EXHIBIT 1-c
UNDERWRITING AGREEMENT
(Capital Securities)
___________, 200_
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ & Co.
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
We (the "Manager") are acting on behalf of the underwriter or
underwriters (including ourselves) named below (such underwriter or
underwriters being herein called the "Underwriters"), and we understand that
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Trust [ ] (the "Issuer Trust"), a statutory business
trust created under the Delaware Business Trust Act, proposes to issue and sell
[number and title of capital securities] of the Issuer Trust's Capital
Securities (the "Firm Capital Securities"). [The Issuer Trust also proposes to
issue and sell to the several Underwriters not more than an additional [ ]
Capital Securities (the "Additional Capital Securities") if and to the extent
that we, as Manager of the offering, shall have determined to exercise, on
behalf of the Underwriters, the right to purchase such Additional Capital
Securities granted to the Underwriters herein.] The Firm Capital Securities
[and the Additional Capital Securities] are hereinafter collectively referred
to as the "Offered Capital Securities."
It is understood that substantially contemporaneously with the closing
of the sale of the Firm Capital Securities to the Underwriters contemplated
hereby, (i) the Issuer Trust, its trustees (the "Issuer Trustees"), its
administrators (the "Administrators") and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ & Co. (the
"Company") shall enter into an Amended and Restated Trust Agreement in
substantially the form of the Form of the Amended and Restated Trust Agreement
attached as Exhibit 4-zz to the Registration Statement referred to below (the
"Trust Agreement"), pursuant to which the Issuer Trust shall (x) issue and sell
the Firm Capital Securities to the Underwriters pursuant hereto and (y) issue [
] shares of its Common Securities (the "Common Securities" and, together with
the Firm Capital Securities, the "Trust Securities") to the Company, in each
case with such rights and obligations as shall be set forth in such Trust
Agreement, (ii) the Company and The Bank of New York, as Trustee, acting
pursuant to a Junior Subordinated Debt Indenture dated as of March 1, 1998,
shall provide for the issuance of $[ ] principal amount of the Company's [ ]%
Junior Subordinated Deferrable Interest Debentures due [ ] (the "Junior
Subordinated Debentures"), (iii) the Company shall sell such Junior
Subordinated Debentures to the Issuer Trust and the Issuer Trust shall purchase
such Junior Subordinated Debentures with proceeds of the sale of the Firm
Capital Securities to the Underwriters contemplated hereby and of the Common
Securities to the Company and (iv) the Company and The Bank of New York, as
Guarantee Trustee, shall enter into
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a Guarantee Agreement in substantially the form of the Form of Capital
Securities Guarantee Agreement attached as Exhibit 4-ddd of the Registration
Statement referred to below (the "Guarantee") for the benefit of holders from
time to time of the Firm Capital Securities.
Subject to the terms and conditions set forth or incorporated by
reference herein, the Issuer Trust hereby agrees to sell and the Underwriters
agree to purchase, severally and not jointly, the aggregate number of Firm
Capital Securities set forth below opposite their names at a purchase price of
$[ ] per Firm Capital Security (the "Purchase Price") plus accumulated
distributions, if any, from and including _____________, 200_ to the date of
payment and delivery; provided that the Company shall pay to the Underwriters
compensation equal to $[ ] per Firm Capital Security[; and provided further
that for sales of [ ] or more Firm Capital Securities to a single purchaser,
such compensation will be $[ ] per Firm Capital Security].
Underwriter Number of
Firm Capital Securities
To Be Purchased
[▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ Inc.]
[▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated]
[Insert syndicate list] _______________
Total...... ===============
[Subject to the terms and conditions set forth or incorporated by
reference herein, the Issuer Trust hereby agrees to sell to the Underwriters
the Additional Capital Securities and the Underwriters shall have a one-time
right to purchase, severally and not jointly, up to [ ] Additional Capital
Securities at the Purchase Price plus accumulated distributions, if any, from
and including _____________, 200_ to the date of payment and delivery; provided
that the Company shall pay to the Underwriters compensation equal to $[ ] per
Additional Capital Security, plus accumulated distributions, if any[; and
provided further that for sales of [ ] or more Capital Securities to a single
purchaser, such compensation will be $[ ] per Additional Capital Security].
Additional Capital Securities may be purchased as provided herein solely for
the purpose of covering over-allotments made in connection with the offering of
the Firm Capital Securities. If any Additional Capital Shares are to be
purchased, each Underwriter agrees, severally and not jointly, to purchase the
number of Additional Capital Securities (subject to such adjustments to
eliminate fractional Additional Capital Securities as you may determine) that
bears the same proportion to the total number of Additional Capital Securities
to be purchased as the number of Firm Capital Securities set forth above
opposite the name of such Underwriter bears to the total number of Firm Capital
Securities.]
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The Underwriters will pay for the Firm Capital Securities upon
delivery thereof at the offices of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ at 10:00 a.m. (New York time) on _____________, 200_, or at
such other time, not later than 5:00 p.m. (New York time) on _____________,
200_, as shall be designated by us. The time and date of such payment and
delivery are hereinafter referred to as the Closing Date.
[Payment for any Additional Capital Securities shall be made to the
Issuer Trust in immediately available funds at the offices referred to above on
such date (which may be the same as the Closing Date but shall in no event be
earlier than the Closing Date nor later than ten business days after the giving
of the notice hereinafter referred to) as shall be designated in a written
notice from us to the Company of our determination, on behalf of the
Underwriters, to purchase a number, specified in said notice, of Additional
Capital Securities, or on such other date as shall be designated in writing by
us. In any event, such payment date shall be not later than ___________, 200_.
The time and date of such payment are hereinafter referred to as the "Option
Closing Date." The notice of the determination to exercise the option to
purchase Additional Capital Securities and of the Option Closing Date may be
given at any time within 30 days after the date of this Agreement.
The several obligations of the Underwriters to purchase Additional
Capital Securities hereunder are subject to the delivery to us on the Option
Closing Date of such documents as we may reasonably request with respect to the
good standing of the Company, the due authorization and issuance of the
Additional Capital Securities and other matters related to the issuance of the
Additional Capital Securities.
It is understood that substantially contemporaneously with the closing
of the sale of any Additional Capital Securities to the Underwriters, (i) the
Issuer Trust shall issue additional Common Securities to the Company (the
"Additional Common Securities"), (ii) the Company and The Bank of New York, as
Trustee, acting pursuant to a Junior Subordinated Debt Indenture dated as of
March 1, 1998, shall provide for the issuance of Junior Subordinated Debentures
having a principal amount equal to the aggregate liquidation amount of such
Additional Capital Securities and Additional Common Securities and (iii) the
Company shall sell such Junior Subordinated Debentures to the Issuer Trust and
the Issuer Trust shall purchase such Junior Subordinated Debentures with
proceeds of the sale of such Additional Capital Securities to the Underwriters
and of such Additional Common Securities to the Company.]
The Offered Capital Securities shall have the terms set forth in the
Prospectus dated _____________, 200_, and the Prospectus Supplement dated
_____________, 200_, including the following:
Terms of Offered Capital Securities
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Designation of the Series
of Capital Securities: [ ]
Issuer of Offered
Capital Securities: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Trust [ ]
Aggregate Number of
Capital Securities: [ ]
[([ ], if the
Underwriter's over-allotment option
is exercised in full)]
Price to Public: $[ ]
Purchase Price: $[ ]
Underwriters' Compensation
per Capital Security: $[ ] [(or $[ ] for sales of
[ ] or more to a single
purchaser)]
Selling Concession: $[ ]
Reallowance: $[ ]
Closing Date: ____________, 200_
Form:
Other Terms:
Maturity Date:
[Distribution Payment Dates]
[Redemption:]
Capitalized terms used above and not defined herein shall have the
meanings set forth in the Prospectus and Prospectus Supplement referred to
above.
Except as set forth below, all provisions contained in the document
entitled Underwriting Agreement Standard Provisions dated o, 2002 relating to
the Capital Securities of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Trust III, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Capital Trust IV, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Trust V, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Trust
VI and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Trust VII (fully and unconditionally guaranteed
to the extent described therein by the Company) (the "Standard Provisions"), a
copy of which is attached hereto, are herein incorporated by reference in their
entirety and shall be deemed to be a part of this
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Agreement to the same extent as if such provisions had been set forth in full
herein, except that (i) if any term defined in such document is otherwise
defined herein, the definition set forth herein shall control, (ii) all
references in such document to a type of security that is not an Offered
Capital Security or a related Junior Subordinated Debenture shall not be deemed
to be a part of this Agreement and (iii) all references in such document to a
type of agreement that has not been entered into in connection with the
transactions contemplated hereby shall not be deemed to be a part of this
Agreement.
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Please confirm your agreement by having an authorized officer sign a
copy of this Agreement in the space set forth below.
Very truly yours,
[▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED]
[▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ INC.]
[Name of other Lead Managers]
On behalf of themselves and the other Underwriters
named herein
By ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
By:
-----------------------------------------------
Name:
Title:
Accepted as of the date hereof:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ & CO.
By:
-----------------------------
Name:
Title:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CAPITAL TRUST [ ]
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ & Co., as
Depositor
By:
-----------------------------
Name:
Title:
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CAPITAL TRUST III
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CAPITAL TRUST IV
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CAPITAL TRUST V
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CAPITAL TRUST VI
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CAPITAL TRUST VII
CAPITAL SECURITIES
(Fully and unconditionally guaranteed, to the
extent described herein, by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ & Co.)
UNDERWRITING AGREEMENT
STANDARD PROVISIONS
o, 2002
From time to time, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ & Co., a Delaware
corporation (the "Company"), may, together with any one of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Capital Trust III, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Trust IV, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital
Trust V, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Trust VI or ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Trust VII
(each an "Issuer Trust," and collectively the "Issuer Trusts"), enter into one
or more underwriting agreements that provide for the sale of designated
securities to the several underwriters named therein. The standard provisions
set forth herein may be incorporated by reference in any such underwriting
agreement (an "Underwriting Agreement"). The Underwriting Agreement, including
the provisions incorporated therein by reference, is herein referred to as this
Agreement. Terms defined in the Underwriting Agreement are used herein as
therein defined.
The Company proposes from time to time to cause one or more of the
Issuer Trusts to issue its capital securities ("Capital Securities") guaranteed
by the Company to the extent described in the Prospectus (as defined below)
with respect to distributions and amounts payable upon liquidation or
redemption pursuant to a Capital Securities Guarantee Agreement to be dated as
of a date specified in the Underwriting Agreement executed and delivered by the
Company and The Bank of New York, as trustee (the "Guarantee Trustee"), for the
benefit of the holders from time to time of the Capital Securities (the
"Guarantee").
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The specified Issuer Trust will use the proceeds from the sale of the
Capital Securities and the sale of Common Securities (as defined below) to
purchase from the Company an aggregate principal amount of its Junior
Subordinated Deferrable Interest Debentures (the "Junior Subordinated
Debentures") equal to the aggregate liquidation amount of the Capital
Securities and Common Securities issued by such Issuer Trust. The Junior
Subordinated Debentures will be issued under a Junior Subordinated Indenture
dated as of March 1, 1998 between the Company and The Bank of New York, as
trustee (the "Debt Securities Trustee") (as amended and supplemented from time
to time, the "Junior Subordinated Debt Indenture"). With respect to any
issuance of Capital Securities by an Issuer Trust, the Company will also be the
holder of one hundred percent of the common securities representing undivided
beneficial interests in the assets of the specified Issuer Trust (the "Common
Securities" and, together with the Capital Securities, the "Trust Securities").
Each Issuer Trust will have been created under Delaware law pursuant to the
filing of a Certificate of Trust (each, a "Certificate of Trust") with the
Secretary of State of the State of Delaware and, at the time of issuance of
Trust Securities, will be governed by an Amended and Restated Trust Agreement
(each, a "Trust Agreement") among the Company, as depositor, The Bank of New
York, as Property Trustee (the "Property Trustee"), The Bank of New York
(Delaware), as Delaware Trustee (the "Delaware Trustee") (collectively, the
"Issuer Trustees"), and two individuals (who will be selected by the holders of
the Common Securities) and the holders from time to time of the Trust
Securities. The Company, as holder of the Common Securities of each Issuer
Trust, has appointed the Issuer Trustees and two individuals who are employees
or officers of or affiliated with the Company to act as administrators with
respect to the Issuer Trust (the "Administrators"). The Bank of New York, as
Property Trustee, will act as Indenture Trustee for the purposes of the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act").
The Company and the Issuer Trusts have filed with the Securities and
Exchange Commission (the "Commission") a registration statement including a
prospectus relating to the Capital Securities, the Junior Subordinated
Debentures and the Guarantee (collectively, the "Securities") and has filed
with, or transmitted for filing to, or shall promptly after the date of the
Underwriting Agreement file with or transmit for filing to, the Commission a
prospectus supplement (the "Prospectus Supplement") pursuant to Rule 424 under
the Securities Act of 1933, as amended (the "Securities Act"), specifically
relating to the Securities offered pursuant to this Agreement (the "Offered
Capital Securities," the "Offered Junior Subordinated Debentures" and the
"Offered Guarantee" and, together, the "Offered Securities"). The term
"Registration Statement" means the registration statement as amended to the
date of the Underwriting Agreement. The term "Basic Prospectus" means the
prospectus relating to the Securities included in the Registration Statement.
The term "Prospectus" means the Basic Prospectus together with the Prospectus
Supplement. The term "preliminary prospectus" means a preliminary prospectus
supplement specifically relating to the Offered Securities together with the
Basic Prospectus. As used herein, the terms "Basic
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Prospectus," "Prospectus" and "preliminary prospectus" shall include in each
case the documents, if any, incorporated by reference therein. The terms
"supplement," "amendment" and "amend" as used herein shall include all
documents deemed to be incorporated by reference in the Prospectus that are
filed subsequent to the date of the Basic Prospectus by the Company with the
Commission pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
1. Representations and Warranties. Each of the Company and the Issuer
Trust specified in the Underwriting Agreement (the "Specified Issuer Trust")
jointly and severally represents and warrants to each of the Underwriters as of
the date of the Underwriting Agreement 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 threatened by the
Commission.
(b) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Securities Act, complied when so filed in all
material respects with the Securities Act and the rules and regulations of the
Commission thereunder.
(c) (i) Each document, if any, filed or to be filed pursuant to the
Exchange Act and incorporated by reference in the Prospectus complied or will
comply when so filed in all material respects with the Exchange Act and the
applicable rules and regulations of the Commission thereunder, (ii) each part
of the Registration Statement, when such part became effective, did not contain
and each such part, as amended or supplemented, if applicable, will not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, (iii) the Registration Statement and the Prospectus comply, and, as
amended or supplemented, if applicable, will comply, in all material respects
with the Securities Act and the applicable rules and regulations of the
Commission thereunder and (iv) the Prospectus does not contain and, as amended
or supplemented, if applicable, will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, except that the representations and warranties set forth in this
Section 1(b) do not apply (A) to statements or omissions in the Registration
Statement or the Prospectus based upon information concerning any Underwriter
furnished to the Company in writing by such Underwriter through the Manager
expressly for use therein or (B) to those parts of the Registration Statement
that constitute the Statements of Eligibility (Form T-1) under the Trust
Indenture Act of the trustees referred to in the Registration Statement.
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(d) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the State of Delaware, has the
corporate power and authority to own its property and to conduct its business
as described in the Prospectus and is duly qualified to transact business and
is in good standing in each jurisdiction in which the conduct of its business
or its ownership or leasing of property requires such qualification, except to
the extent that the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its consolidated
subsidiaries, taken as a whole.
(e) Each subsidiary of the Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the jurisdiction
of its incorporation, has the corporate power and authority to own its property
and to conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each jurisdiction in
which the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse effect on
the Company and its consolidated subsidiaries, taken as a whole.
(f) The Specified Issuer Trust has been duly created and is validly
existing in good standing as a business trust under the Delaware Business Trust
Act, is a "grantor trust" for Federal income tax purposes, has the power and
authority to conduct its business as presently conducted and as described in
the Prospectus and is not required to be authorized to do business in any other
jurisdiction.
(g) This Agreement has been duly authorized, executed and delivered by
each of the Specified Issuer Trust and the Company.
(h) The Junior Subordinated Debt 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 the enforceability thereof (i) may be
limited by bankruptcy, insolvency, reorganization, liquidation, moratorium and
other similar laws affecting creditors' rights generally and (ii) is subject to
general principles of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law.
(i) The Offered Junior Subordinated Debentures have been duly authorized
by the Company and, when executed and authenticated in accordance with the
provisions of the Junior Subordinated Debt Indenture and delivered and paid for
as described in the Prospectus, will be entitled to the benefits of the Junior
Subordinated Debt Indenture, and will be valid and binding obligations of the
Company, enforceable in accordance with their terms except as the
enforceability thereof (i) may be limited by bankruptcy, insolvency,
reorganization, liquidation, moratorium and other similar laws affecting
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creditors' rights generally and (ii) is subject to general principles of
equity, regardless of whether such enforceability is considered in a proceeding
in equity or at law.
(j) The Offered Guarantee has been qualified under the Trust Indenture Act
and has been duly authorized by the Company and, upon execution and delivery
thereof by the Company (and assuming due authorization, execution and delivery
by the Guarantee Trustee), will, as of the Closing Date, be a valid and binding
agreement of the Company, enforceable in accordance with its terms except as
the enforceability thereof (i) may be limited by bankruptcy, insolvency,
reorganization, liquidation, moratorium and other similar laws affecting
creditors' rights generally and (ii) is subject to general principles of
equity, regardless of whether such enforceability is considered in a proceeding
in equity or at law.
(k) The Trust Agreement has been qualified under the Trust Indenture Act
and has been duly authorized by the Company and, upon execution and delivery
thereof by the Company (and assuming due authorization, execution and delivery
thereof by each party thereto other than the Company), will, as of the Closing
Date, be a valid and binding agreement of the Company, the Issuer Trustees and
the Administrators, enforceable in accordance with its terms except as the
enforceability thereof (i) may be limited by bankruptcy, insolvency,
reorganization, liquidation, moratorium and other similar laws affecting
creditors' rights generally and (ii) is subject to general principles of
equity, regardless of whether such enforceability is considered in a proceeding
in equity or at law and except as rights to indemnification may be limited
under applicable law.
(l) The Offered Capital Securities have been duly authorized by the Trust
Agreement and, when executed and authenticated in accordance with the
provisions of the Trust Agreement and delivered to and paid for by the
Underwriters in accordance with the terms of this Agreement, will be validly
issued and (subject to the terms of the Trust Agreement) fully paid and
non-assessable undivided beneficial interests in the assets of the Specified
Issuer Trust, and the issuance of such Offered Capital Securities will not be
subject to any preemptive or similar rights. Holders of the Offered Capital
Securities will be entitled to the same limitation of personal liability as
that extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware. The Common
Securities of the Specified Issuer Trust have been duly authorized by the Trust
Agreement and, when issued and delivered to the Company against payment
therefor as described in the Prospectus, will be validly issued undivided
beneficial interests in the assets of the Specified Issuer Trust, and the
issuance of such Common Securities will not be subject to any preemptive
rights.
(m) The execution and delivery by the Company of, and the performance by
the Company of its obligations under, this Agreement, the Junior Subordinated
Debt Indenture, the Trust Agreement, the Offered Guarantee and the Junior
Subordinated Debentures will not contravene any provision of applicable law,
the Trust Agreement or
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the certificate of incorporation or by-laws of the Company or any agreement or
other instrument binding upon the Company or any of its subsidiaries that is
material to the Company and its consolidated subsidiaries, taken as a whole, or
any judgment, order or decree of any governmental body, agency or court having
jurisdiction over the Company or any of its consolidated subsidiaries, and no
consent, approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by the Company of
its obligations under this Agreement, the Junior Subordinated Debt Indenture,
the Trust Agreement, the Offered Guarantee and the Junior Subordinated
Debentures, except such as may be required by the securities or Blue Sky laws
of the various states in connection with the offer and sale of the Offered
Securities; provided, however, that no representation is made as to whether the
purchase of the Offered Securities constitutes a "prohibited transaction" under
Section 406 of the Employee Retirement Income Security Act of 1974, as amended,
or Section 4975 of the Internal Revenue Code of 1986, as amended.
(n) The execution and delivery by the Specified Issuer Trust of, and the
performance by the Specified Issuer Trust of its obligations under, this
Agreement will not contravene any provision of applicable law or the Trust
Agreement or any agreement or other instrument binding upon the Specified
Issuer Trust, or any judgment, order or decree of any governmental body, agency
or court having jurisdiction over the Specified Issuer Trust, and no consent,
approval, authorization or order of, or qualification with, any governmental
body or agency is required for the performance by the Specified Issuer Trust of
its obligations under this Agreement, except such as may be required by the
securities or Blue Sky laws of the various states in connection with the offer
and sale of the Offered Securities; provided, however, that no representation
is made as to whether the purchase of the Offered Capital Securities
constitutes a "prohibited transaction" under 406 of the Employment Retirement
Income Security Act of 1974, as amended, or Section 4975 of the Internal
Revenue Code of 1986, as amended.
(o) There has not occurred any material adverse change, or any development
involving a prospective material adverse change, in the condition, financial or
otherwise, or in the earnings, business or operations of the Specified Issuer
Trust or the Company and its subsidiaries, taken as a whole, from that set
forth in the Prospectus (exclusive of any amendments or supplements thereto
effected subsequent to the date of the Underwriting Agreement).
(p) There are no legal or governmental proceedings pending or threatened
to which the Specified Issuer Trust or the Company or any of its consolidated
subsidiaries is a party or to which any of the properties of the Specified
Issuer Trust or the Company or any of its consolidated subsidiaries is subject
that are required to be described in the Registration Statement or the
Prospectus and are not so described or any statutes, regulations, contracts or
other documents that are required to be described in the Registration Statement
or the Prospectus or to be filed or incorporated by reference as
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exhibits to the Registration Statement that are not described, filed or
incorporated as required.
(q) The Specified Issuer Trust is not, and after giving effect to the
offering and sale of the Offered Capital Securities and the application of the
proceeds thereof as described in the Prospectus will not be required to
register as, an "investment company" as such term is defined under the
Investment Company Act of 1940, as amended.
(r) Each of the Specified Issuer Trust and the Company and its
consolidated subsidiaries has all necessary consents, authorizations,
approvals, orders, certificates and permits of and from, and has made all
declarations and filings with, all federal, state, local and other governmental
authorities, all self-regulatory organizations and all courts and other
tribunals, to own, lease, license and use its properties and assets and to
conduct its business in the manner described in the Prospectus, except to the
extent that the failure to obtain or file would not have a material adverse
effect on the Company and its consolidated subsidiaries, taken as a whole.
(s) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ Inc. is registered as a broker-dealer and investment
adviser with the Commission, is registered with the Commodity Futures Trading
Commission as a futures commission merchant and is a member of the New York
Stock Exchange, Inc. and the National Association of Securities Dealers, Inc.
(t) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated is registered as a broker-dealer and
investment adviser with the Commission, is registered with the Commodity
Futures Trading Commission as a futures commission merchant and is a member of
the New York Stock Exchange, Inc. and the National Association of Securities
Dealers, Inc.
(u) The Company has complied with all provisions of Section 517.075,
Florida Statutes relating to doing business with the Government of Cuba or with
any person or affiliate located in Cuba.
2. Public Offering. The Specified Issuer Trust and the Company are advised
by the Manager that the Underwriters propose to make a public offering of their
respective portions of the Offered Capital Securities as soon after this
Agreement has been entered into as in the Manager's judgment is advisable. The
terms of the public offering of the Offered Capital Securities are set forth in
the Prospectus.
3. Purchase and Delivery. Payment for the Offered Capital Securities shall
be made to the Specified Issuer Trust in immediately available funds at the
time and place set forth in the Underwriting Agreement, upon delivery to the
Manager for the respective accounts of the several Underwriters of the Offered
Capital Securities, registered in such names and in such denominations or
amounts, as the case may be, as the Manager shall request in writing not less
than one full business day prior to the Closing Date or the
7
Option Closing Date, as the case may be, with any transfer taxes payable in
connection with the transfer of the Offered Capital Securities to the
Underwriters duly paid.
4. Conditions to Closing. The several obligations of the Underwriters
hereunder are subject to the following conditions:
(a) Subsequent to the execution and delivery of the Underwriting 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
any "nationally recognized statistical rating organization," as such term
is defined for purposes of Rule 436(g)(2) under the Securities Act; 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 Specified Issuer Trust
or the Company and its consolidated subsidiaries, taken as a whole, from
that set forth in the Prospectus (exclusive of any amendments or
supplements thereto effected subsequent to the execution and delivery of
the Underwriting Agreement), that, in the judgment of the Manager, is
material and adverse and that makes it, in the judgment of the Manager,
impracticable to market the Offered Securities on the terms and in the
manner contemplated in the Prospectus.
(b) The Manager shall have received on the Closing Date a certificate,
dated the Closing Date and signed by an executive officer of the Company, and a
certificate, dated the Closing Date and signed by an Administrator of the
Specified Issuer Trust:
(i) to the effect set forth in clause (a)(i) above (in the case of
the certificate signed by an executive officer of the Company); and
(ii) to the effect that the representations and warranties of the
Company (in the case of the certificate signed by an executive officer of
the Company) and the Specified Issuer Trust (in the case of the
certificate signed by an Administrator of the Specified Issuer Trust)
contained in this Agreement are true and correct as of the Closing Date
and that each of the Company and the Specified Issuer Trust, as
applicable, has complied with all of the agreements and satisfied all of
the conditions on its part to be performed or satisfied on or before the
Closing Date.
The executive officer or Administrator signing and delivering such
certificate may rely upon the best of his or her knowledge as to proceedings
threatened.
8
(c) The Manager shall have received on the Closing Date an opinion of
Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP, counsel to the Company, or of other counsel
satisfactory to the Manager and who may be an officer of the Company, dated the
Closing Date, to the effect that:
(i) the Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the State of Delaware, has
the corporate power and authority to own its property and to conduct its
business as described in the Prospectus and is duly qualified to transact
business and is in good standing in each jurisdiction in which the conduct
of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or
be in good standing would not have a material adverse effect on the
Company and its consolidated subsidiaries, taken as a whole;
(ii) each of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ Inc., Discover Bank, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ &
Co. Incorporated and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ International Incorporated (the
"Material Subsidiaries") has been duly incorporated, is validly existing
as a corporation in good standing under the laws of the jurisdiction of
its incorporation, has the corporate power and authority to own its
property and to conduct its business as described in the Prospectus and is
duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that
the failure to be so qualified or be in good standing would not have a
material adverse effect on the Company and its consolidated subsidiaries,
taken as a whole;
(iii) each of the Company and its Material Subsidiaries has all
necessary consents, authorizations, approvals, orders, certificates and
permits of and from, and has made all declarations and filings with, all
federal, state, local and other governmental authorities, all
self-regulatory organizations and all courts and other tribunals, to own,
lease, license and use its properties and assets and to conduct its
business in the manner described in the Prospectus, except to the extent
that the failure to obtain or file would not have a material adverse
effect on the Company and its consolidated subsidiaries, taken as a whole;
(iv) the Junior Subordinated Debt 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 the
enforceability thereof (a) may be limited by bankruptcy, insolvency,
reorganization, liquidation, moratorium and other similar laws affecting
creditors' rights generally and (b) is
9
subject to general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law;
(v) the Junior Subordinated Debentures have been duly authorized by
the Company and, when executed and authenticated in accordance with the
provisions of the Junior Subordinated Debt Indenture and delivered to and
paid for as described in the Prospectus, will be entitled to the benefits
of the Junior Subordinated Debt Indenture and will be valid and binding
obligations of the Company, enforceable in accordance with their terms
except as the enforceability thereof (a) may be limited by bankruptcy,
insolvency, reorganization, liquidation, moratorium and other similar laws
affecting creditors' rights generally and (b) is subject to general
principles of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law;
(vi) this Agreement has been duly authorized, executed and delivered
by the Company;
(vii) the Offered Guarantee has been duly qualified under the Trust
Indenture Act and has been duly authorized, executed and delivered by the
Company and is a valid and binding obligation of the Company enforceable
in accordance with its terms except as the enforceability thereof (a) may
be limited by bankruptcy, insolvency, reorganization, liquidation,
moratorium and other similar laws affecting creditors' rights generally
and (b) is subject to general principles of equity, regardless of whether
such enforceability is considered in a proceeding in equity or at law;
(viii) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement, the
Junior Subordinated Debt Indenture, the Trust Agreement, the Offered
Guarantee and the Offered Junior Subordinated Debentures will not
contravene any provisions of applicable law or the certificate of
incorporation or by-laws of the Company or, to the best of such counsel's
knowledge, any agreement or other instrument binding upon the Company or
any of its subsidiaries that is material to the Company and its
consolidated subsidiaries, taken as a whole, or, to the best of such
counsel's knowledge, any judgment, order or decree of any governmental
body, agency or court having jurisdiction over the Company or any of its
consolidated subsidiaries, and no consent, approval or authorization or
order of or qualification with any governmental body or agency is required
for the performance by the Company of its obligations under this
Agreement, the Junior Subordinated Debt Indenture, the Trust Agreement,
the Offered Guarantee and the Junior Subordinated Debentures, except as
may be required by the securities or Blue Sky laws of the various states
in connection with the offer and sale of the Offered Securities; provided,
however, that such counsel need not express an opinion as to whether the
purchase of the
10
Offered Securities constitutes a "prohibited transaction" under Section
406 of the Employee Retirement Income Security Act of 1974, as amended, or
Section 4975 of the Internal Revenue Code of 1986, as amended;
(ix) the statements (1) in the Basic Prospectus under the captions
"The ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Trusts," "Description of Capital Securities,"
"Description of Junior Subordinated Debentures," "Description of
Guarantees" and "Plan of Distribution," (2) in the Prospectus Supplement
under "Description of Capital Securities," "Description of Junior
Subordinated Debentures," "Description of Guarantee," "Relationship Among
the Capital Securities, the Junior Subordinated Debentures and the
Guarantee" and "Underwriters," (3) in the Registration Statement under
Item 15, (4) in "Item 3. Legal Proceedings" of the most recent annual
report on Form 10-K incorporated by reference in the Prospectus and (5) in
"Item 1. Legal Proceedings" of Part II of the quarterly reports on Form
10-Q, if any, filed since such annual report and incorporated by reference
in the Prospectus, in each case insofar as such statements constitute
summaries of the legal matters, documents or proceedings referred to
therein, fairly present the information called for with respect to such
legal matters, documents and proceedings and fairly summarize the matters
referred to therein;
(x) after due inquiry, such counsel does not know of any legal or
governmental proceedings pending or threatened to which the Company or any
of its consolidated subsidiaries or the Specified Issuer Trust is a party
or to which any of the properties of the Company or any of its
consolidated subsidiaries or the Specified Issuer Trust is subject that
are required to be described in the Registration Statement or the
Prospectus and are not so described or of any statutes, regulations,
contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed or incorporated by
reference as exhibits to the Registration Statement that are not
described, filed or incorporated by reference as required;
(xi) the Specified Issuer Trust is not and, after giving effect to
the offering and sale of the Offered Capital Securities and the
application of the proceeds thereof as described in the Prospectus, will
not be required to register as an "investment company" as such term is
defined in the Investment Company Act of 1940, as amended;
(xii) such counsel is of the opinion ascribed to it under the caption
"Certain Federal Income Tax Consequences" in the Prospectus Supplement;
and
(xiii) such counsel (1) believes that each document, if any, filed
pursuant to the Exchange Act and incorporated by reference in the
Registration Statement and the Prospectus (except as to financial
statements and schedules and other
11
financial and statistical data included therein, as to which such counsel
need not express any belief) complied when so filed as to form in all
material respects with the Exchange Act and the applicable rules and
regulations of the Commission thereunder, (2) has no reason to believe
that any part of the Registration Statement (except as to financial
statements and schedules and other financial and statistical data included
therein, as to which such counsel need not express any belief, and except
for that part of the Registration Statement that constitutes Forms T-1) on
the date such part became effective contained, and the Registration
Statement (except as to financial statements and schedules and other
financial and statistical data included therein, as to which such counsel
need not express any belief, and except for the part of the Registration
Statement that constitutes Forms T-1) as of the date such opinion is
delivered contains, any untrue statement of a material fact or omitted or
omits to state a material fact required to be stated therein or necessary
to make the statements therein not misleading, (3) believes that the
Registration Statement and Prospectus (except as to financial statements
and schedules and other financial and statistical data included therein,
as to which such counsel need not express any belief) comply as to form in
all material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder and (4) has no reason to believe
that the Prospectus (except as to financial statements and schedules and
other financial and statistical data included therein, as to which such
counsel need not express any belief) as of the date such opinion is
delivered contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading.
(d) The Manager shall have received on the Closing Date an opinion of
▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, special counsel for the Underwriters, dated the Closing
Date, covering the matters referred to in subparagraphs (iv), (v), (vi), (vii),
(ix) (but only as to statements in the Basic Prospectus under "Description of
Capital Securities," "Description of Junior Subordinated Debentures,"
"Description of Guarantees" and "Plan of Distribution" and in the Prospectus
Supplement under "Description of Capital Securities," "Description of Junior
Subordinated Debentures," "Description of the Guarantee," "Relationship Among
the Capital Securities, the Junior Subordinated Debentures and the Guarantee"
and "Underwriters"), and clauses (2), (3) and (4) of subparagraph (xiii) of
paragraph (c) above.
With respect to subparagraph (xiii) of paragraph (c) above, if such
opinion is given by counsel who is also an officer of the Company, such counsel
may state that his or her opinion and belief are based upon his or her
participation, or the participation of someone under his or her supervision, in
the preparation of the Registration Statement and Prospectus and documents
incorporated therein by reference and review and discussion of the contents
thereof, but are without independent check or verification, except as
specified. With respect to subparagraph (xiii) of paragraph (c) above, ▇▇▇▇▇
▇▇▇▇ &
12
▇▇▇▇▇▇▇▇ and, if Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP is giving such opinion, Sidley
▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP may state that their opinion and belief are based upon
their participation in the preparation of the Registration Statement and
Prospectus (but not including documents incorporated therein by reference) and
review and discussion of the contents thereof (including documents incorporated
therein by reference), but are without independent check or verification,
except as specified.
(e) The Manager shall have received on the Closing Date an opinion dated
the Closing Date of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Finger, P.A., special Delaware counsel
for the Specified Issuer Trust and the Company, or of other counsel
satisfactory to the Manager, to the effect that:
(i) the Specified Issuer Trust has been duly created and is validly
existing in good standing as a business trust under the Delaware Business
Trust Act, and, under the Trust Agreement and the Delaware Business Trust
Act, has the trust power and authority to conduct its business, all as
described in the Registration Statement and Prospectus;
(ii) assuming due authorization, execution and delivery of the Trust
Agreement by the Company, the Administrators and the Issuer Trustees, the
Trust Agreement is a legal, valid and binding agreement of the Company,
the Administrators and the Issuer Trustees and is enforceable against the
Company, the Administrators and the Issuer Trustees, in accordance with
its terms, subject, as to enforcement, to the effect upon the Trust
Agreement of (i) bankruptcy, insolvency, moratorium, receivership,
reorganization, liquidation, fraudulent conveyance and transfer, and other
similar laws relating to or affecting the rights and remedies of creditors
generally, (ii) principles of equity, including applicable law relating to
fiduciary duties (regardless of whether considered and applied in a
proceeding in equity or at law), and (iii) the effect of applicable public
policy on the enforceability of provisions relating to indemnification or
contribution;
(iii) under the Trust Agreement and the Delaware Business Trust Act,
the execution and delivery of this Agreement by the Specified Issuer
Trust, and the performance by the Specified Issuer Trust of its
obligations thereunder, have been duly authorized by all necessary trust
action on the part of the Specified Issuer Trust;
(iv) the Offered Capital Securities have been duly authorized by the
Trust Agreement and are duly and validly issued and, subject to the
qualifications set forth in such opinion, will be fully paid and
nonassessable undivided beneficial interests in the assets of the
Specified Issuer Trust; the holders of Capital Securities, as beneficial
owners of the Specified Issuer Trust, will be entitled to the same
limitation of personal liability extended to stockholders of private
13
corporations for profit organized under the General Corporation Law of the
State of Delaware;
(v) the Common Securities have been duly authorized by the Trust
Agreement and are duly and validly issued undivided beneficial interests
in the assets of the Specified Issuer Trust;
(vi) under the Trust Agreement and the Delaware Business Trust Act,
the issuance of the Trust Securities is not subject to preemptive rights;
(vii) the statements in the Basic Prospectus under the caption "The
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital Trusts" and "Description of Capital Securities" and
the statements in the Prospectus Supplement under the captions "▇▇▇▇▇▇
▇▇▇▇▇▇▇ Capital Trust [ ]," "Description of Capital Securities" and
"Relationship Among the Capital Securities, the Junior Subordinated
Debentures and the Guarantee," insofar as such statements constitute
statements of Delaware law, are fairly presented;
(vii) the issuance and the sale of the Trust Securities by the
Specified Issuer Trust, the execution, delivery and performance by the
Specified Issuer Trust of the Underwriting Agreement, the consummation by
the Specified Issuer Trust of the transactions contemplated by the
Underwriting Agreement and compliance by the Specified Issuer Trust with
its obligations under this Agreement do not violate (A) the Certificate of
Trust of the Specified Issuer Trust or the Trust Agreement, or (B) any
applicable Delaware law or Delaware administrative regulation;
(viii) after due inquiry, limited to, and solely to the extent
disclosed on the second business day prior to the Closing Date, the court
dockets for active cases of the Court of Chancery of the State of Delaware
in and for New Castle County, Delaware, of the Superior Court of the State
of Delaware in and for New Castle County, Delaware, and of the United
States Federal District Court sitting in the State of Delaware, such
counsel does not know of any legal or governmental proceeding pending
against the Specified Issuer Trust;
(ix) no authorization, approval, consent or order of any Delaware
court or any Delaware governmental authority or Delaware agency is
required to be obtained by the Specified Issuer Trust solely in connection
with the issuance and sale of the Trust Securities; and
(x) the Capital Security holders (other than those Capital Security
holders who reside or are domiciled in the State of Delaware) will have no
liability for income taxes imposed by the State of Delaware solely as a
result of
14
their participation in the Specified Issuer Trust, and the Specified
Issuer Trust will not be liable for any income tax imposed by the State of
Delaware.
In rendering such opinion, such counsel may note that holders of Trust
Securities may be obligated, pursuant to the Trust Agreement, to (i) provide
indemnity and security in connection with and pay taxes or other governmental
charges arising from transfers of certificates for Trust Securities and the
issuance of replacement certificates for Trust Securities, (ii) provide
security and indemnity in connection with requests of or directions to the
Property Trustee to exercise its rights and remedies under the Trust Agreement
and (iii) undertake to pay costs as a party litigant in any suit for the
enforcement of any right or remedy under the Trust Agreement or against the
Property Trustee, to the extent provided in the Trust Agreement.
(f) The Manager shall have received on the Closing Date a letter, dated
the Closing Date, in form and substance satisfactory to the Manager, from the
Company's independent auditors, 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 or incorporated by reference into the Prospectus; provided that each letter
so furnished shall use a "cut-off date" no more than three business days prior
to the date of such letter.
5. Covenants of the Company and the Specified Issuer Trust. In further
consideration of the agreements of the Underwriters contained herein, each of
the Company and the Specified Issuer Trust covenants as follows:
(a) To furnish the Manager, without charge, a conformed copy of the
Registration Statement (including exhibits and all amendments thereto) and for
delivery to each other Underwriter a conformed copy of the Registration
Statement (without exhibits thereto) and, during the period mentioned in
paragraph (c) below, as many copies of the Prospectus, any documents
incorporated by reference therein and any supplements and amendments thereto or
to the Registration Statement as the Manager may reasonably request.
(b) Before amending or supplementing the Registration Statement or the
Prospectus with respect to the Offered Securities, to furnish to the Manager a
copy of each such proposed amendment or supplement and not to file any such
proposed amendment or supplement to which the Manager reasonably objects.
(c) If, during such period after the first date of the public offering of
the Offered Securities as in the opinion of counsel for the Underwriters the
Prospectus is required by law to be delivered in connection with sales by an
Underwriter or dealer, any event shall occur or condition exist as a result of
which it is necessary to amend or supplement the Prospectus in order to make
the statements therein, in the light of the circumstances
15
existing when the Prospectus is delivered to a purchaser, not misleading, or if
in the opinion of counsel for the Underwriters it is necessary to amend or
supplement the Prospectus to comply with law, forthwith to prepare and furnish,
at its own expense, to the Underwriters and to the dealers (whose names and
addresses the Manager will furnish to the Company) to which Offered Securities
may have been sold by the Manager on behalf of the Underwriters and to any
other dealers upon request, either amendments or supplements to the Prospectus,
satisfactory in all respects to the Manager, so that the statements in the
Prospectus as so amended or supplemented will not, in the light of the
circumstances existing when the Prospectus is delivered to a purchaser, be
misleading or so that the Prospectus, as so amended or supplemented, will
comply with law and to cause such amendments or supplements to be filed
promptly with the Commission.
(d) To endeavor to qualify the Offered Securities for offer and sale under
the securities or Blue Sky laws of such jurisdictions as the Manager shall
reasonably request and to maintain such qualifications for as long as the
Manager shall reasonably request.
(e) To make generally available to the Company's security holders and to
the Manager as soon as practicable an earning statement covering a twelve month
period beginning on the first day of the first full fiscal quarter after the
date of the Underwriting Agreement, which earning statement shall satisfy the
provisions of Section 11(a) of the Securities Act and the rules and regulations
of the Commission thereunder. If such fiscal quarter is the first fiscal
quarter of the Company's fiscal year, such earning statement shall be made
available not later than 90 days after the close of the period covered thereby
and in all other cases shall be made available not later than 45 days after the
close of the period covered thereby.
(f) During the period beginning on the date of the Underwriting Agreement
and continuing to and including the Closing Date, not to offer, sell, contract
to sell or otherwise dispose of any securities with characteristics similar to
those of the Offered Capital Securities (other than (i) the Offered Securities
and (ii) commercial paper issued in the ordinary course of business), without
the prior written consent of the Manager.
(g) Whether or not any sale of Offered Securities is consummated, to pay
all expenses incident to the performance of the Company's and the Specified
Issuer Trust's obligations under this Agreement, including: (i) the preparation
and filing of the Registration Statement and the Prospectus and all amendments
and supplements thereto, (ii) the preparation, issuance and delivery of the
Offered Securities, (iii) the fees and disbursements of the Company's counsel
and accountants, of the Specified Issuer Trust's counsel and of the Issuer
Trustees and the Debt Securities Trustee and their counsel, (iv) the
qualification of the Offered Securities under securities or Blue Sky laws in
accordance with the provisions of Section 6(d), including filing fees and the
fees and disbursements of counsel for the Underwriters in connection therewith
and in connection with the preparation of any Blue Sky or Legal Investment
Memoranda, (v) the printing and
16
delivery to the Underwriters in quantities as hereinabove stated of copies of
the Registration Statement and all amendments thereto and of the Prospectus and
any amendments or supplements thereto, (vi) the printing and delivery to the
Underwriters of copies of any Blue Sky or Legal Investment Memoranda, (vii) any
fees charged by rating agencies for the rating of the Offered Securities,
(viii) any expenses incurred by the Company or the Specified Issuer Trust in
connection with a "road show" presentation to potential investors, (ix) all
document production charges of counsel to the Underwriters (but not including
their fees for professional services in connection with the preparation of this
Agreement) and (x) any filing fees in connection with any review of the
offering of the Offered Securities by the National Association of Securities
Dealers, Inc.
6. Indemnification and Contribution. Each of the Company and the Specified
Issuer Trust jointly and severally, 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 of 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 allegedly untrue statement
of a material fact contained in the Registration Statement or any amendment
thereof, any preliminary prospectus or the 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 allegedly
untrue statement or omission based upon information relating to any Underwriter
furnished to the Company or the Specified Issuer Trust in writing by such
Underwriter through the Manager expressly for use therein; provided, however,
that the foregoing indemnity agreement with respect to any preliminary
prospectus shall not inure to the benefit of any Underwriter from whom the
person asserting any such losses, claims, damages or liabilities purchased
Offered Securities, any person controlling such Underwriter or any affiliate of
such Underwriter, if a copy of the Prospectus (as then amended or supplemented
if the Company or the Specified Issuer Trust shall have furnished any
amendments or supplements thereto) was not sent or given by or on behalf of
such Underwriter to such person, if required by law so to have been delivered,
at or prior to the written confirmation of the sale of the Offered Securities
to such person, and if the Prospectus (as so amended or supplemented) would
have cured the defect giving rise to such losses, claims, damages or
liabilities.
Each Underwriter agrees, severally and not jointly, to indemnify and hold
harmless the Specified Issuer Trust, the Issuer Trustees, the Administrators,
the Company, its directors, its officers who sign the Registration Statement
and each person, if any, who controls the Specified Issuer Trust or Company
within the meaning of either
17
Section 15 of the Securities Act or Section 20 of the Exchange Act to the same
extent as the foregoing indemnity from the Company and the Specified Issuer
Trust to each Underwriter, but only with reference to information relating to
such Underwriter furnished to the Company or the Specified Issuer Trust by such
Underwriter in writing through the Manager expressly for use in the
Registration Statement, any preliminary prospectus, the Prospectus or any
amendments or supplements thereto.
In case any proceeding (including any governmental investigation) shall be
instituted involving any person in respect of which indemnity may be sought
pursuant to either of the two preceding paragraphs, 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 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 Manager, in
the case of parties indemnified pursuant to the second preceding paragraph, and
by the Company and the Specified Issuer Trust, in the case of parties
indemnified pursuant to the first preceding paragraph. 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 were to 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
third sentence 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
18
could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such proceeding.
To the extent the indemnification provided for in the first or second
paragraph in this Section 6 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 and the Specified Issuer Trust on the
one hand and the Underwriters on the other hand from the offering of the
Offered Securities or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Company and the Specified Issuer Trust on the one
hand and 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 and the Specified Issuer Trust on the one hand and the
Underwriters on the other hand in connection with the offering of the Offered
Securities shall be deemed to be in the same respective proportions as the net
proceeds from the offering of such Offered Securities (before deducting
expenses) received by the Company and the Specified Issuer Trust and the total
underwriting discounts and commissions received by the Underwriters in respect
thereof, in each case as set forth in the table on the cover of the Prospectus
Supplement, bear to the aggregate public offering price of the Offered
Securities. The relative fault of the Company and the Specified Issuer Trust on
the one hand and of the Underwriters on the other hand shall be determined by
reference to, among other things, whether the untrue or allegedly 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 the Specified
Issuer Trust or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company, the Specified Issuer Trust and the Underwriters agree that it
would not be just or equitable if contribution pursuant to this Section 6 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 the immediately
preceding paragraph. 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 6, no
Underwriter shall be required to
19
contribute any amount in excess of the amount by which the total price at which
the Offered 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 allegedly 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 Underwriters' respective obligations to
contribute pursuant to this Section 6 are several in proportion to the
respective amounts of Offered Securities purchased by each of such Underwriters
and not joint. The remedies provided for in this Section 6 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.
7. Termination. This Agreement shall be subject to termination by notice
given by the Manager to the Company if, after the execution and delivery of the
Underwriting 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, the Nasdaq
National Market, the Chicago Board of Options Exchange, the Chicago Mercantile
Exchange or the Chicago Board of Trade, (ii) trading of any securities of the
Company or any Issuer Trust shall have been suspended on any exchange or in any
over-the-counter market, (iii) a material disruption in securities settlement,
payment or clearance services in the United States or, in the event of a global
offering, in any relevant foreign jurisdiction shall have occurred, (iv) any
moratorium on commercial banking activities shall have been declared by 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 the judgment of the Manager, is material and adverse and which,
singly or together with any other event specified in this clause (v), makes it,
in the judgment of the Manager, impracticable or inadvisable to proceed with
the offer, sale or delivery of the Offered Securities on the terms and in the
manner contemplated in the Prospectus.
8. Defaulting Underwriters. If, on the Closing Date or the Option Closing
Date, as the case may be, any one or more of the Underwriters shall fail or
refuse to purchase Offered Capital Securities that it has or they have agreed
to purchase under the Underwriting Agreement on such date, and the aggregate
number of Offered Capital Securities which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more than
one-tenth of the aggregate number of the Offered Capital Securities to be
purchased on such date, the other Underwriters shall be obligated severally in
the proportions that the number of Firm Capital Securities set forth opposite
their respective names in the Underwriting Agreement bears to the aggregate
number of Firm Capital Securities set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as the Manager may
specify, to purchase the Offered Capital Securities which such defaulting
Underwriter or Underwriters agreed but
20
failed or refused to purchase on such date; provided that in no event shall the
number of Offered Capital Securities that any Underwriter has agreed to
purchase pursuant to this Agreement be increased pursuant to this Section 8 by
an amount in excess of one-ninth of such number of Offered Capital Securities
without the written consent of such Underwriter. If, on the Closing Date, any
Underwriter or Underwriters shall fail or refuse to purchase Firm Capital
Securities and the aggregate number of Firm Capital Securities with respect to
which such default occurs is more than one-tenth of the aggregate number of
Firm Capital Securities to be purchased, and arrangements satisfactory to the
Manager and the Company for the purchase of such Firm Capital Securities are
not made within 36 hours after such default, this Agreement shall terminate
without liability on the part of any non-defaulting Underwriter, the Company or
the Specified Issuer Trust. In any such case either the Manager or the Company
shall have the right to postpone the Closing Date, but in no event for longer
than seven days, in order that the required changes, if any, in the
Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. If, on the Option Closing Date, any Underwriter
or Underwriters shall fail or refuse to purchase Additional Capital Securities
and the aggregate number of Additional Capital Securities with respect to which
such default occurs is more than one-tenth of the aggregate number of
Additional Capital Securities to be purchased, the non-defaulting Underwriters
shall have the option to (i) terminate their obligation to purchase Additional
Capital Securities or (ii) purchase not less than the number of Additional
Capital Securities that such non-defaulting Underwriters would have been
obligated to purchase in the absence of such default. 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 or the Specified
Issuer Trust to comply with the terms or to fulfill any of the conditions of
this Agreement, or if for any reason the Company or the Specified Issuer Trust
shall be unable to perform its obligations under this Agreement, the Company
and the Specified Issuer Trust jointly and severally agree to 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 of the Offered
Securities.
9. Representations and Indemnities to Survive. The respective indemnity
and contribution agreements and the representations, warranties and other
statements of the Specified Issuer Trust, the Administrators, the Company, its
officers and the Underwriters set forth in this Agreement will remain 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 or on behalf of the Specified Issuer Trust,
the Issuer Trustees, the Administrators or any person
21
controlling the Specified Issuer Trust and (iii) acceptance of and payment for
any of the Offered Securities.
10. Successors. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors and the officers,
directors, Administrators and Issuer Trustees and controlling persons referred
to in Section 6, and no other person will have any right or obligation
hereunder.
11. Counterparts. The Underwriting Agreement may be signed in any number
of 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.
