DRAFT 5/15/97
Exhibit 1.1
TANDY CORPORATION
Debt Securities
UNDERWRITING AGREEMENT-BASIC PROVISIONS
_________ __, 199__
To: The Underwriters named in the within-mentioned Terms Agreement
Dear Sirs:
Tandy Corporation (the "Company") proposes to issue and sell its Debt
Securities having an aggregate initial public offering price or purchase price
of up to U.S.$300,000,000 or the equivalent thereof in foreign currencies or
currency units (the "Securities"), in one or more offerings on terms to be
determined at the time of sale. The Securities will be issued under an indenture
dated as of May 1, 1997 between the Company and The Chase Manhattan Bank, as
trustee (the "Trustee"), as supplemented from time to time by supplemental
indentures and/or modified from time to time by resolutions of the Board of
Directors of the Company as provided in Section 301 of such indenture (such
indenture as so supplemented and/or modified being hereinafter referred to as
the "Indenture").
Whenever the Company determines to make an offering of Securities, it will
enter into an agreement substantially in the form of Exhibit A hereto (a "Terms
Agreement") providing for the sale of such Securities to, and the purchase and
offering thereof by, the underwriter or underwriters named therein (the
"Underwriters" or "you," which terms shall include the underwriter or
underwriters named therein whether acting alone in the sale of Securities or as
members of an underwriting syndicate). The Terms Agreement relating to each
offering of Securities shall specify the principal amount of Securities to be
issued and their terms not otherwise specified in the Indenture, the name or
names of the Underwriters participating in such offering (subject to
substitution as provided in Section 10 hereof) and the principal amount of
Securities which each severally agrees to purchase, the name or names of the
Underwriters acting as manager or co-managers in connection with such offering,
if any (the "Representatives," which term shall include each Underwriter in the
event that there shall be no manager or co-managers), the price at which the
Securities are to be purchased by the Underwriters from the Company, the initial
public offering price, any delayed delivery arrangements and the time and place
of delivery and payment. Each offering of Securities will be governed by this
Agreement, as supplemented by the applicable Terms Agreement, and this Agreement
and such Terms Agreement shall inure to the benefit of and be binding upon each
Underwriter participating in the offering of such Securities.
SECTION 1. Representations and Warranties. The Company represents and
warrants to you that as of the date hereof, as of the date of the applicable
Terms Agreement and as of the Closing Time (as hereinafter defined) under such
Terms Agreement (in each case, the
"Representation Date") as set forth below. Certain terms used in this Section 1
are defined in paragraph (c) hereof.
(a) If the offering of the Securities is a Delayed Offering (as specified
in Exhibit A hereto), paragraph (i) below is applicable and, if the offering of
the Securities is a Non-Delayed Offering (as so specified), paragraph (ii) below
is applicable.
(i) The Company meets the requirements for the use of Form S-3 under
the Securities Act of 1933, as amended (the "1933 Act"), and has filed with
the Securities and Exchange Commission (the "Commission") a registration
statement (File No. 333-______) on such Form, including a basic prospectus,
for registration under the 1933 Act of the offering and sale of the
Securities. The Company may have filed one or more amendments thereto, and
may have used a Preliminary Final Prospectus, each of which has previously
been furnished to you. Such registration statement, as so amended, has
become effective. The offering of the Securities is a Delayed Offering and,
although the Basic Prospectus may not include all the information with
respect to the Securities and the offering thereof required by the 1933 Act
and the rules thereunder to be included in the Final Prospectus, the Basic
Prospectus includes all such information required by the 1933 Act and the
rules thereunder to be included therein as of the Effective Date. The
Company will next file with the Commission pursuant to Rules 415 and
424(b)(2) or (5) a final supplement to the form of prospectus included in
such registration statement relating to the Securities and the offering
thereof. As filed, such final prospectus supplement shall include all
required information with respect to the Securities and the offering
thereof 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
Basic Prospectus and any Preliminary Final Prospectus) as the Company has
advised you, prior to the Execution Time, will be included or made therein.
(ii) The Company meets the requirements for the use of Form S-3 under
the 1933 Act and has filed with the Commission a registration statement
(File No. 333-_____) on such Form, including a basic prospectus, for
registration under the 1933 Act of the offering and sale of the Securities.
The Company may have filed one or more amendments thereto, including a
Preliminary Final Prospectus, each of which has previously been furnished
to you. The Company will next file with the Commission either (x) a final
prospectus supplement relating to the Securities in accordance with Rules
430A and 424(b)(1) or (4), or (y) prior to the effectiveness of such
registration statement, an amendment to such registration statement,
including the form of final prospectus supplement. In the case of clause
(x), the Company has included in such registration statement, as amended at
the Effective Date, all information (other than Rule 430A Information)
required by the 1933 Act and the rules thereunder to be included in the
Final Prospectus
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with respect to the Securities and the offering thereof. As filed, such
final prospectus supplement or such amendment and form of final prospectus
supplement shall contain all Rule 430A Information, together with all other
such required information, with respect to the Securities and the offering
thereof 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
Basic Prospectus and any Preliminary Final Prospectus) as the Company has
advised you, prior to the Execution Time, will be included or made therein.
(b) On the Effective Date, the Registration Statement did or will, and when
the Final Prospectus is first filed (if required) in accordance with Rule 424(b)
and at the Closing Time, the Final Prospectus (and any supplement thereto) will,
comply in all material respects with the applicable requirements of the 1933
Act, the Securities Exchange Act of 1934, as amended (the "1934 Act"), and the
Trust Indenture Act of 1939, as amended, (the "Trust Indenture Act") and the
respective rules thereunder; on the Effective Date, the Registration Statement
did not or 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 at the
Closing Time, the Indenture did or will comply in all material respects with the
requirements of the Trust Indenture Act and the rules thereunder; and, on the
Effective Date, the Final Prospectus, if not filed pursuant to Rule 424(b), did
not or will not, and on the date of any filing pursuant to Rule 424(b) and at
the Closing Time, 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).
(c) The terms which follow, when used in this Agreement, shall have the
meanings indicated. The term "the Effective Date" shall mean each date that the
Registration Statement and any post-effective amendment or amendments thereto
became or become effective. "Execution Time" shall mean the date and time that
the applicable Terms Agreement (including this Agreement as incorporated by
reference therein) is executed and delivered by the parties hereto. "Basic
Prospectus" shall mean the prospectus referred to in paragraph (a) above
contained in the Registration Statement at the Effective Date including, in the
case of a Non-Delayed Offering, any Preliminary Final Prospectus. "Preliminary
Final Prospectus" shall mean any preliminary prospectus supplement to the Basic
Prospectus which describes the Securities and the offering thereof and is used
prior to filing of the Final Prospectus. "Final
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Prospectus" shall mean the prospectus supplement relating to the Securities that
is first filed pursuant to Rule 424(b) after the Execution Time, together with
the Basic Prospectus or, if, in the case of a Non-Delayed Offering, no filing
pursuant to Rule 424(b) is required, shall mean the form of final prospectus
relating to the Securities, including the Basic Prospectus, included in the
Registration Statement at the Effective Date. "Registration Statement" shall
mean the registration statement referred to in paragraph (a) above, including
incorporated documents, exhibits and financial statements, as amended at the
Execution Time (or, if not effective at the Execution Time, in the form in which
it shall become effective) and, in the event any post-effective amendment
thereto becomes effective prior to the Closing Time (as hereinafter defined),
shall also mean such registration statement as so amended. Such term shall
include any Rule 430A Information deemed to be included therein at the Effective
Date as provided by Rule 430A. "Rule 415", "Rule 424", "Rule 430A" and
"Regulation S-K" refer to such rules or regulation under the 1933 Act. "Rule
430A Information" means information with respect to the Securities and the
offering thereof permitted to be omitted from the Registration Statement when it
becomes effective pursuant to Rule 430A. Any reference herein to the
Registration Statement, the Basic Prospectus, any Preliminary Final 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 1934 Act on or before the Effective Date of the Registration
Statement or the issue date of the Basic Prospectus, any Preliminary Final
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 Basic Prospectus, any Preliminary Final Prospectus
or the Final Prospectus shall be deemed to refer to and include the filing of
any document under the 1934 Act after the Effective Date of the Registration
Statement or the issue date of the Basic Prospectus, any Preliminary Final
Prospectus or the Final Prospectus, as the case may be, deemed to be
incorporated therein by reference. A "Non-Delayed Offering" shall mean an
offering of securities which is intended to commence promptly after the
effective date of a registration statement, with the result that, pursuant to
Rules 415 and 430A, all information (other than Rule 430A Information) with
respect to the securities so offered must be included in such registration
statement at the effective date thereof. A "Delayed Offering" shall mean an
offering of securities pursuant to Rule 415 which does not commence promptly
after the effective date of a registration statement, with the result that only
information required pursuant to Rule 415 need be included in such registration
statement at the effective date thereof with respect to the securities so
offered. Whether the offering of the Securities is a Non-Delayed Offering or a
Delayed Offering shall be set forth in Exhibit A hereto.
(d) The consolidated financial statements included or incorporated in the
Registration Statement and the Final Prospectus present fairly the consolidated
financial position of the Company and its consolidated subsidiaries as at the
dates indicated and the results of their operations for the periods specified,
said financial statements have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis during the periods
involved, except as indicated therein; and the supporting schedules included or
incorporated in the Registration Statement present fairly the information
required to be stated therein.
(e) The documents incorporated by reference in the Final Prospectus, at the
time they were or hereafter are filed with the Commission, complied and will
comply in all
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material respects with the requirements of the 1934 Act and the rules and
regulations thereunder, and, when read together and with the other information
in the Final Prospectus, at the time the Registration Statement and any
amendments thereto became or become effective and at each Representation Date,
did not and will not contain an 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, in the light of the circumstances under which they were
made, not misleading.
(f) Since the respective dates as of which information is given in the
Registration Statement and the Final Prospectus, except as may otherwise be
stated therein or contemplated thereby, (i) there has been no material adverse
change in the condition (financial or other), earnings, results of operations,
business or properties of the Company and its subsidiaries, considered as one
enterprise, whether or not arising from transactions in the ordinary course of
business and (ii) there have been no material transactions entered into by the
Company or any of its subsidiaries other than those in the ordinary course of
business.
(g) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware with
corporate power and authority to own, lease and operate its properties and
conduct its business as described in the Final Prospectus; and the Company is
duly qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required, whether
by reason of the ownership or leasing of property or the conduct of business,
except where the failure to so qualify would not have a material adverse effect
on the condition (financial or other), earnings, results of operations, business
or properties of the Company and its subsidiaries, considered as one enterprise.
(h) Each subsidiary of the Company which is a "significant subsidiary" as
defined in Rule 405 of Regulation C under the 1933 Act (each a "Significant
Subsidiary") has been duly incorporated and is validly existing as a corporation
in good standing under the laws of the jurisdiction of its incorporation, has
corporate power and authority to own, lease and operate its properties and
conduct its business as described in the Final Prospectus and is duly qualified
as a foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except where the
failure to so qualify would not have a material adverse effect on the condition
(financial or other), earnings, results of operations, business or properties of
the Company and its subsidiaries, considered as one enterprise, and all of the
issued and outstanding capital stock of each such Significant Subsidiary has
been duly authorized and validly issued, is fully paid and non-assessable and,
except for directors' qualifying shares, is owned by the Company, directly or
through subsidiaries, free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity.
(i) Neither the Company nor any of its Significant Subsidiaries is in
violation of its or any of their charters or in default in the performance or
observance of any material obligation, agreement, covenant or condition
contained in any material contract, indenture, mortgage, loan agreement, note,
lease or other instrument to which it or any of them is a party or by which it
or any of them or their properties may be bound; and the execution of this
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Agreement, the execution and delivery of the Indenture and the applicable Terms
Agreement (including this Agreement as incorporated by reference therein), the
filing of the Registration Statement and the consummation of the transactions
contemplated herein and therein have been duly authorized by all necessary
corporate action and will not conflict with or constitute a breach of, or
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 Significant
Subsidiaries pursuant to, any material contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Company or any of its
Significant Subsidiaries is a party or by which it or any of them may be bound
or to which any of the property or assets of the Company or any of its
Significant Subsidiaries is subject, nor will such action result in any
violation of the provisions of the charter or by-laws of the Company or, to the
best of its knowledge, any law, administrative regulation or administrative or
court decree, and no consent, approval, authorization or order of any court or
governmental authority or agency is required for the consummation by the Company
of the transactions contemplated by this Agreement, except such as may be
required under the 1933 Act or the rules and regulations promulgated thereunder
(the "Regulations"), the Trust Indenture Act or state securities or "blue sky"
laws.
(j) The Company and its Significant Subsidiaries possess adequate
certificates, authorities or permits issued by the appropriate state, federal or
foreign regulatory agencies or bodies necessary to conduct the business now
operated by them, except such certificates, authorities or permits which are not
material to such conduct of their business, and neither the Company nor any of
its Significant Subsidiaries has received any notice of proceedings relating to
the revocation or modification of any such certificate, authority or permit
which, singly or in the aggregate, if the subject of any unfavorable decision,
ruling or finding, would have a material adverse effect on the condition
(financial or other), earnings, results of operations, business or properties of
the Company and its subsidiaries, considered as one enterprise.
(k) Except as set forth in the Final Prospectus, there is no action, suit
or proceeding before or by any court or governmental agency or body, domestic or
foreign, now pending or, to the knowledge of the Company, threatened against or
affecting the Company or any of its subsidiaries that might result in any
material adverse effect on the condition (financial or other), earnings, results
of operations, business or properties of the Company and its subsidiaries,
considered as one enterprise, or might materially and adversely affect the
consummation of this Agreement and the applicable Terms Agreement, and there are
no contracts or documents of the Company or any of its subsidiaries which are
required to be filed as exhibits to the Registration Statement by the 1933 Act
or the Regulations which have not been so filed.
(l) The Securities have been duly authorized for issuance and sale pursuant
to this Agreement and the applicable Terms Agreement (or will have been so
authorized prior to each issuance of Securities) and, when executed and
authenticated in accordance with the provisions of the Indenture and delivered
to and paid for by the purchasers thereof, will constitute legal, valid and
binding obligations of the Company enforceable in accordance with their terms
(subject, as to enforcement of remedies, to applicable bankruptcy, fraudulent
transfer, reorganization, insolvency, moratorium or other laws affecting
creditors' rights generally from
6
time to time in effect and to principles relating to the availability of
equitable remedies to the extent that adequate remedies at law may exist) and
will be entitled to the benefits of the Indenture, which will be substantially
in the form heretofore delivered to you; and the Securities and the Indenture
conform in all material respects to all statements relating thereto contained in
the Final Prospectus.
(m) The Company and its Significant Subsidiaries own or possess, or can
acquire on reasonable terms, adequate trademarks, service marks and trade names
necessary to conduct the businesses now operated by them, and neither the
Company nor any of its Significant Subsidiaries has received any notice of
infringement of or conflict with asserted rights of others with respect to any
trademarks, service marks or trade names which, singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding, would have a material
adverse effect on the condition (financial or other), earnings, results of
operations, business or properties of the Company and its subsidiaries,
considered as one enterprise.
(n) No labor disturbance by the employees of the Company or any subsidiary
exists or, to the knowledge of the Company, is imminent which might be expected
to have a material adverse effect on the condition (financial or other),
earnings, results of operations, business or properties of the Company and its
subsidiaries, considered as one enterprise.
Any certificate signed by any officer of the Company and delivered to the
Representatives or counsel for the Underwriters in connection with an offering
of Securities shall be deemed a representation and warranty by the Company, as
to the matters covered thereby, to each Underwriter.
SECTION 2. Purchase and Sale. The several commitments of the Underwriters
to purchase Securities pursuant to any Terms Agreement shall be deemed to have
been made on the basis of the representations and warranties herein contained
and shall be subject to the terms and conditions herein set forth.
Payment of the purchase price for, and delivery of, any Securities to be
purchased by the Underwriters shall be made at the place set forth in the
applicable Terms Agreement, or at such other place as shall be agreed upon by
the Representatives and the Company, on the third business day (unless postponed
in accordance with the provisions of Section 10) following the date of the
applicable Terms Agreement or such other time as shall be agreed upon by the
Representatives and the Company (each such time and date being referred to as a
"Closing Time"). Except as indicated in the applicable Terms Agreement, payment
shall be made to the Company by wire transfer in same-day funds against delivery
to the Representatives for the respective accounts of the Underwriters of the
Securities to be purchased by them. Such Securities shall be in such
denominations and registered in such names as the Representatives may request in
writing at least two business days prior to the applicable Closing Time. Such
Securities, which may be in temporary form, will be made available for
examination and packaging by the Representatives on or before the first business
day prior to Closing Time.
If authorized by the applicable Terms Agreement, the Underwriters named
therein may solicit offers to purchase Securities from the Company pursuant to
delayed delivery
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contracts ("Delayed Delivery Contracts") substantially in the form of Exhibit B
hereto, with such changes therein as the Company may approve. As compensation
for arranging Delayed Delivery Contracts, the Company will pay to the
Representatives at Closing Time, for the accounts of the Underwriters, a fee
equal to that percentage of the principal amount of Securities for which Delayed
Delivery Contracts are made at Closing Time as is specified in the applicable
Terms Agreement. Any Delayed Delivery Contracts are to be with institutional
investors of the types which will be set forth in the applicable prospectus
supplement included in the Final Prospectus. At Closing Time the Company will
enter into Delayed Delivery Contracts (for not less than the minimum principal
amount of Securities per Delayed Delivery Contract specified in the applicable
Terms Agreement) with all purchasers proposed by the Underwriters and previously
approved by the Company as provided below, but not for an aggregate principal
amount of Securities in excess of that specified in the applicable Terms
Agreement. The Underwriters will not have any responsibility for the validity or
performance of Delayed Delivery Contracts.
The Representatives are to submit to the Company, at least two business
days prior to Closing Time, the names of any institutional investors with which
it is proposed that the Company will enter into Delayed Delivery Contracts and
the principal amount of Securities to be purchased by each of them, and the
Company will advise the Representatives, at least one business day prior to
Closing Time, of the names of the institutions with which the making of Delayed
Delivery Contracts is approved by the Company and the principal amount of
Securities to be covered by each such Delayed Delivery Contract.
The principal amount of Securities agreed to be purchased by the respective
Underwriters pursuant to the applicable Terms Agreement shall be reduced by the
principal amount of Securities covered by Delayed Delivery Contracts, as to each
Underwriter as set forth in a written notice delivered by the Representatives to
the Company; provided, however, that the total principal amount of Securities to
be purchased by all Underwriters shall be the total amount of Securities covered
by the applicable Terms Agreement, less the principal amount of Securities
covered by Delayed Delivery Contracts.
SECTION 3. Covenants of the Company. The Company covenants with each
Underwriter as follows:
(a) The Company will use its best efforts to cause the Registration
Statement, if not effective at the Execution Time, and any amendment thereto, to
become effective. Immediately following the execution of each Terms Agreement,
the Company will prepare a prospectus supplement to be included in the Final
Prospectus setting forth the principal amount of Securities covered thereby and
their terms not otherwise specified in the Indenture, the names of the
Underwriters and the principal amount of Securities which each severally has
agreed to purchase, the names of the Representatives, the price at which the
Securities are to be purchased by the Underwriters from the Company, the initial
public offering price, the selling concession and reallowance, if any, any
delayed delivery arrangements, and such other information as the Representatives
and the Company deem appropriate in connection with the offering of the
Securities. The Company will promptly transmit copies of the Final Prospectus to
the Commission for filing pursuant to Rule 424 of the Regulations.
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(b) If at any time when a prospectus is required by the 1933 Act to be
delivered in connection with sales of the Securities any event shall occur or
condition exist as a result of which it is necessary, in the reasonable opinion
of counsel for the Underwriters or counsel for the Company, to further amend or
supplement the Final Prospectus in order that the Final Prospectus will not
include an untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein not misleading in the light of
circumstances existing at the time it is delivered to a purchaser or if it shall
be necessary, in the reasonable opinion of either such counsel, at any such time
to amend or supplement the Registration Statement or the Final Prospectus in
order to comply with the requirements of the 1933 Act or the Regulations, the
Company will promptly prepare and file with the Commission such amendment or
supplement, whether by filing documents pursuant to the 1934 Act or otherwise,
as may be necessary to correct such untrue statement or omission or to make the
Registration Statement comply with such requirements.
(c) With respect to each sale of Securities, the Company will make
generally available to its security holders and to the Representatives as soon
as practicable earnings statements of the Company that will satisfy the
provisions of Section 11(a) of the 1933 Act and Rule 158 of the Regulations.
(d) From the date of a Terms Agreement, and for so long as a prospectus is
required to be delivered in connection with the sale of Securities covered by
such Terms Agreement, the Company will give the Representatives notice of its
intention to file any amendment to the Registration Statement or any amendment
or supplement to the Final Prospectus, whether pursuant to the 1934 Act, the
1933 Act or otherwise, and will furnish them with copies of any such proposed
amendment or supplement or other documents proposed to be filed a reasonable
time in advance of filing and will not file any such proposed amendment or
supplement to which any of the Representatives reasonably objects.
(e) From the date of a Terms Agreement, and for so long as a prospectus is
required to be delivered in connection with the sale of Securities covered by
such Terms Agreement, the Company will notify the Representatives immediately,
and confirm the notice in writing, (i) of the effectiveness of any amendment to
the Registration Statement, (ii) of the mailing or the delivery to the
Commission for filing of any supplement to the Final Prospectus or any document
to be filed pursuant to the 1934 Act which will be incorporated by reference
into the Registration Statement or Final Prospectus, (iii) of the receipt of any
comments from the Commission with respect to the Registration Statement, the
Final Prospectus or any prospectus supplement, (iv) of any request by the
Commission for any amendment to the Registration Statement or any amendment or
supplement to the Final Prospectus or for additional information, and (v) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or the initiation of any proceedings for that purpose.
The Company will make every reasonable effort to prevent the issuance of any
stop order and, if any stop order is issued, to obtain the lifting thereof at
the earliest possible moment.
(f) The Company will deliver to the Representatives and counsel for the
underwriters as many signed and conformed copies of the Registration Statement
(as originally
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filed) and of each amendment thereto (including exhibits filed therewith or
incorporated by reference therein and documents incorporated by reference in the
Final Prospectus) as the Representatives may reasonably request and will also
deliver to the Representatives a conformed copy of the Registration Statement
and each amendment thereto for each of the Underwriters. So long as delivery of
a prospectus by an Underwriter or dealer may be required by the 1933 Act, the
Company will deliver to the Representative as many copies of any Preliminary
Final Prospectus and the Final Prospectus and any supplement thereto as the
Representatives may reasonably request.
(g) The Company will arrange for the qualification of the Securities for
offering and sale under the laws of such jurisdictions as the Representatives,
after consultation with the Company, may collectively designate, will maintain
such qualifications in effect so long as required for the distribution of the
Securities and will arrange for the determination of the legality of the
Securities for purchase by institutional investors.
(h) The Company, during the period when the Final Prospectus is required to
be delivered under the 1933 Act, will file promptly all documents required to be
filed with the Commission pursuant to Section 13 or 14 of the 1934 Act.
(i) Between the date of any Terms Agreement and the termination of any
trading restrictions or the Closing Time, whichever is later, with respect to
the Securities covered thereby, the Company will not, without the prior consent
of the Representatives, offer or sell, or enter into any agreement to sell, any
debt securities of the Company with a maturity of more than one year, including
additional Securities.
SECTION 4. Conditions of Underwriters' Obligations. The obligations of the
Underwriters to purchase Securities pursuant to any Terms Agreement are subject
to the accuracy of the representations and warranties on the part of the Company
herein contained as of the Execution Time and Closing Time, to the accuracy of
the statements of the Company's officers made in any certificate furnished
pursuant to the provisions hereof, to the performance by the Company of all of
its covenants and other obligations hereunder and to the following further
conditions:
(a) If the Registration Statement has not become effective prior to the
Execution Time, unless the Representatives agree in writing to a later time, the
Registration Statement will become effective not later than (i) 6:00 PM New York
City time, on the date of determination of the public offering price, if such
determination occurred at or prior to 3:00 PM New York City time on such date or
(ii) 12:00 Noon on the business day following the day on which the public
offering price was determined, if such determination occurred after 3:00 PM New
York City time on such date; if filing of the Final Prospectus, or any
supplement thereto, is required pursuant to Rule 424(b), the Final Prospectus,
and any such supplement, shall have been filed in the manner and within the time
period required by Rule 424(b).
(b) At the applicable Closing Time (i) no stop order suspending the
effectiveness of the Registration Statement shall have been issued under the
1933 Act or proceedings thereof or initiated or threatened by the Commission,
(ii) there shall not have been
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since the execution of such Terms Agreement any decrease in the ratings of any
of the Company's debt securities by any "nationally recognized statistical
rating organization" (as defined for purpose of Rule 436(g) under the 0000 Xxx)
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, and (iii) there shall not have come to the attention of the
Representatives any facts that would cause them reasonably to believe that the
Final Prospectus, at the time it was required to be delivered to a purchaser of
the Securities, 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.
(c) At the applicable Closing Time you shall have received:
(1) The favorable opinion, dated as of the applicable Closing Time, of
Satterlee, Stephens, Xxxxx & Xxxxx LLP, counsel of the Company, in form and
substance satisfactory to the Representatives, to the effect that:
(i) the Company and each of its Significant Subsidiaries has been
duly incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction in which it is chartered
or organized, with full corporate power and authority to own its
properties and conduct its business as described in the Final
Prospectus, and is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each
jurisdiction which requires such qualification wherein it owns or
leases material properties or conducts material business and where
failure to so qualify might impair title to any of its material
properties or any right to enforce its material contracts against
others;
(ii) all outstanding shares of capital stock of the Company and
each of its Significant Subsidiaries has been duly and validly
authorized and issued and are fully paid and nonassessable, and,
except as otherwise set forth in the Final Prospectus, all outstanding
shares of capital stock of the Significant Subsidiaries 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 interests, claims,
liens or encumbrances;
(iii) the Company's authorized equity capitalization is as set
forth in the Final Prospectus; and the Indenture and the Securities
covered by the applicable Terms Agreement conform in all material
respects to the descriptions thereof in the Final Prospectus;
(iv) the Indenture has been duly authorized, executed and
delivered, has been duly qualified under the Trust Indenture Act, and
constitutes a legal, valid and binding instrument enforceable against
the Company in accordance with its terms (subject, as to enforcement
of remedies, to applicable bankruptcy, fraudulent transfer,
reorganization, insolvency, moratorium or other laws affecting
11
creditors' rights generally from time to time in effect and to
principles relating to the availability of equitable remedies to the
extent that adequate remedies at law may not exist); and the
Securities covered by the applicable Terms Agreement are in the form
contemplated by the Indenture, have been duly authorized and, when
executed and authenticated in accordance with the Indenture and
delivered to and paid for by the purchasers thereof, will constitute
legal, valid and binding obligations of the Company entitled to the
benefits of the Indenture and enforceable in accordance with their
terms (subject, as to enforcement of remedies, to applicable
bankruptcy, fraudulent transfer, reorganization, insolvency,
moratorium or other laws affecting creditors' rights generally from
time to time in effect and to principles relating to the availability
of equitable remedies to the extent that adequate remedies at law may
not exist);
(v) to the best knowledge of such counsel after reasonable
inquiry, (a) there is no pending or threatened action, suit or
proceeding before any court or governmental agency, authority or body
or any arbitrator involving the Company, its Significant Subsidiaries
or any of the Company's other subsidiaries, of a character required to
be disclosed in the Registration Statement which is not adequately
disclosed in the Final Prospectus, and (b) there is no franchise,
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, which is not described or filed as required; and the
statements included or incorporated in the Final Prospectus describing
any legal proceedings or material contracts or agreements relating to
the Company fairly summarize such matters;
(vi) the Registration Statement and any amendments thereto have
become effective under the 1933 Act; any required filing of the Basic
Prospectus, any Preliminary Final 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); to the
best knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement, as amended, has been
issued, and no proceedings for that purpose have been instituted or
threatened; the Registration Statement, the Final Prospectus, each
document incorporated by reference into the Registration Statement and
the Final Prospectus and each amendment thereof or supplement thereto
as of their respective effective or issue dates (other than the
financial statements and other financial and statistical information
contained therein as to which such counsel need express no opinion)
complied as to form in all material respects with the applicable
requirements of the 1933 Act, the Regulations, the 1934 Act, the Trust
Indenture Act and the respective rules and regulations thereunder; and
such counsel has no reason to believe that at the Effective Date the
Registration Statement contained any untrue statement of a material
fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading or
that the Final Prospectus, as amended or supplemented, includes any
untrue statement of a material fact or omits to state a material fact
necessary
12
to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(vii) this Agreement, the applicable Terms Agreement and the
Delayed Delivery Contracts, if any, have been duly authorized,
executed and delivered by the Company;
(viii) no consent, approval, authorization or order of any court
or governmental agency or body is required to be obtained by the
Company for the consummation of the transactions contemplated herein
or in any Delayed Delivery Contracts, except such as have been
obtained under the 1933 Act and such as may be required under the
"blue sky" laws of any jurisdiction in connection with the purchase
and distribution of the Securities by the Underwriters and such other
approvals (specified in such opinion) as have been obtained;
(ix) neither the execution and delivery of the Indenture, the
issue and sale of the Securities, nor the consummation of any other of
the transactions herein contemplated nor the fulfillment of the terms
hereof or of any Delayed Delivery Contracts will conflict with, result
in a breach of, or constitute a default under, the charter or by-laws
of the Company or the terms of any indenture or other agreement or
instrument known to such counsel and to which the Company, any
Significant Subsidiary or any of the Company's other subsidiaries is a
party or may be bound, or any order or regulations known to such
counsel to be applicable to the Company, any Significant Subsidiary or
any of the Company's other subsidiaries of any court, regulatory body,
administrative agency, governmental body or arbitrator having
jurisdiction over the Company, any Significant Subsidiary or any of
the Company's other subsidiaries; and
(x) to the best knowledge of such counsel, no holders of
securities of the Company have rights to the registration of such
securities under the Registration Statement.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State of
Delaware or the United States, to the extent deemed proper and specified in such
opinion, upon the opinion of other counsel of good standing believed to be
reliable and who are satisfactory to counsel for the Underwriters; and (B) as to
matters of fact, to the extent deemed proper, on certificates of responsible
officers of the Company and of public officials. In addition, such opinion may
state that, as to the qualification and good standing of Significant
Subsidiaries in jurisdictions other than those in which they are incorporated,
as to all matters set forth in paragraph (ii) above and as to matters set forth
in paragraph (ix) above relating to the Company's other subsidiaries, such
counsel have relied, with the permission of the Underwriters, solely upon an
opinion thereon of Xxxx Xxxxxxx, Staff Attorney of the Company.
13
(2) The favorable opinion, dated as of the applicable Closing Time, of
Xxxx Xxxxxxx, Staff Attorney of the Company, in form and substance
satisfactory to the Representatives, to the effect that:
(i) the Company and each of its Significant Subsidiaries has been
duly incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction in which it is chartered
or organized, with full corporate power and authority to own its
properties and conduct its business as described in the Final
Prospectus, and is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each
jurisdiction which requires such qualification wherein it owns or
leases material properties or conducts material business and where
failure to so qualify might impair title to any of its material
properties or any right to enforce its material contracts against
others;
(ii) all outstanding shares of capital stock of the Company and
each Significant Subsidiary have been duly and validly authorized and
issued and are fully paid and nonassessable, and, except as otherwise
set forth in the Final Prospectus, all outstanding shares of capital
stock of the Significant Subsidiaries 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 person,
after due inquiry, any other security interests, claims, liens or
encumbrances; and
(iii) neither the execution and delivery of the Indenture, the
issue and sale of the Securities, nor the consummation of any other of
the transactions herein contemplated nor the fulfillment of the terms
hereof or of any Delayed Delivery Contracts will conflict with, result
in a breach of, or constitute a default under, the charter or by-laws
of the Company or the terms of any indenture or other agreement or
instrument known to such person and to which the Company, any
Significant Subsidiary or any of the Company's other subsidiaries is a
party or may be bound, or any order or regulations known to such
person to be applicable to the Company, any Significant Subsidiary or
any of the Company's other subsidiaries of any court, regulatory body,
administrative agency, governmental body or arbitrator having
jurisdiction over the Company, any Significant Subsidiary or any of
the Company's other subsidiaries.
(3) The favorable opinion or opinions, dated as of the applicable
Closing Time, of Cleary, Gottlieb, Xxxxx & Xxxxxxxx, counsel for the
Underwriters, with respect to the issuance and sale of the Securities, the
Indenture, the Registration Statement, the Final Prospectus and other
related matters as the Representatives may reasonably require, and the
Company shall have furnished to such counsel such documents as they may
reasonably request for the purpose of enabling them to pass upon such
matters.
(d) At the applicable Closing Time there shall not have been, since the
date of the applicable Terms Agreement or since the respective dates as of which
information is given in
14
the Registration Statement, no material adverse change in the condition
(financial or otherwise), earnings, results of operations, business or
properties of the Company and its subsidiaries considered as one enterprise,
whether or not arising from transactions in the ordinary course of business,
except as set forth or contemplated in the Final Prospectus (exclusive of any
supplement thereto), and the Company shall have furnished to the Representatives
a certificate of the Company, signed by the Chairman of the Board, the Chief
Executive Officer or the President and the principal financial or accounting
officer of the Company, dated as of such Closing Time, to the effect that the
signer of such certificate has carefully examined the Registration Statement,
the Final Prospectus, any supplement to the Final Prospectus and this Agreement
and that:
(i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects on and as of
the Closing Date with the same effect as if made on the Closing Date
and the Company has complied with all the agreements and satisfied all
the conditions on its part to be performed or satisfied at or prior to
the Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the Company's knowledge,
threatened; and
(iii) since the date of the most recent financial statements
included in the Final Prospectus (exclusive of any supplement
thereto), there has been no material adverse change in the condition
(financial or other), earnings, results of operations, business or
properties of the Company and its subsidiaries, considered as one
enterprise, whether or not arising from transactions in the ordinary
course of business, except as set forth in or contemplated in the
Final Prospectus (exclusive of any supplement thereto).
(e) You shall have received from Price Waterhouse LLP or other independent
certified public accountants acceptable to the Representatives a letter or
letters, dated the date of the applicable Terms Agreement and as of the
applicable Closing Time, in form and substance satisfactory to the
Representatives, confirming that they are independent accountants within the
meaning of the 1933 Act, the Regulations, the 1934 Act and the applicable
published rules and regulations thereunder and stating in effect that:
(i) in their opinion the audited consolidated financial
statements and financial statement schedules included or incorporated
in the Registration Statement and the Final Prospectus and reported on
by them comply as to form in all material respects with the applicable
accounting requirements of the 1933 Act, the Regulations, the 1934 Act
and the applicable published rules and regulations thereunder;
(ii) on the basis of a reading of the latest unaudited
consolidated financial statements made available by the Company and
its subsidiaries; carrying out certain procedures specified by the
Representatives and performed by Price Waterhouse LLP (but not an
examination in accordance with generally accepted
15
auditing standards), which would not necessarily reveal matters of
significance with respect to the comments set forth in such letter; a
reading of the minutes of the meetings of the stockholders, directors
and executive committee of the Company and the Significant
Subsidiaries; and inquiries of certain officials of the Company who
have responsibility for financial and accounting matters of the
Company and its subsidiaries as to transactions and events subsequent
to the date of the most recent audited financial statements included
or incorporated in the Final Prospectus, nothing came to their
attention which caused them to believe that:
(1) any unaudited financial data included or incorporated in
the Registration Statement and the Final Prospectus do not comply
as to form in all material respects with applicable accounting
requirements and with the published rules and regulations of the
Commission with respect to financial data included or
incorporated in quarterly reports on Form 10-Q under the 1934
Act; or said unaudited consolidated financial data are not in
conformity with generally accepted accounting principles applied
on a basis substantially consistent with that of the audited
consolidated financial statements included or incorporated in the
Registration Statement and the Final Prospectus;
(2) (i) at the date of the latest available interim
financial data, there have been any changes in the capital stock
(including preferred stock, common stock and paid-in-capital, but
excluding common stock held in treasury) or any increases in the
consolidated long-term debt of the Company and its consolidated
subsidiaries as compared with the amounts shown on the latest
available consolidated balance sheet included or incorporated in
the Registration Statement or the Final Prospectus, except in
each case for increases or decreases which the Registration
Statement or the Final Prospectus discloses have occurred or will
occur and (ii) at a date specified not more than five business
days prior to the date of the letter, there have been any changes
in excess of $5,000,000 in the capital stock (including preferred
stock, common stock and paid-in-capital, but excluding common
stock held in treasury), or any increases in excess of $5,000,000
in the consolidated long-term debt, of the Company and its
consolidated subsidiaries as compared with the amounts shown on
the latest available consolidated balance sheet, except in each
case for increases or decreases which the Registration Statement
or the Final Prospectus discloses have occurred or will occur and
(iii) for the period ended on the date of the latest available
interim financial data, there were any decreases, as compared
with the corresponding period in the preceding year, in
consolidated net revenues or in total or per share amounts of net
income available to common shareholders of the Company and its
consolidated subsidiaries, except in each case for decreases
which the
16
Registration Statement or the Final Prospectus discloses have
occurred or will occur;
(3) for the period from the date of the latest available
financial statements to a specified date not more than five
business days prior to the date of the letter, there were any
decreases, as compared with the corresponding period in the
preceding year, in net revenues of the Company and its
consolidated subsidiaries, except for decreases which the
Registration Statement or the Final Prospectus discloses have
occurred or will occur; or
(4) the amounts included in any unaudited "capsule"
information included or incorporated in the Registration
Statement and the Final Prospectus do not agree with the amounts
set forth in the unaudited financial statements for the same
periods or were not determined on a basis substantially
consistent with that of the corresponding amounts in the audited
financial statements included or incorporated in the Registration
Statement and the Final Prospectus;
(iii) they have read the dollar amounts and percentages derived
from such dollar amounts of certain information of an accounting,
financial or statistical nature (which has been obtained from the
accounting records subject to internal controls of the Company's
accounting systems or which has been derived directly from such
accounting records by analysis or computation) set forth in the
Registration Statement and the Final Prospectus and in Exhibit 12 to
the Registration Statement, including the information included or
incorporated in Items 1, 2, 6, 7, and 11 of the Company's Annual
Report on Form 10-K and the information included or incorporated in
Item 2 of the Company's Quarterly Reports on Form 10-Q incorporated in
the Registration Statement and the Final Prospectus, as a result of
which they determined that such information agrees with the accounting
records of the Company, excluding any questions of legal
interpretation; and
(iv) if pro forma financial statements are included or
incorporated in the Registration Statement or the Final Prospectus, on
the basis of a reading of the unaudited pro forma financial
statements, carrying out certain specified procedures, inquiries of
certain officials of the Company and the acquired company who have
responsibility for financial and accounting matters, and proving the
arithmetic accuracy of the application of the pro forma adjustments to
the historical amounts in the pro forms financial statements, nothing
came to their attention which caused them to believe that the pro
forma financial statements do not comply in form in all material
respects with the applicable accounting requirements of Rule 11-02 of
Regulation S-X or that the pro forma adjustments have not been
properly applied to the historical amounts in the compilation of such
statements.
17
References to the Registration Statement and the Final Prospectus in this
paragraph (d) are to such documents as amended and supplemented at the date of
the letter.
(f) At the applicable Closing Time counsel for the Underwriters shall have
been furnished with such documents and opinions as they may reasonably require
for the purpose of enabling them to pass upon the issuance and sale of the
Securities as herein contemplated and related proceedings or in order to
evidence the accuracy and completeness of any of the representations and
warranties, or the fulfillment of any of the conditions, herein contained; and
all proceedings taken by the Company in connection with the issuance and sale of
the Securities as herein contemplated shall be in all material respects
satisfactory in form and substance to the Representatives and counsel for the
Underwriters.
If any condition specified in this Section shall not have been fulfilled in
all material respects when and as required to be fulfilled, the applicable Terms
Agreement may be terminated by the Representatives by notice to the Company at
any time at or prior to the applicable Closing Time, and such termination shall
be without liability of any party to any other party except as provided in
Section 5.
SECTION 5. Payment of Expenses. The Company will pay all expenses incident
to the performance of its obligations under this Agreement and each Terms
Agreement, including (i) the printing or other production and filing of the
registration statement (as originally filed) and all amendments thereto, and the
printing or other production of this Agreement and each Terms Agreement, (ii)
the preparation, issuance and delivery of the Securities to the Underwriters,
(iii) the fees and disbursements of the Company's counsel and accountants, (iv)
the qualification of the Securities under securities laws in accordance with the
provisions of Section 3(g), including filing fees and the reasonable fees and
disbursements of counsel for the Underwriters in connection therewith and in
connection with the preparation of any Blue Sky Survey and Legal Investment
Survey, (v) the printing or other production and delivery to the Underwriters in
quantities as hereinabove stated of copies of the registration statement (as
originally filed) and any amendments thereto, and of the Preliminary Final
Prospectus and the Final Prospectus and any amendments or supplements thereto,
(vi) the printing or other production and delivery to the Underwriters of copies
of the Indenture and any Blue Sky Survey and Legal Investment Survey, (vii) the
fees of rating agencies, (viii) the fees and expenses, if any, incurred in
connection with the listing of the Securities on any securities exchange, and
(ix) the fees, if any, of the National Association of Securities Dealers, Inc.
in connection with the review of the offering.
If a Terms Agreement is terminated by the Representatives in accordance
with the provisions of Section 4 or Section 9(i), the Company shall reimburse
the Underwriters named in such Terms Agreement for all of their reasonable
out-of-pocket expenses, including the reasonable fees and disbursements of one
counsel for the Underwriters, that shall have been incurred by them in
connection with the proposed purchase and sale of the Securities.
SECTION 6. Indemnification. (a) The Company agrees to indemnify and hold
harmless each Underwriter and each person, if any, who controls any Underwriter
within the
18
meaning of Section 15 of the 1933 Act or Section 20(a) of the 1934 Act, against
any and all losses, liabilities, claims, damages and expenses whatsoever as
incurred (including but not limited to attorneys' fees and any and all expenses
whatsoever incurred in investigating, preparing or defending against any
litigation, commenced or threatened, or any claim whatsoever, and any and all
amounts paid in settlement of any claim or litigation), joint or several, to
which they or any of them may become subject under the 1933 Act, the 1934 Act or
otherwise, insofar as such losses, liabilities, claims, damages or expenses (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 any
amendment thereof, or any related Preliminary Final Prospectus or the Final
Prospectus, or in any supplement thereto or amendment thereof, 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; provided, however, that the Company will not be liable in any
such case to the extent but only to the extent that any such loss, liability,
claim, damage or expense 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
expressly for use therein. This indemnity agreement will be in addition to any
liability which the Company may otherwise have, including under this Agreement.
(b) Each Underwriter severally, and not jointly, agrees to indemnify and
hold harmless the Company, each of the directors of the Company, each of the
officers of the Company who shall have signed the Registration Statement, and
each other person, if any, who controls the Company within the meaning of
Section 15 of the 1933 Act or Section 20(a) of the 1934 Act, against any losses,
liabilities, claims, damages and expenses whatsoever as incurred (including but
not limited to attorneys' fees and any and all expenses whatsoever incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever, and any and all amounts paid in settlement
of any claim or litigation), jointly or several, to which they or any of them
may become subject under the 1933 Act, the 1934 Act or otherwise, insofar as
such losses, liabilities, claims, damages or expenses (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 any amendment thereof, or
any related Preliminary Final Prospectus or the Final Prospectus, 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, in
each case to the extent, but only to the extent, that any such loss, liability,
claim, damage or expense 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
expressly for use therein. This indemnity will be in addition to any liability
which any Underwriter may otherwise have, including under this Agreement.
19
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify each party against whom indemnification is
to be sought in writing of the commencement thereof (but the failure so to
notify an indemnifying party shall not relieve it form any liability which it
may have under this Section 6). In case any such action is brought against any
indemnified party, and it notifies an indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein, and to
the extent it may elect by written notice delivered to the indemnified party
promptly after receiving the aforesaid notice from such indemnified party, to
assume the defense thereof with counsel satisfactory to such indemnified party.
Notwithstanding the foregoing, the indemnified party or parties shall have the
right to employ its or their own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of such indemnified party or
parties unless (i) the employment of such counsel shall have been authorized in
writing by one of the indemnifying parties in connection with the defense of
such action, (ii) the indemnifying parties shall not have employed counsel to
have charge of the defense of such action within a reasonable time after notice
of commencement of the action, or (iii) such indemnified party or parties shall
have reasonably concluded that there may be defenses available to it or them
which are different from or additional to those available to one or all of the
indemnifying parties (in which case the indemnifying parties shall not have the
right to direct the defense of such action on behalf of the indemnified party or
parties), in any of which events such fees and expenses shall be borne by the
indemnifying parties. Anything in this subsection to the contrary
notwithstanding, an indemnifying party shall not be liable for any settlement of
any claim or action effected without its written consent; provided, however,
that such consent was not unreasonably withheld.
SECTION 7. Contribution. In order to provide for contribution in
circumstances in which the indemnification provided for in Section 6 is for any
reason held to be unavailable from any indemnifying party or is insufficient to
hold harmless a party indemnified thereunder, the Company and the Underwriters
shall contribute to the aggregate losses, claims, damages, liabilities and
expenses of the nature contemplated by such indemnification provision (including
any investigation, legal and other expenses incurred in connection with, and any
amount paid in settlement of, any action , suit or proceeding or any claims
asserted, but after deducting in the case of losses, claims, damages,
liabilities and expenses suffered by the Company any contribution received by
the Company from persons, other than the Underwriters, who may also be liable
for contributions, including persons who control the Company within the meaning
of Section 15 of the 1933 Act or Section 20(a) of the 1934 Act, officers of the
Company who signed the Registration Statement and directors of the Company) as
incurred to which the Company and one or more of the Underwriters may be
subject, in such proportions as is appropriate to reflect the relative benefits
received by the Company and the Underwriters from the offering of the Securities
or, if such allocation is not permitted by applicable law or indemnification is
not available as a result of the indemnifying party not having received notice
as provided in Section 6 hereof, in such proportion as is appropriate to reflect
not only the relative benefits referred to above but also the relative fault of
the Company and the Underwriters in connection with the statements or omissions
which resulted in such losses, claims, damages, liabilities or expenses, as well
as any other relevant equitable considerations. The relative
20
benefits received by the Company and the Underwriters shall be deemed to be in
the same proportion as (x) the total proceeds from the offering (net of
underwriting discounts and commissions but before deducting expenses) received
by the Company and (y) the underwriting discounts and commissions received by
the Underwriters, respectively, in each case as set forth in the table on the
cover page of the Final Prospectus. The relative fault of the Company and of the
Underwriters shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company or the Underwriters and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and equitable
if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this Section 7, (i) in no case shall any Underwriter be liable or responsible
for any amount in excess of the underwriting discount applicable to the
securities purchased by such Underwriter hereunder, and (ii) no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 0000
Xxx) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. Notwithstanding the provisions of this
Section 7 and the preceding sentence, no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the Securities underwritten by it and distributed to the public were offered to
the public exceeds the amount of any damages that such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. For purposes of this Section 7, each person, if
any, who controls an Underwriter within the meaning of Section 15 of the 1933
Act or Section 20(a) of the 1934 Act shall have the same rights to contribution
as such Underwriter, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20(a) of the 1934 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 clauses (i) and (ii) of this Section 7. Any
party entitled to contribution will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in respect of
which a claim for contribution may be made against another party or parties,
notify each party or parties from whom contribution may be sought, but the
omission to so notify such party or parties shall not relieve the party or
parties from whom contribution may be sought from any obligation it or they may
have under this Section 7 or otherwise. No party shall be liable for
contribution with respect to any action or claim settled without its consent;
provided, however, that such consent was not unreasonably withheld.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement, or
contained in certificates of officers of the Company submitted pursuant hereto,
shall remain operative and in full force and effect regardless of any
termination of the applicable Terms Agreement (including this Agreement as
incorporated by reference therein), or any investigation made by or on behalf of
any Underwriter or controlling person, or by or on behalf of the Company, and
shall survive delivery of any Securities to the Underwriters.
21
SECTION 9. Termination. The Representatives may terminate the applicable
Terms Agreement (including this Agreement, as incorporated by reference
therein), immediately upon notice to the Company, at any time at or prior to the
applicable Closing Time (i) if there has been, since the date of such Terms
Agreement or since the respective dates as of which information is given in the
Registration Statement, any material adverse change in the condition, (financial
or otherwise), earnings, results of operations, business or properties of the
Company and its subsidiaries considered as one enterprise, whether or not from
transactions arising in the ordinary course of business, or (ii) if there has
occurred any outbreak or escalation of hostilities or other calamity or crisis
the effect of which on the financial markets of the United States is such as to
make it, in the reasonable judgment of the Representatives, impracticable to
market the Securities or enforce contracts for the sale of the Securities, or
(iii) if trading in the Common Stock of the Company has been suspended by the
Commission or a national securities exchange, or if trading generally on either
the American Stock Exchange or the New York Stock Exchange has been suspended,
or minimum or maximum prices for trading have been fixed, or maximum ranges for
prices for securities have been required, by either of said exchanges or by
order of the Commission or any other governmental authority, or if a banking
moratorium has been declared by either Federal or New York authorities. In the
event of any such termination, (x) the covenants set forth in Section 3 with
respect to any offering of Securities purchased from the Company pursuant to the
applicable Terms Agreement and (y) the covenant set forth in Section 3(c), the
provisions of Section 5, the indemnity agreement set forth in Section 6, the
contribution provisions set forth in Section 7, and the provisions of Sections 8
and 13 shall remain in effect.
SECTION 10. Default. If one or more of the Underwriters shall fail at the
applicable Closing Time to purchase the Securities which it or they are
obligated to purchase under the applicable Terms Agreement (the "Defaulted
Securities"), then the Representatives shall have the right, within 24 hours
thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth. If, however, during such 24 hours you shall not have
completed such arrangements for the purchase of all of the Defaulted Securities,
then:
(a) if the aggregate principal amount of Defaulted Securities does not
exceed 10% of the aggregate principal amount of the Securities to be purchased
pursuant to such Terms Agreement, the nondefaulting Underwriters shall be
obligated to purchase the full amount thereof in the proportions that their
respective underwriting obligations under the applicable Terms Agreement
(including this Agreement as incorporated by reference therein) bear to the
underwriting obligations of all such non-defaulting Underwriters, or
(b) if the aggregate principal amount of Defaulted Securities exceeds 10%
of the aggregate principal amount of the Securities to be purchased pursuant to
such Terms Agreement, such Terms Agreement (including this Agreement as
incorporated by reference therein) shall terminate, without any liability on the
part of any non-defaulting Underwriter or the Company.
22
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
the applicable Terms Agreement or this Agreement.
In the event of a default by any Underwriter or Underwriters as set forth
in this Section, either the Representatives or the Company shall have the right
to postpone the applicable Closing Time for a period not exceeding seven days in
order that any required changes in the Registration Statement or the Final
Prospectus or in any other documents or arrangements may be effected.
SECTION 11. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to you as provided in the applicable Terms
Agreement. Notices to the Company shall be directed to it at Tandy Corporation,
0000 Xxx Xxxxx Xxxxxx, Xxxx Xxxxx, Xxxxx 00000, attention of the Secretary with
a copy to the Treasurer.
SECTION 12. Parties. The applicable Terms Agreement and this Agreement
shall inure to the benefit of and be binding upon the Underwriters and the
Company, and their respective successors. Nothing expressed or mentioned in the
applicable Terms Agreement or this Agreement is intended or shall be construed
to give any person, firm or corporation, other than the parties hereto or
thereto and their respective successors and the controlling persons and officers
and directors referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of the applicable Terms Agreement or this Agreement or any provision
therein or herein contained. The applicable Terms Agreement and this Agreement
and all conditions and provisions thereof and hereof are intended to be for the
sole and exclusive benefit of the parties and their respective successors and
said controlling persons and officers and directors and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation. No
purchaser of Securities from any Underwriter shall be deemed to be a successor
by reason merely of such purchase.
SECTION 13. Governing Law. THIS AGREEMENT AND EACH TERMS AGREEMENT SHALL BE
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
Very truly yours,
TANDY CORPORATION
By______________________________
Name:
Title:
23
EXHIBIT A
TANDY CORPORATION
Debt Securities
TERMS AGREEMENT
Dated: _________ __, 199__
To: Tandy Corporation
0000 Xxx Xxxxx Xxxxxx
Xxxx Xxxxx, Xxxxx 00000
Dear Sirs:
We understand that Tandy Corporation, a Delaware corporation (the
"Company"), proposes to issue and sell its Debt Securities having an aggregate
initial public offering price or purchase price of _____________ (as described
in more detail below, the "Securities"). Subject to the terms and conditions set
forth herein or incorporated by reference herein, the underwriter(s) named below
(the "Underwriter(s)") hereby offer(s) to purchase such Securities.
The Securities to be purchased by the Underwriter(s), which are to be
issued under an Indenture dated as of May 1, 1997 between the Company and The
Chase Manhattan Bank, as Trustee, as supplemented from time to time by
supplemental indentures and/or modified from time to time by resolutions of the
Board of Directors of the Company as provided in Section 301 of such indenture,
shall have the following terms:
Date of maturity:
Interest rate:
Interest payment dates:
Public offering price:
Purchase price:
Redemption provisions:
Type of Offering: [Delayed Offering or Non-Delayed Offering]
Form of Securities: [Book Entry] [Certificated]
Delayed Delivery Contracts: [authorized] [not authorized]
Delivery date:
Minimum contract:
A-1
Maximum aggregate principal amount:
Fee: %
Closing date and location:
Payment Information:
Manager or Co-Managers:
Current ratings:
All of the provisions contained in the document entitled "Tandy Corporation
Debt Securities, Underwriting Agreement-Basic Provisions", dated as of _________
__, 199_, a copy of which is attached hereto as Annex A, are herein incorporated
by reference in their entirety and shall be deemed to be a part of this
Agreement to the same extent as if such provisions had been set forth in full
herein. Terms defined in such document are used herein as therein defined. Each
Underwriter severally agrees, subject to the terms and provisions of this Terms
Agreement, including the terms and provisions incorporated by reference herein,
to purchase the principal amount of Securities set forth opposite its name.
Name Principal Amount
---- ----------------
---------------
Total..................
===============
Any notice by the Company to the Underwriter(s) pursuant to this Terms
Agreement shall be in writing and shall be deemed to have been duly given if
mailed or transmitted by any standard form of telecommunication addressed to:
____________
The Company acknowledges that [the statements set forth in the last
paragraph of the cover page and in the ________ paragraphs[s] under the caption
"Underwriting"] in the Final Prospectus constitute the only information
furnished in writing by or on behalf of any Underwriter expressly for use in the
Registration Statement relating to the Securities as originally filed or in any
amendment thereof, any related Preliminary Final Prospectus or the Final
Prospectus or in any amendment thereof or supplement thereto, as the case may
be.
Please accept this offer by signing a copy of this Terms Agreement in the
space set forth below and returning the signed copy to us.
[Managers]
A-2
By_________________________________
Vice President
Accepted:
Tandy Corporation
By____________________________
A-3
EXHIBIT B
TANDY CORPORATION
Debt Securities
DELAYED DELIVERY CONTRACT
_________ __, 199__
Tandy Corporation
c/o [Name and address of Representatives]
Attention:
Dear Sirs:
The undersigned hereby agree to purchase from Tandy Corporation (the
"Company"), and the Company agrees to sell to the undersigned on ________ __,
199_ (the "Delivery Date"), principal amount of the Company's Debt Securities
due ________ __, 199_ (the "Securities"), offered by the Company's Prospectus
dated 199_, as supplemented by its Prospectus Supplement dated _________ __,
199_, receipt of which is hereby acknowledged, at a purchase price of ___% of
the principal amount thereof, plus accrued interest from 199_, to the Delivery
Date, and on the further terms and conditions set forth in this contract
Payment for the Securities which the undersigned has agreed to purchase on
the Delivery Date shall be made to the Company or by wire transfer in same day
funds, on the Delivery Date, upon delivery to the undersigned at the office of
[name and address of Representatives], of the Securities to be purchased by the
undersigned in definitive form and in such denominations and registered in such
names as the undersigned may designate by written or telegraphic communication
addressed to the Company not less than five full business days prior to the
Delivery Date.
The obligation of the undersigned to take delivery of and make payment for
Securities on the Delivery Date shall be subject only to the conditions that (1)
the purchase of Securities to be made by the undersigned shall not on the
Delivery Date be prohibited under the laws of the jurisdiction to which the
undersigned is subject and (2) the Company, on or before ____________ __, 199_,
shall have sold to the Underwriters of the Securities (the "Underwriters") such
principal amount of the Securities as is to be sold to them pursuant to the
Terms Agreement dated ___________ __, 199_ between the Company and the
Underwriters. The obligation of the undersigned to take delivery of and make
payment for Securities shall not be affected by the failure of any purchaser to
take delivery of and make payment for Securities pursuant to other contracts
similar to this contract. The undersigned represents and warrants to you that
its investment in the Securities is not, as of the date hereof, prohibited under
the laws of any jurisdiction to which the undersigned is subject and which
govern such investment.
B-1
Promptly after completion of the sale to the Underwriters, the Company will
mail or deliver to the undersigned at its address set forth below notice to such
effect, accompanied by a copy of the opinion of counsel for the Company
delivered to the Underwriters in connection therewith.
By the execution hereof, the undersigned represents and warrants to the
Company that all necessary corporate action for the due execution and delivery
of this contract and the payment for and purchase of the Securities has been
taken by it and no further authorization or approval of any governmental or
other regulatory authority is required for such execution, delivery, payment or
purchase, and that, upon acceptance hereof by the Company and mailing or
delivery of a copy as provided below, this contract will constitute a valid and
binding agreement of the undersigned in accordance with its terms.
[Name of Purchaser]
By____________________________
Accepted:
Tandy Corporation
By____________________________