EXHIBIT 1.1
$350,000,000
The Valspar Corporation
$200,000,000 5.625% Notes due 2012
$150,000,000 6.050% Notes due 2017
UNDERWRITING AGREEMENT
April 12, 2007
Barclays Capital Inc.
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Wachovia Capital Markets, LLC
One Wachovia Center
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As Representatives of the several Underwriters
Ladies and Gentlemen:
The Valspar Corporation, a Delaware corporation (the "Company"),
proposes to sell to the several underwriters named in Schedule I hereto (the
"Underwriters"), for whom you (the "Representatives") are acting as
representatives, $200,000,000 aggregate principal amount of the Company's 5.625%
Notes due 2012 (the "2012 Notes") and $150,000,000 aggregate principal amount of
the Company's 6.050% Notes due 2017 (the "2017 Notes") (the "Securities"), to be
issued under an indenture, dated as of April 22, 2003, between the Company and
The Bank of New York Trust Company, N.A. (as successor to Bank One Trust
Company, N.A.), as trustee (the "Trustee"), as supplemented by a supplemental
indenture, dated as of the Closing Date (as defined below), between the Company
and the Trustee (as so supplemented, the "Indenture"). To the extent there are
no additional Underwriters listed on Schedule I other than you, the term
Representatives as used herein shall mean you, as Underwriters, and the terms
Representatives and Underwriters shall mean either the singular or plural as the
context requires.
Certain terms used herein are defined in Section 20 hereof.
Section 1. Representations and Warranties. The Company represents and
warrants to, and agrees with, each Underwriter as set forth below in this
Section 1.
(a) The Company meets the requirements for use of Form S-3 under the
Act and has prepared and filed with the Commission an automatic shelf
registration statement, as defined in Rule 405 (File No. 333-142058) on Form
S-3, including a related Base Prospectus, for registration under the Act of the
offering and sale of the Securities. Such Registration Statement,
including any amendments thereto filed prior to the Execution Time, became
effective upon filing. The Company may have filed with the Commission, as part
of an amendment to the Registration Statement or pursuant to Rule 424(b), one or
more preliminary prospectus supplements relating to the Securities, each of
which has previously been furnished to you. The Company will file with the
Commission a final prospectus supplement relating to the Securities in
accordance with Rule 424(b). As filed, such final prospectus supplement shall
contain all information required by the Act and the rules thereunder, and,
except to the extent the Representatives shall agree in writing to a
modification, shall be in all substantive respects in the form furnished to you
prior to the Execution Time or, to the extent not completed at the Execution
Time, shall contain only such specific additional information and other changes
(beyond that contained in the Base Prospectus and any Preliminary Prospectus) as
the Company has advised you, prior to the Execution Time, will be included or
made therein. The Registration Statement, at the Execution Time, meets the
requirements set forth in Rule 415(a)(1)(x).
Any reference herein to the Registration Statement, the Base
Prospectus, any Preliminary Prospectus or the Final Prospectus shall be deemed
to refer to and include the documents incorporated by reference therein pursuant
to Item 12 of Form S-3 which were filed under the Exchange Act on or before the
Effective Date of the Registration Statement or the issue date of the Base
Prospectus, any Preliminary Prospectus or the Final Prospectus, as the case may
be; and any reference herein to the terms "amend," "amendment" or "supplement"
with respect to the Registration Statement, the Base Prospectus, any Preliminary
Prospectus or the Final Prospectus shall be deemed to refer to and include the
filing of any document under the Exchange Act after the Effective Date of the
Registration Statement or the issue date of the Base Prospectus, any Preliminary
Prospectus or the Final Prospectus, as the case may be, deemed to be
incorporated therein by reference.
(b) On each Effective Date, the Registration Statement did, and when
the Final Prospectus is first filed in accordance with Rule 424(b) and on the
Closing Date (as defined herein), the Final Prospectus (and any supplement
thereto) will, comply in all material respects with the applicable requirements
of the Act, the Exchange Act and the Trust Indenture Act and the respective
rules thereunder; on each Effective Date and at the Execution Time, the
Registration Statement did not and will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein not misleading; on the
Effective Date and on the Closing Date the Indenture did or will comply in all
material respects with the applicable requirements of the Trust Indenture Act
and the rules thereunder; and on the date of any filing pursuant to Rule 424(b)
and on the Closing Date, the Final Prospectus (together with any supplement
thereto) will not include any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; provided,
however, that the Company makes no representations or warranties as to (i) that
part of the Registration Statement which shall constitute the Statement of
Eligibility and Qualification (Form T-1) under the Trust Indenture Act of the
Trustee or (ii) the information contained in or omitted from the Registration
Statement or the Final Prospectus (or any supplement thereto) in reliance upon
and in conformity with information furnished in writing to the Company by or on
behalf of any Underwriter through the Representatives specifically for inclusion
in the Registration Statement or the Final Prospectus (or any supplement
thereto), it
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being understood and agreed that the only such information furnished by or on
behalf of any Underwriter consists of the information described as such in
Section 8 hereof.
(c) The Disclosure Package and (ii) each electronic road show, when
taken together as a whole with the Disclosure Package, does not contain any
untrue statement of a material fact or omit 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. The preceding sentence does not apply to
statements in or omissions from the Disclosure Package based upon and in
conformity with written information furnished to the Company by any Underwriter
through the Representatives specifically for use therein, it being understood
and agreed that the only such information furnished by or on behalf of any
Underwriter consists of the information described as such in Section 8 hereof.
(d) At the time of filing the Registration Statement, (ii) at the time
of the most recent amendment thereto for the purposes of complying with Section
10(a)(3) of the Act (whether such amendment was by post-effective amendment,
incorporated report filed pursuant to Sections 13 or 15(d) of the Exchange Act
or form of prospectus), (iii) at the time the Company or any person acting on
its behalf (within the meaning, for this clause only, of Rule 163(c)) made any
offer relating to the Securities in reliance on the exemption in Rule 163, and
(iv) at the Execution Time (with such date being used as the determination date
for purposes of this clause (iv)), the Company was or is (as the case may be) a
"well-known seasoned issuer" as defined in Rule 405. The Company agrees to pay
the fees required by the Commission relating to the Securities within the time
required by Rule 456(b)(1) without regard to the proviso therein and otherwise
in accordance with Rules 456(b) and 457(r).
(e) 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 Securities and (ii) as of the Execution
Time (with such date being used as the determination date for purposes of this
clause (ii)), the Company was not and is not an Ineligible Issuer (as defined in
Rule 405), without taking account of any determination by the Commission
pursuant to Rule 405 that it is not necessary that the Company be considered an
Ineligible Issuer.
(f) Each Issuer Free Writing Prospectus and the final term sheet
prepared and filed pursuant to Section 5(b) hereto does not include any
information that conflicts with the information contained in the Registration
Statement, including any document incorporated therein by reference and any
prospectus supplement deemed to be a part thereof that has not been superseded
or modified. The foregoing sentence does not apply to statements in or omissions
from any Issuer Free Writing Prospectus based upon and in conformity with
written information furnished to the Company by any Underwriter through the
Representatives specifically for use therein, it being understood and agreed
that the only such information furnished by or on behalf of any Underwriter
consists of the information described as such in Section 8 hereof.
(g) The documents incorporated by reference in the Disclosure Package
and the Final Prospectus, when filed with the Commission, conformed or will
conform, as the case may be, in all material respects with the requirements of
the Exchange Act and, when read together with the other information in the
Disclosure Package and the Final Prospectus, did not or will not, as the case
may be, contain an untrue statement of a material fact or omit to state a
material fact
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required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
(h) The Company and its subsidiaries employ disclosure controls and
procedures that are designed to ensure that information required to be disclosed
by the Company in the reports that it files or submits under the Exchange Act is
properly and effectively recorded, processed, summarized and reported within the
time periods specified in applicable rules, regulations and forms promulgated by
the Commission and is properly and effectively accumulated and communicated to
the Company's officers, including its principal executive officer and principal
financial officer, as appropriate, to allow timely decisions regarding required
disclosure.
(i) The Company's historical financial statements and the related notes
thereto included or incorporated by reference in the Disclosure Package and the
Final Prospectus present fairly, in all material respects, the consolidated
financial position of the Company and its consolidated subsidiaries as of the
dates indicated and the consolidated results of their operations and the changes
in their consolidated cash flows for the periods specified; such financial
statements have been prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods covered thereby,
except as described in the notes to such financial statements; the other
historical financial information of the Company included or incorporated by
reference in the Disclosure Package and the Final Prospectus has been derived
from the accounting records of the Company and its subsidiaries and presents
fairly, in all material respects, the information shown thereby.
(j) The Company and its subsidiaries maintain a system of internal
accounting controls designed to provided reasonable assurances that (i)
transactions are executed in accordance with management's general or specific
authorization, (ii) transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets, (iii) access to assets is
permitted only in accordance with management's general or specific authorization
and (iv) the recorded accountability for material assets is compared with the
existing assets at reasonable intervals and appropriate action is taken with
respect to any material differences.
(k) Since the date of the most recent financial statements of the
Company included or incorporated by reference in the Disclosure Package and the
Final Prospectus, (i) there has not been any material change in the capital
stock of the Company or any of its significant subsidiaries (as defined in Rule
1-02 of Regulation S-X under the Securities Act) or long-term debt of the
Company or any of its subsidiaries (except for (A) any subsequent issuances of
capital stock pursuant to the exercise of outstanding stock options or under
existing officer, director or employee benefit plans and options granted under,
or contracts or commitments pursuant to, existing stock option or officer,
director or employee benefit plans and (B) any repurchases of common stock
pursuant to stock repurchase programs approved by the Company's Board of
Directors) or any dividend or distribution of any kind declared, set aside for
payment, paid or made by the Company on any class of capital stock (other than
regular cash dividends consistent with past practice) , or any material adverse
change in or affecting the business, properties, financial position or results
of operations of the Company and its subsidiaries taken as a
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whole; (ii) neither the Company nor any of its subsidiaries has entered into any
transaction or agreement that is material to the Company and subsidiaries taken
as a whole or incurred any liability or obligation, direct or contingent, that
is material to the Company and its subsidiaries, taken as a whole and (iii)
neither the Company nor any of its subsidiaries has sustained any loss or
interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor disturbance or dispute or
any action, order or decree of any court or arbitrator or governmental or
regulatory authority that is material to the Company and its subsidiaries taken
as a whole, except in each case as otherwise disclosed in the Disclosure Package
and the Final Prospectus.
(l) The Company and each of its significant subsidiaries have been duly
organized and are validly existing and in good standing under the laws of their
respective jurisdictions of organization, are duly qualified to do business and
are in good standing in each jurisdiction in which their respective ownership or
lease of property or the conduct of their respective businesses requires such
qualification, and have all corporate, or such other comparable, power and
authority necessary to own or hold their respective properties and to conduct
their respective businesses as disclosed in the Disclosure Package and the Final
Prospectus, except where the failure to be so qualified or in good standing or
have such power or authority would not, individually or in the aggregate,
reasonably be expected to have a material adverse effect on the business,
properties, financial position, results of operations of the Company and its
subsidiaries taken as a whole or on the performance by the Company of its
obligations under the Securities (a "Material Adverse Effect"). Engineered
Polymer Solutions, Inc. is the only significant subsidiary of the Company.
(m) The Company has an authorized capitalization as set forth in the
Disclosure Package and the Final Prospectus under the heading "Capitalization"
(except for (1) any subsequent issuances of capital stock pursuant to the
exercise of outstanding stock options or under existing officer, director or
employee benefit plans and options granted under, or contracts or commitments
pursuant to, existing stock option or officer, director or employee benefit
plans and (2) any repurchases of common stock pursuant to stock repurchase
programs approved by the Company's Board of Directors); and all the outstanding
shares of capital stock or other equity interests of each significant subsidiary
of the Company have been duly and validly authorized and issued, are fully paid
and non-assessable and are owned directly or indirectly by the Company, free and
clear of any lien, charge, encumbrance, security interest, restriction on voting
or transfer or any other claim of any third party (except, (A) in the case of
any foreign subsidiary, for directors' qualifying shares, and (B) except as
otherwise disclosed in or contemplated by the Disclosure Package and the Final
Prospectus).
(n) The Indenture has been duly authorized, executed and delivered by
the Company and constitutes a valid and legally binding agreement of the Company
enforceable against the Company in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or similar laws affecting the enforcement of creditors' rights or
remedies generally and by equitable principles relating to enforceability,
including principles of good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity) (collectively, the
"Enforceability Exceptions"); and the Indenture has been qualified under the
Trust Indenture Act.
(o) The Securities have been duly authorized by the Company and, when
duly executed, authenticated, issued and delivered as provided in the Indenture
and paid for as
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provided herein, will constitute valid and legally binding obligations of the
Company enforceable against the Company in accordance with their terms, subject
to the Enforceability Exceptions, and will be entitled to the benefits of the
Indenture.
(p) This Agreement has been duly authorized, executed and delivered by
the Company.
(q) Each of this Agreement, the Securities and the Indenture
(collectively, the "Transaction Documents") conforms or will conform, as the
case may be, in all material respects to the descriptions thereof contained in
the Disclosure Package and the Final Prospectus.
(r) Neither (i) the Company nor any of its significant subsidiaries is
in violation of its charter, by-laws or similar organizational documents; (ii)
the Company nor any of its subsidiaries is in default, and no event has occurred
that, with notice or lapse of time or both, would constitute such a default, in
the due performance or observance of any term, covenant or condition contained
in any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is subject; or
(iii) the Company nor any of its subsidiaries is in violation of any law or
statute or any judgment, order, rule or regulation of any court or arbitrator or
governmental or regulatory authority, except, in the case of clause (ii) or
(iii) above, for any such default or violation that would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.
(s) The execution, delivery and performance by the Company of each of
the Transaction Documents, the issuance and sale of the Securities and
compliance by the Company with the terms thereof and the consummation of the
transactions contemplated by the Transaction Documents will not (i) conflict
with or result in a breach or violation of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which the Company or any of its subsidiaries
is a party or by which the Company or any of its subsidiaries is bound or to
which any of the property or assets of the Company or any of its subsidiaries is
subject, (ii) result in any violation of the provisions of the charter, by-laws
or similar organizational documents of the Company or any of its significant
subsidiaries or (iii) result in the violation of any law or statute or any
judgment, order, rule or regulation of any court or arbitrator or governmental
or regulatory authority having jurisdiction over the Company or any of its
subsidiaries or any of their respective properties, except, in the case of
clauses (i) and (iii) above, for any such conflict, breach or violation that
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
(t) No consent, approval, authorization, order, registration or
qualification of or with any court or arbitrator or governmental or regulatory
authority is required for the execution, delivery and performance by the Company
of each of the Transaction Documents, the issuance and sale of the Securities
and compliance by the Company with the terms thereof and the consummation of the
transactions contemplated by the Transaction Documents, except for such
consents, approvals, authorizations, orders and registrations or qualifications
as have been obtained or
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made or may be required under applicable state securities laws in connection
with the purchase and resale of the Securities by the Underwriters.
(u) Except as described in the Disclosure Package and the Final
Prospectus, there are no legal, governmental or regulatory investigations,
actions, suits or proceedings pending to which the Company or any of its
subsidiaries is a party or to which any property of the Company or any of its
subsidiaries is the subject that, individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect; and to the knowledge
of the Company, no such investigations, actions, suits or proceedings are
threatened by any governmental or regulatory authority or others.
(v) Ernst & Young LLP, which has certified certain financial statements
of the Company and its subsidiaries, is an independent registered public
accounting firm with respect to the Company and its subsidiaries within the
meaning of Rule 101 of the Code of Professional Conduct of the American
Institute of Certified Public Accountants and its interpretations and rulings
thereunder.
(w) Except as described in the Disclosure Package and the Final
Prospectus, the Company and its subsidiaries have good and marketable title in
fee simple (in the case of real property) or good and marketable title (in the
case of personal property) to, or have valid rights to lease or otherwise use,
all items of real and personal property that are material to the Company and its
subsidiaries taken as a whole, in each case free and clear of all liens,
encumbrances, claims and defects and imperfections of title except those that
(i) do not materially interfere with the use made and proposed to be made of
such property by the Company and its subsidiaries or (ii) would not reasonably
be expected, individually or in the aggregate, to have a Material Adverse
Effect.
(x) Except as described in the Disclosure Package and the Final
Prospectus, (i) the Company and its subsidiaries own, possess or can acquire on
reasonable terms adequate rights to use all patents, patent applications,
trademarks, service marks, trade names, trademark registrations, service mark
registrations, copyrights, licenses and know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential information,
systems or procedures) (collectively, "Intellectual Property Rights") necessary
for the conduct of their respective businesses as described in the Disclosure
Package and the Final Prospectus, except any such failures to own or possess the
right to use such Intellectual Property Rights that would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect; (ii)
the conduct of their respective businesses does not conflict in any material
respect with any Intellectual Property Rights of others, except any such
conflicts that would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect; and (iii) the Company and its
subsidiaries have not received any actual notice of any claim of infringement of
or conflict with the asserted Intellectual Property Rights of others, except any
such claims that would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(y) The Company and its subsidiaries taken as a whole carry or are
entitled to the benefits of insurance covering their respective properties,
operations, personnel and businesses, including business interruption insurance,
which insurance is in such amounts and insures
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against such losses and risks as are customary for companies engaged in similar
businesses in similar industries as the Company and its subsidiaries.
(z) The Company and its subsidiaries have filed all tax returns
material to the Company and its subsidiaries taken as a whole required to be
filed through the date hereof and paid all taxes shown as due on such returns as
filed, except for taxes being contested in good faith and for which adequate
reserves have been established in accordance with generally accepted accounting
principles; and except as otherwise disclosed in the Disclosure Package and the
Final Prospectus, there is no tax deficiency material to the Company and its
subsidiaries taken as a whole that has been, or would reasonably be expected to
be, asserted against the Company or any of its subsidiaries or any of their
respective properties or assets.
(aa) The Company and its subsidiaries possess all licenses,
certificates, permits and other authorizations issued by, and have made all
declarations and filings with, the appropriate federal, state, local or foreign
governmental or regulatory authorities that are necessary for the ownership or
lease of their respective properties or the conduct of their respective
businesses as described in the Disclosure Package and the Final Prospectus,
except where the failure to possess or make the same would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect; and
except as described in the Disclosure Package and the Final Prospectus, neither
the Company nor any of its subsidiaries has received actual notice of any
revocation or modification of any such license, certificate, permit or
authorization, except any such revocations or modifications that would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(bb) No labor disturbance by or imminent dispute with employees of the
Company or any of its subsidiaries exists or, to the knowledge of the Company,
is contemplated or threatened, except any such disturbances or disputes that
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
(cc) Except as described in the Disclosure Package and the Final
Prospectus, (i) there is not any and there has been no storage, generation,
transportation, handling, treatment, disposal, discharge, emission or other
release of any kind of toxic or other wastes or other hazardous substances
("Hazardous Substances") by, due to, or caused by the Company or any subsidiary
(or any other entity for whose acts or omissions the Company is or may be
liable) upon any property now or previously owned or leased by the Company or
any subsidiary, or upon any other property, except in compliance with any
applicable Environmental Laws (defined below), and (ii) Hazardous Substances are
not otherwise present at any property now or previously owned or leased by the
Company or any subsidiary, which in the case of either (i) or (ii) would be a
violation of or give rise to any liability under any applicable law, rule,
regulation, order, judgment, decree or permit relating to pollution or
protection of human health and the environment ("Environmental Law"), except in
the case of clauses (i) and (ii) above, any action or circumstance that
(individually or in the aggregate) would not reasonably be expected to result in
a
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Material Adverse Effect. Except as described in the Disclosure Package and the
Final Prospectus, neither the Company nor any subsidiary has agreed to assume,
undertake or provide indemnification for any liability of any other person under
any Environmental Law, including any obligation for cleanup or remedial action,
except any such assumption, undertaking or provision that (individually or in
the aggregate) would not reasonably be expected to result in a Material Adverse
Effect. Except as described in the Disclosure Package and the Final Prospectus,
there is no pending or, to the Company's knowledge, threatened administrative,
regulatory or judicial action, claim or notice of noncompliance or violation,
investigation or proceedings relating to any Environmental Law against the
Company or any subsidiary, except such actions, claims, notices of
noncompliance, violations, investigations and proceedings that (individually or
in the aggregate) would not reasonably be expected to result in a Material
Adverse Effect.
(dd) Each employee benefit plan, within the meaning of Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), that
is required to comply with ERISA and that is maintained, administered or
contributed to by the Company or any of its affiliates for employees or former
employees of the Company and its affiliates has been maintained in compliance
with its terms and the requirements of any applicable laws, statutes, orders,
rules and regulations, including but not limited to ERISA and the Internal
Revenue Code of 1986, as amended (the "Code") and no prohibited transaction,
within the meaning of Section 406 of ERISA or Section 4975 of the Code, has
occurred with respect to any such plan excluding transactions effected pursuant
to a statutory or administrative exemption, except any such failures to comply
and prohibited transactions that would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect; and except as
disclosed in the Disclosure Package and the Final Prospectus, (i) for each such
plan that is subject to the funding rules of Section 412 of the Code or Section
302 of ERISA, no "accumulated funding deficiency" as defined in Section 412 of
the Code has been incurred, whether or not waived, and (ii) the present value of
all benefits accrued under any such plan subject to those funding rules, as
determined using reasonable actuarial assumptions does not exceed the fair
market value of the assets of each such plan (excluding for these purposes
accrued but unpaid contributions) by any amount which, with respect to the
matters described in clauses (i) and (ii), individually or in the aggregate is
material to the Company and its subsidiaries taken as a whole. For purposes of
this clause (dd), the term "affiliate" shall mean any entity that is treated
with the Company as a single employer pursuant to Sections 414(b), (c) or (m) of
the Code.
(ee) The Company is in compliance in all material respects with the
applicable provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules and
regulations of the Commission adopted pursuant thereto as such rules and
regulations currently apply to the Company (collectively, the "▇▇▇▇▇▇▇▇-▇▇▇▇▇
Act"). There is and has been no failure on the part of any of the Company's
officers or directors, in their capacities as such, to comply with any
applicable provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act, except such failures as would
not, individually or in the aggregate, reasonably be expected to result in a
Material Adverse Effect.
(ff) Neither the Company nor any of its subsidiaries nor, to the
knowledge of the Company, any director, officer, agent, employee or affiliate of
the Company or any of its subsidiaries is currently subject to any U.S.
sanctions administered by the Office of Foreign Assets Control of the U.S.
Treasury Department ("OFAC"); and the Company will not directly or indirectly
use the proceeds of the offering, or lend, contribute or otherwise make
available such proceeds to any subsidiary, joint venture partner or other person
or entity, for the purpose of financing the activities of any person currently
subject to any U.S. sanctions administered by OFAC.
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(gg) 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 Disclosure Package and the Final Prospectus, will not be, an "investment
company" within the meaning of the Investment Company Act of 1940, as amended,
and the rules and regulations of the Commission thereunder (collectively,
"Investment Company Act").
(hh) Neither the Company nor any of its subsidiaries nor, to the
knowledge of the Company, any director, officer, agent, employee or other person
associated with or acting on behalf of the Company or any of its subsidiaries,
has (i) made any direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds; (ii) violated or is in
violation of any provision of the Foreign Corrupt Practices Act of 1977; or
(iii) made any bribe, rebate, payoff, influence payment, kickback or other
unlawful payment, except in each case as would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
(ii) Neither the Company nor any of its subsidiaries is a party to any
contract, agreement or understanding with any person (other than this Agreement)
that would give rise to a valid claim against any of them or any Underwriter for
a brokerage commission, finder's fee or like payment in connection with the
offering and sale of the Securities.
(jj) The Company has not taken, directly or indirectly, any action
designed to or that could reasonably be expected to cause or result in any
stabilization or manipulation of the price of the Securities.
Any certificate signed by any officer of the Company and
delivered to the Representatives or counsel for the Underwriters in connection
with the offering of the Securities shall be deemed a representation and
warranty by the Company, as to matters covered thereby, to each Underwriter.
Section 2. Purchase and Sale. Subject to the terms and conditions and
in reliance upon the representations and warranties herein set forth, the
Company agrees to sell to each Underwriter, and each Underwriter agrees,
severally and not jointly, to purchase from the Company, at 99.284% of the
principal amount thereof the respective principal amounts of the 2012 Notes set
forth opposite such Underwriter's name in Schedule I hereto and at 99.094% of
the principal amount thereof the respective principal amounts of the 2017 Notes
set forth opposite such Underwriter's name in Schedule I hereto.
Section 3. Delivery and Payment. Delivery of and payment for the
Securities shall be made at 10:00 a.m., New York City time, on April 17, 2007,
or at such time on such later date not more than three Business Days after the
foregoing date as the Representatives shall designate, which date and time may
be postponed by agreement between the Representatives and the Company or as
provided in Section 9 hereof (such date and time of delivery and payment for the
Securities being herein called the "Closing Date"). Delivery of the Securities
shall be made to the Representatives for the respective accounts of the several
Underwriters against payment by the several Underwriters through the
Representatives of the purchase price thereof to or upon the order of the
Company by wire transfer payable in same-day funds to an account specified by
the
10
Company. Delivery of the Securities shall be made through the facilities of The
Depository Trust Company unless the Representatives shall otherwise instruct.
Section 4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Securities for sale to the public as set forth
in the Final Prospectus.
Section 5. Agreements. The Company agrees with the several Underwriters
that:
(a) Prior to the termination of the offering of the Securities, the
Company will not file any amendment of the Registration Statement or supplement
(including the Final Prospectus or any Preliminary Prospectus) to the Base
Prospectus unless the Company has furnished you a copy for your review prior to
filing and will not file any such proposed amendment or supplement to which you
reasonably object. The Company will cause the Final Prospectus, properly
completed, and any supplement thereto to be filed in a form approved by the
Representatives with the Commission pursuant to the applicable paragraph of Rule
424(b) within the time period prescribed and will provide evidence satisfactory
to the Representatives of such timely filing. The Company will promptly advise
the Representatives (i) when the Final Prospectus, and any supplement thereto,
shall have been filed (if required) with the Commission pursuant to Rule 424(b),
(ii) when, prior to termination of the offering of the Securities, any amendment
to the Registration Statement shall have been filed or become effective, (iii)
of any request by the Commission or its staff for any amendment of the
Registration Statement, or any Rule 462(b) Registration Statement, or for any
supplement to the Final Prospectus or for any additional information, (iv) of
the issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement or of any notice objecting to its use or the
institution or threatening of any proceeding for that purpose and (v) of the
receipt by the Company of any notification with respect to the suspension of the
qualification of the Securities for sale in any jurisdiction or the institution
or threatening of any proceeding for such purpose. The Company will use its best
efforts to prevent the issuance of any such stop order or the occurrence of any
such suspension or objection to the use of the Registration Statement and, upon
such issuance, occurrence or notice of objection, to obtain as soon as possible
the withdrawal of such stop order or relief from such occurrence or objection,
including, if necessary, by filing an amendment to the Registration Statement or
a new registration statement and using its best efforts to have such amendment
or new registration statement declared effective as soon as practicable.
(b) To prepare a final term sheet, containing solely a description of
final terms of the Securities and the offering thereof, in the form approved by
you and attached as Exhibit A hereto and to file such term sheet pursuant to
Rule 433(d) within the time required by such Rule.
(c) If, at any time prior to the filing of the Final Prospectus
pursuant to Rule 424(b), any event occurs as a result of which the Disclosure
Package would include any untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein in the light of the
circumstances under which they were made or the circumstances then prevailing
not misleading, the Company will (i) notify promptly the Representatives so that
any use of the Disclosure Package may cease until it is amended or supplemented;
(ii) amend or supplement the Disclosure Package to correct such statement or
omission; and (iii) supply any amendment or supplement to you in such quantities
as you may reasonably request.
11
(d) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act (including in circumstances where such
requirement may be satisfied pursuant to Rule 172), any event occurs as a result
of which the Final Prospectus as then supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein in the light of the circumstances under which they
were made at such time not misleading, or if it shall be necessary to amend the
Registration Statement, file a new registration statement or supplement the
Final Prospectus to comply with the Act or the Exchange Act or the respective
rules thereunder, including in connection with use or delivery of the Final
Prospectus, the Company promptly will (i) notify the Representatives of any such
event, (ii) prepare and file with the Commission, subject to the second sentence
of paragraph (a) of this Section 5, an amendment or supplement or new
registration statement which will correct such statement or omission or effect
such compliance, (iii) use its best efforts to have any amendment to the
Registration Statement or new registration statement declared effective as soon
as practicable in order to avoid any disruption in use of the Final Prospectus
and (iv) supply any supplemented Final Prospectus to you in such quantities as
you may reasonably request.
(e) As soon as practicable, the Company will make generally available
to its security holders and to the Representatives an earnings statement or
statements of the Company and its subsidiaries which will satisfy the provisions
of Section 11(a) of the Act and Rule 158.
(f) The Company will furnish to the Representatives and counsel for the
Underwriters, without charge, signed copies of the Registration Statement
(including exhibits thereto) and to each other Underwriter a copy of the
Registration Statement (without exhibits thereto) and, so long as delivery of a
prospectus by an Underwriter or dealer may be required by the Act (including in
circumstances where such requirement may be satisfied pursuant to Rule 172), as
many copies of each Preliminary Prospectus, the Final Prospectus and each Issuer
Free Writing Prospectus and any supplement thereto as the Representatives may
reasonably request. The Company will pay the expenses of printing or other
production of all documents relating to the offering.
(g) The Company will arrange, if necessary, for the qualification of
the Securities for sale under the laws of such jurisdictions as the
Representatives may designate and will maintain such qualifications in effect so
long as required for the distribution of the Securities; provided that in no
event shall the Company be obligated to qualify to do business in any
jurisdiction where it is not now so qualified or to take any action that would
subject it to service of process in suits, other than those arising out of the
offering or sale of the Securities, in any jurisdiction where it is not now so
subject.
(h) The Company agrees that, unless it has or shall have obtained the
prior written consent of the Representatives, and each Underwriter, severally
and not jointly, agrees with the Company that, unless it has or shall have
obtained, as the case may be, the prior written consent of the Company, 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) required to be filed by the
Company with the Commission or retained by the Company under Rule 433, other
than a free writing prospectus containing the information contained in the final
term sheet prepared and filed pursuant to Section 5(b) hereto;
12
provided that the prior written consent of the parties hereto shall be deemed to
have been given in respect of the Free Writing Prospectuses included in Schedule
II hereto and any electronic road show. Any such free writing prospectus
consented to by the Representatives or the Company is hereinafter referred to as
a "Permitted Free Writing Prospectus." The Company agrees that (x) it has
treated and will treat, as the case may be, each Permitted Free Writing
Prospectus as an Issuer Free Writing Prospectus and (y) it has complied and will
comply, as the case may be, with the requirements of Rules 164 and 433
applicable to any Permitted Free Writing Prospectus, including in respect of
timely filing with the Commission, legending and record keeping.
(i) The Company will not, without the prior written consent of the
Representatives, offer, sell, contract to sell, pledge, or otherwise dispose of
(or enter into any transaction which is designed to, or might reasonably be
expected to, result in the disposition (whether by actual disposition or
effective economic disposition due to cash settlement or otherwise) by the
Company or any affiliate of the Company or any person in privity with the
Company or any affiliate of the Company), directly or indirectly establish or
increase a put equivalent position or liquidate or decrease a call equivalent
position within the meaning of Section 16 of the Exchange Act, any debt
securities issued or guaranteed by the Company (other than the Securities) or
publicly announce an intention to effect any such transaction, until the date
that is 30 days after the Closing Date.
(j) The Company will not take, directly or indirectly, any action
designed to or that would constitute or that might reasonably be expected to
cause or result in, under the Exchange Act or otherwise, stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Securities.
(k) The Company agrees to pay the costs and expenses incident to the
performance of the obligations of the Company hereunder, including all costs and
expenses relating to the following matters: (i) the preparation, printing or
reproduction and filing with the Commission of the Registration Statement
(including financial statements and exhibits thereto), each Preliminary
Prospectus, the Final Prospectus and each Issuer Free Writing Prospectus, and
each amendment or supplement to any of them; (ii) the printing (or reproduction)
and delivery (including postage, air freight charges and charges for counting
and packaging) of such copies of the Registration Statement, each Preliminary
Prospectus, the Final Prospectus and each Issuer Free Writing Prospectus, and
all amendments or supplements to any of them, as may, in each case, be
reasonably requested for use in connection with the offering and sale of the
Securities; (iii) the preparation, printing, authentication, issuance and
delivery of certificates for the Securities, including any stamp or transfer
taxes in connection with the original issuance and sale of the Securities; (iv)
the printing (or reproduction) and delivery of this Agreement, any blue sky
memorandum and all other agreements or documents printed (or reproduced) and
delivered in connection with the offering of the Securities; (v) any
registration or qualification of the Securities for offer and sale under the
securities or blue sky laws of the several states as the Representatives may
reasonably designate (including filing fees and the reasonable fees and expenses
of counsel for the Underwriters relating to such registration and
qualification); (vi) any filings required to be made with the NASD, Inc.
(including filing fees and the reasonable fees and expenses of counsel for the
Underwriters relating to such filings); (vii) the transportation and other
expenses incurred by or on behalf of Company representatives in connection with
13
presentations to prospective purchasers of the Securities; (viii) the fees and
expenses of the Company's accountants and the fees and expenses of counsel
(including local and special counsel) for the Company; and (ix) all other costs
and expenses incident to the performance by the Company of its obligations
hereunder.
Section 6. Conditions to the Obligations of the Underwriters. The
obligations of the Underwriters to purchase the Securities shall be subject to
the accuracy of the representations and warranties on the part of the Company
contained herein as of the Execution Time and the Closing Date, to the accuracy
of the statements of the Company made in any certificates pursuant to the
provisions hereof, to the performance by the Company of its obligations
hereunder and to the following additional conditions:
(a) The Final Prospectus, and any supplement thereto, have been filed
in the manner and within the time period required by Rule 424(b); the final term
sheet contemplated by Section 5(b) hereto, and any other material required to be
filed by the Company pursuant to Rule 433(d) under the Act, shall have been
filed with the Commission within the applicable time periods prescribed for such
filings by Rule 433; and no stop order suspending the effectiveness of the
Registration Statement or any notice objecting to its use shall have been issued
and no proceedings for that purpose shall have been instituted or threatened.
(b) The Company shall have requested and caused ▇▇▇▇ ▇▇▇▇, Esq., the
General Counsel of the Company, and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Brand, LLP, outside
counsel for the Company, to have furnished to the Representatives their
opinions, dated the Closing Date and addressed to the Representatives, to the
effect set forth in Exhibits B and C hereto.
(c) On the date of this Agreement and on the Closing Date, Ernst &
Young LLP shall have furnished to the Underwriters letters, dated the respective
dates of delivery thereof and addressed to the Underwriters, in form and
substance reasonably satisfactory to the Underwriters, containing statements and
information of the type customarily included in accountants' "comfort letters"
to underwriters with respect to the Company's financial statements and certain
financial information of the Company contained or incorporated by reference in
the Disclosure Package and the Final Prospectus; provided that each letter shall
use a "cut-off" date no more than three business days prior to the date of such
letter.
(d) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Final Prospectus (exclusive of any amendment or
supplement thereto), there shall not have been (i) any change or decrease
specified in the letter or letters referred to in paragraph (c) of this Section
6 or (ii) any change, or any development involving a prospective change, in or
affecting the condition (financial or otherwise), earnings, business or
properties of the Company and its subsidiaries taken as a whole, whether or not
arising from transactions in the ordinary course of business, except as set
forth in or contemplated in the Disclosure Package and the Final Prospectus
(exclusive of any amendment or supplement thereto) the effect of which, in any
case referred to in clause (i) or (ii) above, is, in the sole judgment of the
Representatives, so material and adverse as to make it impractical or
inadvisable to proceed with the offering or delivery of the Securities as
contemplated by the Registration Statement (exclusive of any amendment
14
thereof), the Disclosure Package and the Final Prospectus (exclusive of any
amendment or supplement thereto).
(e) Subsequent to the Execution Time, there shall not have been any
decrease in the rating of any of the Company's debt securities by any
"nationally recognized statistical rating organization" (as defined for purposes
of Rule 436(g) under the Act) or any notice given of any intended or potential
decrease in any such rating or of a possible change in any such rating that does
not indicate the direction of the possible change.
(f) Prior to the Closing Date, the Company shall have furnished to the
Representatives such further information, certificates and documents as the
Representatives may reasonably request.
If any of the conditions specified in this Section 6 shall not have
been fulfilled when and as provided in this Agreement, or if any of the opinions
and certificates mentioned above or elsewhere in this Agreement shall not be
reasonably satisfactory in form and substance to the Representatives and counsel
for the Underwriters, this Agreement and all obligations of the Underwriters
hereunder may be canceled at, or at any time prior to, the Closing Date by the
Representatives. Notice of such cancellation shall be given to the Company in
writing or by telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 6 shall be
delivered at the office of ▇▇▇▇▇, Brown, ▇▇▇▇ & Maw LLP, counsel for the
Underwriters, at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, on the Closing
Date.
Section 7. Reimbursement of Underwriters' Expenses. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 6 hereof is not satisfied,
because of any termination pursuant to Section 10 hereof or because of any
refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof other than by reason of a
default by any of the Underwriters, the Company will reimburse the Underwriters
severally through Barclays Capital Inc. on demand for all expenses (including
reasonable fees and disbursements of counsel) that shall have been reasonably
incurred by them in connection with the proposed purchase and sale of the
Securities.
Section 8. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Underwriter, the directors, officers, employees
and agents of each Underwriter and each person who controls any Underwriter
within the meaning of either the Act or the Exchange Act against any and all
losses, claims, damages or liabilities, joint or several, to which they or any
of them may become subject under the Act, the Exchange Act or other Federal or
state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the registration statement for the registration of
the Securities as originally filed or in any amendment thereof, or in the Base
Prospectus, any Preliminary Prospectus or any other preliminary prospectus
supplement relating to the Securities, the Final Prospectus, any Issuer Free
Writing Prospectus or the information contained in the final term sheet required
to be prepared and filed pursuant to Section 5(b)
15
hereto, or in any amendment thereof or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and agrees to reimburse each such indemnified party, as incurred,
for any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon any such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Underwriter through
the Representatives specifically for inclusion therein. This indemnity agreement
will be in addition to any liability which the Company may otherwise have.
(b) Each Underwriter severally and not jointly agrees to indemnify and
hold harmless the Company, each of its directors, each of its officers who signs
the Registration Statement, and each person who controls the Company within the
meaning of either the Act or the Exchange Act, to the same extent as the
foregoing indemnity from the Company to each Underwriter, but only with
reference to written information relating to such Underwriter furnished to the
Company by or on behalf of such Underwriter through the Representatives
specifically for inclusion in the documents referred to in the foregoing
indemnity. This indemnity agreement will be in addition to any liability which
any Underwriter may otherwise have. The Company acknowledges that the statements
set forth (i) in the last paragraph of the cover page regarding delivery of the
Securities and (ii) under the heading "Underwriting" (A) the list of
Underwriters and their respective participation in the sale of the Securities,
(B) the sentences related to concessions and reallowances and (C) the sentences
related to stabilization, syndicate covering transactions and penalty bids in
any Preliminary Prospectus and the Final Prospectus constitute the only
information furnished in writing by or on behalf of the several Underwriters for
inclusion in any Preliminary Prospectus, the Final Prospectus or any Issuer Free
Writing Prospectus.
(c) Promptly after receipt by an indemnified party under this Section 8
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in which
case the indemnifying party shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the indemnified party or parties
except as set forth below); provided, however, that such counsel shall be
reasonably satisfactory to the indemnified party. Notwithstanding the
indemnifying party's election to appoint counsel to represent the indemnified
party in an action, the indemnified party shall have the right to employ
separate counsel (including local counsel), and the indemnifying party shall
bear the reasonable fees, costs and expenses of a single separate counsel for
the indemnified parties (in addition to local counsel) if (i) the use of counsel
chosen
16
by the indemnifying party to represent the indemnified party would present such
counsel with a conflict of interest, (ii) the actual or potential defendants in,
or targets of, any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, (iii) the indemnifying party shall not have employed counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of the institution of such action or
(iv) the indemnifying party shall authorize the indemnified party to employ
separate counsel at the expense of the indemnifying party. An indemnifying party
will not, without the prior written consent of the indemnified parties, settle
or compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a), (b) or
(c) of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Underwriters severally
agree to contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating or defending the same) (collectively "Losses") to which the
Company and one or more of the Underwriters may be subject in such proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand and by the Underwriters on the other from the offering of the
Securities; provided, however, that in no case shall any Underwriter (except as
may be provided in any agreement among underwriters relating to the offering of
the Securities) be responsible for any amount in excess of the underwriting
discount or commission applicable to the Securities purchased by such
Underwriter hereunder. If the allocation provided by the immediately preceding
sentence is unavailable for any reason, the Company and the Underwriters
severally shall contribute in such proportion as is appropriate to reflect not
only such relative benefits but also the relative fault of the Company on the
one hand and of the Underwriters on the other in connection with the statements
or omissions which resulted in such Losses as well as any other relevant
equitable considerations. Benefits received by the Company shall be deemed to be
equal to the total net proceeds from the offering (before deducting expenses)
received by it, and benefits received by the Underwriters shall be deemed to be
equal to the total underwriting discounts and commissions, in each case as set
forth on the cover page of the Final Prospectus. Relative fault shall be
determined by reference to, among other things, whether any untrue or any
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information provided by the Company on the
one hand or the Underwriters on the other, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. The Company and the Underwriters agree that
it would not be just and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this paragraph (d), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 8, each person who controls an Underwriter within the meaning of
either the Act or the Exchange Act and each director, officer,
17
employee and agent of an Underwriter shall have the same rights to contribution
as such Underwriter, and each person who controls the Company within the meaning
of either the Act or the Exchange Act, each officer of the Company who shall
have signed the Registration Statement and each director of the Company shall
have the same rights to contribution as the Company, subject in each case to the
applicable terms and conditions of this paragraph (d).
Section 9. Default by an Underwriter. If any one or more Underwriters
shall fail to purchase and pay for any of the Securities agreed to be purchased
by such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the principal amount of
Securities set forth opposite their names in Schedule I hereto bears to the
aggregate principal amount of Securities set forth opposite the names of all the
remaining Underwriters) the Securities which the defaulting Underwriter or
Underwriters agreed but failed to purchase; provided, however, that in the event
that the aggregate principal amount of Securities which the defaulting
Underwriter or Underwriters agreed but failed to purchase shall exceed 10% of
the aggregate principal amount of Securities set forth in Schedule I hereto, the
remaining Underwriters shall have the right to purchase all, but shall not be
under any obligation to purchase any, of the Securities, and if such
nondefaulting Underwriters do not purchase all the Securities, this Agreement
will terminate without liability to any nondefaulting Underwriter or the
Company. In the event of a default by any Underwriter as set forth in this
Section 9, the Closing Date shall be postponed for such period, not exceeding
five Business Days, as the Representatives shall determine in order that the
required changes in the Registration Statement and the Final Prospectus or in
any other documents or arrangements may be effected. Nothing contained in this
Agreement shall relieve any defaulting Underwriter of its liability, if any, to
the Company and any nondefaulting Underwriter for damages occasioned by its
default hereunder.
Section 10. Termination. This Agreement may be terminated in the
absolute discretion of the Representatives, by notice to the Company, if 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 the New
York Stock Exchange or the over-the-counter market; (ii) trading of any
securities issued or guaranteed by the Company shall have been suspended on any
exchange or in any over-the-counter market; (iii) a general moratorium or
material disruption shall have occurred in commercial banking activities or
securities settlement or clearance services in the United States; or (iv) there
shall have occurred any outbreak or escalation of hostilities or any change in
the financial markets in the United States or the international financial
markets or any calamity or crisis, either within or outside the United States,
that, in the judgment of the Representatives, makes it impracticable or
inadvisable to proceed with the offering, sale or delivery of the Securities on
the terms and in the manner contemplated by this Agreement and the Final
Prospectus (exclusive of any amendment or supplement thereto).
Section 11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of the Underwriters set forth in or made pursuant to
this Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or the Company or any of
the officers, directors, employees, agents or controlling persons referred to in
Section 8
18
hereof, and will survive delivery of and payment for the Securities. The
provisions of Sections 7 and 8 hereof shall survive the termination or
cancellation of this Agreement.
Section 12. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted and confirmed by any standard form of telecommunication. Notices to
the Underwriters shall be given to the Underwriters c/o Barclays Capital Inc.,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Fixed Income Syndicate,
fax: ▇▇▇-▇▇▇-▇▇▇▇, telephone: ▇▇▇-▇▇▇-▇▇▇▇ and c/o Wachovia Capital Markets,
LLC, One Wachovia Center, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: Debt Capital Markets, fax: ▇▇▇-▇▇▇-▇▇▇▇. Notices to the
Company shall be given to it at: The Valspar Corporation, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇, fax: ▇▇▇-▇▇▇-▇▇▇▇,
telephone: ▇▇▇-▇▇▇-▇▇▇▇.
Section 13. Successors. This Agreement will inure to the benefit of and
be binding upon the parties hereto and their respective successors and the
officers, directors, employees, agents and controlling persons referred to in
Section 8 hereof, and no other person will have any right or obligation
hereunder.
Section 14. No Fiduciary Duty. The Company acknowledges and agrees that
the Underwriters are acting solely in the capacity of an arm's length
contractual counterparty to the Company with respect to the offering of
Securities (including in connection with determining the terms of the offering)
and not as a financial advisor or a fiduciary to, or an agent of, the Company or
any other person. Additionally, no Underwriter is advising the Company or any
other person as to any legal, tax, investment, accounting or regulatory matters
in any jurisdiction. The Company shall consult with its own advisors concerning
such matters and shall be responsible for making its own independent
investigation and appraisal of the transactions contemplated hereby, and the
Underwriters shall have no responsibility or liability to the Company with
respect thereto. Any review by the Underwriters of the Company, the transactions
contemplated hereby or other matters relating to such transactions will be
performed solely for the benefit of the Underwriters and shall not be on behalf
of the Company.
Section 15. Integration. This Agreement supersedes all prior agreements
and understandings (whether written or oral) between the Company and the
Underwriters, or any of them, with respect to the subject matter hereof.
Section 16. Applicable Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York.
Section 17. Waiver of Jury Trial. The Company hereby irrevocably
waives, to the fullest extent permitted by applicable law, any and all right to
trial by jury in any legal proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby.
Section 18. Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
19
Section 19. Headings. The section headings used herein are for
convenience only and shall not affect the construction hereof.
Section 20. Definitions. The terms that follow, when used in this
Agreement, shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended and
the rules and regulations of the Commission promulgated thereunder.
"Base Prospectus" shall mean the base prospectus referred to
in paragraph 1(a) above contained in the Registration Statement at the
Execution Time.
"Business Day" shall mean any day other than a Saturday, a
Sunday or a legal holiday or a day on which banking institutions or
trust companies are authorized or obligated by law to close in New York
City.
"Commission" shall mean the Securities and Exchange
Commission.
"Disclosure Package" shall mean (i) the Base Prospectus, (ii)
the Preliminary Prospectus used most recently prior to the Execution
Time, (iii) the Issuer Free Writing Prospectuses, if any, identified in
Schedule II hereto, (iv) the final term sheet prepared and filed
pursuant to Section 5(b) hereto, if any, and (v) any other Free Writing
Prospectus that the parties hereto shall hereafter expressly agree in
writing to treat as part of the Disclosure Package.
"Effective Date" shall mean each date and time that the
Registration Statement and any post-effective amendment or amendments
thereto became or becomes effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto.
"Final Prospectus" shall mean the prospectus supplement
relating to the Securities that was first filed pursuant to Rule 424(b)
after the Execution Time, together with the Base Prospectus.
"Free Writing Prospectus" shall mean a free writing
prospectus, as defined in Rule 405.
"Issuer Free Writing Prospectus" shall mean an issuer free
writing prospectus, as defined in Rule 433.
"Preliminary Prospectus" shall mean any preliminary prospectus
supplement to the Base Prospectus referred to in paragraph 1(a) above
which is used prior to the filing of the Final Prospectus, together
with the Base Prospectus.
20
"Registration Statement" shall mean the registration statement
referred to in paragraph 1(a) above, including exhibits and financial
statements and any prospectus supplement relating to the Securities
that is filed with the Commission pursuant to Rule 424(b) and deemed
part of such registration statement pursuant to Rule 430B, as amended
on each Effective Date and, in the event any post-effective amendment
thereto becomes effective prior to the Closing Date, shall also mean
such registration statement as so amended.
"Rule 158", "Rule 163", "Rule 164", "Rule 172", "Rule 405",
"Rule 415", "Rule 424", "Rule 430B" and "Rule 433" refer to such rules
under the Act.
"Trust Indenture Act" shall mean the Trust Indenture Act of
1939, as amended and the rules and regulations of the Commission
promulgated thereunder.
"Well-Known Seasoned Issuer" shall mean a well-known seasoned
issuer, as defined in Rule 405.
[SIGNATURES APPEAR ON NEXT PAGE]
21
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company and the several Underwriters.
Very truly yours,
THE VALSPAR CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President
and CFO
The foregoing Agreement is hereby
confirmed and accepted as of the
date first set forth above
BARCLAYS CAPITAL INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Director
WACHOVIA CAPITAL MARKETS, LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
For themselves and the other several
Underwriters, if any, named in
Schedule I to the foregoing Agreement.
22
SCHEDULE I
Principal Amount Principal Amount
of Notes due 2012 to of Notes due 2017 to
Underwriters be Purchased be Purchased
------------ -------------------- --------------------
Barclays Capital Inc......................................... $80,000,000 $60,000,000
Wachovia Capital Markets, LLC................................ 80,000,000 60,000,000
Banc of America Securities LLC............................... 8,000,000 6,000,000
BMO Capital Markets Corp. ................................... 8,000,000 6,000,000
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. ........................................ 8,000,000 6,000,000
▇.▇. ▇▇▇▇▇▇ Securities Inc. ................................. 8,000,000 6,000,000
▇▇▇▇▇ Fargo Securities, LLC.................................. 8,000,000 6,000,000
------------------------------------------------------
Total................................................... $200,000,000 $150,000,000
======================================================
I-1
SCHEDULE II
Schedule of Free Writing Prospectuses included in the Disclosure Package
Term Sheet
II-1
EXHIBIT A
Pricing Term Sheet
Issuer: The Valspar Corporation
Size: 2012 Notes - $200,000,000
2017 Notes - $150,000,000
Maturity: 2012 Notes - May 1, 2012
2017 Notes - May 1, 2017
Coupon: 2012 Notes - 5.625%
2017 Notes - 6.050%
Price to Public: 2012 Notes - 99.884%
2017 Notes - 99.744%
Yield to maturity: 2012 Notes - 5.651%
2017 Notes - 6.084%
Spread to Benchmark Treasury: 2012 Notes - +100 basis points
2017 Notes - +135 basis points
Benchmark Treasury: 2012 Notes - UST 4.50 due 3/31/2012
2017 Notes - UST 4.625 due 2/15/2017
Benchmark Treasury Yield: 2012 Notes - 4.651%
2012 Notes - 4.734%
Interest Payment Dates: May 1 and November 1, commencing
November 1, 2007
Redemption Provisions:
Make-whole call 2012 Notes - At any time at a discount rate of
Treasury plus 15 basis points
2017 Notes - At any time at a discount rate
of Treasury plus 25 basis points
Settlement: April 17, 2007
CUSIP: 2012 Notes - 920355 AD 6
2017 Notes - 920355 AE 4
Ratings: Baa2/BBB
NOTE: A securities rating is not a recommendation to buy, sell or hold
securities and may be subject to revision or withdrawal at any time.
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, THE UNDERWRITERS CAN ARRANGE TO SEND
YOU THE PROSPECTUS IF YOU REQUEST IT BY CALLING BARCLAYS CAPITAL INC. TOLL-FREE
AT ▇▇▇-▇▇▇-▇▇▇▇ EXT. 2663 OR BY CONTACTING WACHOVIA CAPITAL MARKETS, LLC AT
▇-▇▇▇-▇▇▇-▇▇▇▇ OR BY E-MAIL AT: ▇▇▇▇▇▇▇▇▇.▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇.
A-1
EXHIBIT B
[Form of Opinion of ▇▇▇▇ ▇▇▇▇, Esq.]
1. The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware and has
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Disclosure Package and the Final
Prospectus. The Company is in good standing in each jurisdiction in which the
ownership or lease of its property or the conduct of its businesses requires
such qualification, except where the failure to be so qualified or in good
standing or have such power or authority would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
2. Each of the significant subsidiaries of the Company has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of the state of its incorporation and has corporate power and authority to
own, lease and operate its properties and to conduct its business as described
in the Disclosure Package and the Final Prospectus, except where any failure
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. All the outstanding shares of capital stock of each
significant subsidiary of the Company have been duly and validly authorized and
issued and are fully paid and non-assessable, and, except as otherwise set forth
in the Disclosure Package and the Final Prospectus, all outstanding shares of
capital stock of the significant subsidiaries of the Company are owned by the
Company either directly or through wholly owned subsidiaries free and clear of
any perfected security interest and, to the knowledge of such counsel, after due
inquiry, any other security interest, claim, lien or encumbrance.
3. The Company's authorized equity capitalization is as set forth in
the Disclosure Package and the Final Prospectus.
4. The issue and sale of the Securities by the Company, and the
execution, delivery and performance by the Company of the Underwriting Agreement
and the Indenture will not breach or result in a default under any material
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is subject, nor
will such action violate the certificate of incorporation or by-laws of the
Company.
5. The issue and sale of the Securities by the Company, and the
execution, delivery and performance by the Company of the Underwriting Agreement
and the Indenture will not violate any order known to such counsel issued
pursuant to any federal or Minnesota law, statute or the Delaware General
Corporation Law by any court or governmental agency or body having jurisdiction
over the Company or any of its subsidiaries or any of their properties.
6. There is no pending or, to my knowledge, threatened action, suit or
proceeding by or before any court or governmental agency, authority or body or
any arbitrator involving the Company or any of its subsidiaries or its or their
property that is not adequately disclosed in the Disclosure Package and the
Final Prospectus, except in each case for such proceedings that, if
B-1
the subject of an unfavorable decision, ruling or finding would not singly or in
the aggregate, have a Material Adverse Effect.
7. To my knowledge, (a) there are no statutes or pending or threatened
legal or governmental proceedings that ARE required to be described in the
Registration Statement that are not described as required in the Disclosure
Package and the Final Prospectus, and (b) there is no contract or other document
of a character required to be described in the Registration Statement or Final
Prospectus, or to be filed as an exhibit thereto, which is not described or
filed as required.
In addition, such counsel shall state that he has participated in
conferences with officers and other representatives of the Company, its counsel
and accountants and representatives of the Underwriters and their counsel, at
which conferences he discussed the contents of the Registration Statement, the
Disclosure Package and the Final Prospectus, and related matters and, although
he is not passing upon and does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Disclosure Package
and the Final Prospectus, on the basis of the foregoing, no facts have come to
his attention that lead him to believe that (i) the Registration Statement, at
the most recent time of effectiveness with respect to the Underwriter as
determined pursuant to Rule 430B, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading; (ii) the Final
Prospectus, as of its date or at the Closing Date contained an untrue statement
of a material fact or omitted to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; or (iii) the Disclosure Package, as of the Execution
Time, 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
circumstances under which they were made, not misleading (except that such
counsel in such statement need express no view as to (i) financial statements,
financial statement schedules and other financial information therein or (ii)
that part of the Registration Statement that constitutes the Statement of
Eligibility (Form T-1) under the Trust Indenture Act of the Trustee).
B-2
EXHIBIT C
[Form of Opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Brand, LLP]
1. The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
2. The Indenture has been duly authorized, executed and delivered by
the Company and, assuming that the Indenture has been duly authorized, executed
and delivered by the Trustee, constitutes a valid and legally binding obligation
of the Company enforceable against the Company in accordance with its terms,
subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights or remedies generally and by equitable principles relating to
enforceability, including principles of good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity)
(collectively, the "Enforceability Exceptions"). The Indenture has been
qualified under the Trust Indenture Act.
3. The Securities have been duly authorized, executed and delivered by
the Company and, assuming due authentication thereof by the Trustee, constitute
valid and legally binding obligations of the Company enforceable against the
Company in accordance with their terms and entitled to the benefits of the
Indenture, subject to the Enforceability Exceptions.
4. The issue and sale of the Securities by the Company, and the
execution, delivery and performance by the Company of the Underwriting Agreement
and the Indenture will not violate any federal, New York (assuming that New York
law is the same as Minnesota law) or Minnesota law or statute or the Delaware
General Corporation Law or any rule or regulation that has been issued pursuant
to any federal, New York (assuming that New York law is the same as Minnesota
law) or Minnesota law, statute or the Delaware General Corporation Law.
5. No consent, approval, authorization, order, registration or
qualification of or with any U.S. federal, New York (assuming that New York law
is the same as Minnesota law), Minnesota or Delaware governmental agency or body
is required for the issue and sale of the Securities by the Company, and the
compliance by the Company with all of the provisions of the Underwriting
Agreement and the Indenture, except for such consents, approvals,
authorizations, registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the issue and sale of the
Securities by the Company and the purchase and distribution of the Securities by
the Underwriters.
6. 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 Disclosure Package and the Final Prospectus, will not be, an "investment
company" within the meaning of the Investment Company Act of 1940, as amended,
and the rules and regulations of the Commission thereunder.
7. The statements made in the Disclosure Package and the Final
Prospectus under the captions "Description of the Notes," insofar as they
purport to constitute summaries of
C-1
certain terms of documents referred to therein, constitute accurate summaries of
the terms of such documents in all material respects.
8. The documents incorporated by reference into the Disclosure Package
and the Final Prospectus, when filed with the Commission, complied as to form in
all material respects with the requirements of the Exchange Act.
9. The Registration Statement has become effective under the Act; any
required filing of the Base Prospectus, any Preliminary Prospectus and the Final
Prospectus, and any supplements thereto, pursuant to Rule 424(b) has been made
in the manner and within the time period required by Rule 424(b); and to the
knowledge of such counsel, no stop order suspending the effectiveness of the
Registration Statement or any notice objecting to its use has been issued, and
no proceedings for that purpose have been instituted or threatened.
10. The Registration Statement and the Final Prospectus (other than (i)
the financial statements, financial statement schedules and other financial
information contained therein, as to which such counsel need express no opinion
and (ii) that part of the Registration Statement that constitutes the Statement
of Eligibility (Form T-1) under the Trust Indenture Act of the Trustee) comply
as to form in all material respects with the applicable requirements of the Act
and the Trust Indenture Act and the respective rules thereunder.
In addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the Company, and
representatives of the independent public accountants for the Company and
representatives of the Underwriters and their counsel at which conferences they
made inquiries of such officers, representatives and accountants and discussed
the contents of the Registration Statement, the Disclosure Package and the Final
Prospectus, and related matters and, although they are not passing upon and do
not assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement, the Disclosure Package or
the Final Prospectus except as set forth in paragraph 7 above, on the basis of
the foregoing, no facts have come to their attention that lead them to believe
that (i) the Registration Statement, at the most recent time of effectiveness
with respect to the Underwriters as determined pursuant to Rule 430B, contained
an untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein not misleading; (ii) the Final Prospectus, as of its date or at the
Closing Date contained an untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; or (iii)
the Disclosure Package, as of the Execution Time, 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 circumstances under which they were
made, not misleading (except that such counsel in such statement need express no
view as to (i) financial statements, financial statement schedules and other
financial information therein or (ii) that part of the Registration Statement
that constitutes the Statement of Eligibility (Form T-1) under the Trust
Indenture Act of the Trustee).
C-2
