interim financial statements for the periods incorporated by
reference in the registration statement and found them to be in
agreement.
B-1 Compared specified dollar amounts to dollar amounts in, or derived
from, the unaudited condensed, consolidated financial statements
referred to in 4(b)(i) and found them to be in agreement.
C. Compared specified dollar amounts, number of shares, percentages or
ratios to dollar amounts, number of shares, percentages or ratios in
schedules or analyses prepared by the Company and found them to be
in agreement.
C-1. Compared specified dollar amounts or percentages to dollar amounts
or percentages in schedules or analyses prepared by the Company and
found them to be in agreement. Officials of the Company stated that
this financial information is not presented in conformity with U.S.
generally accepted accounting principles. We make no comment as to
the appropriateness of the presentation or the definition used in
the classification of these items.
D. Compared specified dollar amounts, number of shares, percentages or
ratios to the Company's audited consolidated financial statements or
to dollar amounts, number of shares, percentages, or ratios derived
from the Company's audited financial statements not included or
incorporated by reference in the registration statement and found
them to be in agreement.
Page 6
Credit Suisse Global Markets (USA) LLC
Citigroup Global Markets Inc.
▇. ▇. ▇▇▇▇▇▇▇ Corporation
February 14, 2007
E. Proved arithmetic accuracy of the specified dollar amounts, number
of shares, percentages and ratios based on the data in the
above-mentioned financial statements, schedules or analyses.
F. Proved arithmetic accuracy of the dollar amount in the caption
"total" by adding the dollar amounts presented in the column above.
G. We agreed the dollar amount in the caption "total capitalization" to
the total of the dollar amounts "total stockholders' equity" plus
"senior notes and other debt" plus "junior subordinated debentures"
presented in the Company's unaudited consolidated interim balance
sheets for the periods incorporated by reference in the registration
statement and found them to be in agreement.
8. Our audits of the consolidated financial statements for the periods
referred to in the introductory paragraph of this letter comprised audit
tests and procedures deemed necessary for the purpose of expressing an
opinion on such financial statements taken as a whole. For none of the
periods referred to therein, or any other period, did we perform audit
tests for the purpose of expressing an opinion on individual balances of
accounts or summaries of selected transactions such as those enumerated
above, and, accordingly, we express no opinion thereon.
9. It should be understood that we make no representations regarding
questions of legal interpretation or regarding the sufficiency for your
purposes of the procedures enumerated in the preceding paragraphs; also,
such procedures would not necessarily reveal any material misstatement of
the amounts or percentages referred to above. Further, we have addressed
ourselves solely to the foregoing data, included or incorporated by
reference in the registration statement and make no representations
regarding the adequacy of disclosure or regarding whether any material
facts have been omitted.
10. This letter is solely for the information of the addressees and to
assist the underwriters in conducting and documenting their investigation
of the affairs of the Company in connection with the offering of the
securities covered by the registration statement, and it is not to be
used, circulated, quoted, or otherwise referred to within or without the
underwriting group for any purpose, including but not limited to the
registration, purchase, or sale of securities, nor is it to be filed with
or referred to in whole or in part in the registration statement or any
other document, except that reference may be made to it in the
underwriting agreement or in any list of closing documents pertaining to
the offering of the securities covered by the registration statement.
11. We have no responsibility to update this letter for events and
circumstances occurring after February 9, 2007.
Very truly yours,
▇. ▇. ▇▇▇▇▇▇▇ CORPORATION
$250,000,000
6.250% SENIOR NOTES DUE FEBRUARY 15, 2037
FINAL TERM SHEET
Issuer: ▇. ▇. ▇▇▇▇▇▇▇ Corporation
Ratings: Baa2 / BBB+ / BBB (Stable / Stable / Stable)
Minimum Denomination: $1,000 x $1,000
Trade Date: February 9, 2007
Settlement Date: February 14, 2007 (T+3)
Maturity Date: February 15, 2037
Total Principal Amount: $250,000,000
Treasury Benchmark: UST 4.500% due 2/15/2036
Treasury Price: 93-29 (or 4.896%)
Re-offer Spread: +137 bps
Re-offer Yield to Maturity: 6.266%
Semi-annual Coupon: 6.250%
Public Offering Price: 99.784%
Make Whole Call Spread: +25 bps
Day Count Convention: 30/360 Semi-annual
Interest Payment Dates: Semi-annually on the 15th of February and August
(1st payment August 15, 2007)
Use Proceeds: For general corporate purposes, including the repayment of
indebtedness. Such indebtedness may include ▇. ▇. ▇▇▇▇▇▇▇
Corporation's $88.8 million of 9.875% senior notes, which
mature on May 15, 2008.
CUSIP / ISIN: ▇▇▇▇▇▇▇▇▇ / US084423AP79
Joint Bookrunners: Citigroup Global Markets Inc.
Credit Suisse Securities (USA) LLC
THE ISSUER HAS FILED A REGISTRATION STATEMENT (INCLUDING A PROSPECTUS) WITH THE
SEC FOR THE OFFERING TO WHICH THIS COMMUNICATION RELATES. BEFORE YOU INVEST, YOU
SHOULD READ THE PROSPECTUS IN THAT REGISTRATION STATEMENT AND OTHER DOCUMENTS
THE ISSUER HAS FILED WITH THE SEC FOR MORE COMPLETE INFORMATION ABOUT THE ISSUER
AND THIS OFFERING. YOU MAY GET THESE DOCUMENTS FOR FREE BY VISITING ▇▇▇▇▇ ON THE
SEC WEB SITE AT ▇▇▇.▇▇▇.▇▇▇. ALTERNATIVELY, CITIGROUP GLOBAL MARKETS INC., OR
CREDIT SUISSE SECURITIES (USA) LLC WILL ARRANGE TO SEND YOU THE PROSPECTUS IF
YOU REQUEST IT BY CALLING CITIGROUP GLOBAL MARKETS INC. TOLL-FREE AT
1-877-858-5407, OR CREDIT SUISSE SECURITIES (USA) LLC AT 1-800-221-1037.
