Registration Statement for Securities Offered Pursuant to a Transaction — Form S-3
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-3 Registration Statement for Securities Offered 16 106K
Pursuant to a Transaction
2: EX-1.A Underwriting Agreement Standard Provisions 19 66K
3: EX-1.B Underwriting Agreement 5 13K
4: EX-4 First Chicago Indenture 96 287K
5: EX-5 ON&W Opinion/Consent 2 11K
6: EX-12 Computation of Ratios 1 8K
7: EX-23.A Coopers & Lybrand Consent 1 7K
8: EX-24.A Copy of Resolution 2 9K
9: EX-24.B Power of Attorney 2± 10K
10: EX-25 Form T-1 7 30K
EX-1.A — Underwriting Agreement Standard Provisions
Exhibit Table of Contents
EXHIBIT 1 (a)
BROWN-FORMAN CORPORATION
UNDERWRITING AGREEMENT
STANDARD PROVISIONS
(DEBT SECURITIES)
________________, 1994
From time to time, Brown-Forman Corporation, a Delaware corporation (the
"Company"), may 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
sometimes referred to as "this Agreement". Terms defined in the Underwriting
Agreement are used herein as therein defined.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement, including a prospectus, relating to debt
securities (the "Debt Securities") and has filed with, or transmitted for filing
to, or shall promptly hereafter file with or transmit for filing to, the
Commission a prospectus supplement (the "Prospectus Supplement") specifically
relating to the Offered Securities pursuant to Rule 424 under the Securities Act
of 1933, as amended (the "Securities Act"). The term "Registration Statement"
means the registration statement, including the exhibits thereto, as amended to
the date of this Agreement. The term "Basic Prospectus" means the prospectus
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 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. The Company represents and warrants to
and agrees with each of the Underwriters that:
(a) The Registration Statement has become effective, no stop order
suspending the effectiveness of the Registration Statement is in effect, and no
proceedings for such purpose are pending before or threatened by the Commission.
(b) (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) no part of
the Registration Statement, when such part became effective, contained, and no
such part, if amended or supplemented will 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, if amended or supplemented, 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 relating to
any Underwriter furnished to the Company in writing by such Underwriter through
the Manager expressly for use therein or (B) to that part of the Registration
Statement that constitutes the Statement of Eligibility (Form T-1) under the
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), of the
Trustee.
(c) 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
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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
subsidiaries, taken as a whole.
(d) Each of Lenox, Incorporated and Jack Daniel Distillery, Lem Motlow,
Prop., Inc. (the "Significant 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 subsidiaries, taken as a whole.
(e) This Agreement has been duly authorized, executed, and delivered by
the Company.
(f) The Indenture 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 agreement of the Company, enforceable in accordance with its
terms except as (i) the enforceability thereof may be limited by bankruptcy,
insolvency, or similar laws affecting creditors' rights generally and (ii)
rights of acceleration and the availability of equitable remedies may be limited
by equitable principles of general applicability.
(g) The Offered Securities have been duly authorized and, when executed
and authenticated in accordance with the provisions of the Indenture and
delivered to and paid for by the Underwriters in accordance with the terms of
the Underwriting Agreement, will be entitled to the benefits of the Indenture
and will be valid and binding obligations of the Company, in each case
enforceable in accordance with their respective terms except as (i) their
enforceability may be limited by bankruptcy, insolvency, or similar laws
affecting creditors' rights generally and (ii) rights of acceleration, if any,
and the availability of equitable remedies may be limited by equitable
principles of general applicability.
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(h) The execution and delivery by the Company of, and the performance by
the Company of its obligations under, this Agreement, the Indenture, and the
Offered Securities will not contravene any provision of applicable law or 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 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 subsidiary, 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
Indenture or the Offered Securities, 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.
(i) 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 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).
(j) There are no legal or governmental proceedings pending or, to the
Company's knowledge, threatened to which the Company or any of its subsidiaries
is a party or to which any of the properties of the Company or any of its
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 exhibits to the Registration Statement that are not described,
filed, or incorporated as required.
(k) The Company is not an "investment company" or an entity "controlled"
by an "investment company" as such terms are defined in the Investment Company
Act of 1940, as amended.
2. Public Offering. The Company is advised by the Manager that the
Underwriters propose to make a public offering of their respective portions of
the Offered Securities as soon after this Agreement has been entered into as in
the Manager's judgment is advisable. The terms
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of the public offering of the Offered Securities are set forth in the
Prospectus.
3. Purchase and Delivery. Except as otherwise provided in this Section 3,
payment for the Offered Securities shall be made by certified or official bank
check or checks payable to the order of the Company in New York Clearing House
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 Securities registered in such names and in such denominations as
the Manager shall request in writing not less than two full business days prior
to the date of delivery, with any transfer taxes payable in connection with the
transfer of the Offered Securities to the Underwriters duly paid.
4. Conditions to Closing. The several obligations of the Underwriters
hereunder are subject to the following conditions:
(a) After the execution and delivery of the Underwriting Agreement and
before 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 Company and its subsidiaries, taken as a whole, from that set
forth in the Prospectus (exclusive of any amendments 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
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signed by an executive officer of the Company, to the effect set forth in
clause (a)(i) above and to the effect that the representations and
warranties of the Company contained in this Agreement are true and correct
as of the Closing Date and that the Company 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 officer signing and delivering such certificate may rely upon the
best of his knowledge as to proceedings threatened.
(c) The Manager shall have received on the Closing Date an opinion of
independent counsel for 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 subsidiaries,
taken as a whole;
(ii) each Significant 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 subsidiaries, taken as
a whole;
(iii) this Agreement has been duly authorized, executed and
delivered by the Company;
(iv) the Indenture has been duly qualified under the Trust
Indenture Act and has been duly
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authorized, executed and delivered by the Company and is a valid and
binding agreement of the Company, enforceable in accordance with its
terms except as (a) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (b) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of general
applicability;
(v) the Debt Securities have been duly authorized and, when
executed and authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Underwriters in
accordance with the terms of the Underwriting Agreement, will be
entitled to the benefits of the Indenture and will be valid and
binding obligations of the Company, in each case enforceable in
accordance with their respective terms except as (a) the
enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (b) rights of
acceleration, if any, and the availability of equitable remedies may
be limited by equitable principles of general applicability;
(vi) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement,
the Indenture and the Offered Securities will not contravene any
provision 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 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 subsidiary, 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 Indenture or the
Offered Securities 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;
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(vii) the statements (1) in the Prospectus under the captions
"Description of Debt Securities," and "Plan of Distribution", (2) in
the Registration Statement under Item 15, (3) in "Item 3 - Legal
Proceedings" of the Company's most recent annual report on Form 10-K
incorporated by reference in the Prospectus and (4) in "Item 1 - Legal
Proceedings" of Part II of the Company's quarterly reports on Form
10-Q, if any, filed since such annual report, 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;
(viii) 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 subsidiaries is a party or to which any of the
properties of the Company or any of its subsidiaries 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 as required;
(ix) the Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in
the Investment Company Act of 1940, as amended; and
(x) such counsel (1) is of the opinion that each document, if
any, filed pursuant to the Exchange Act and incorporated by reference
in the Prospectus (except for financial statements and schedules
included therein as to which such counsel need not express any
opinion) 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) believes that (except for financial
statements and schedules as to which such counsel need not express any
belief and except for that part of the Registration Statement that
constitutes the
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Form T-1 heretofore referred to) each part of the Registration
Statement, when such part became effective did not, and as of the date
such opinion is delivered, does 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,
(3) is of the opinion that the Registration Statement and Prospectus
(except for financial statements and schedules included therein as to
which such counsel need not express any opinion) comply as to form in
all material respects with the Securities Act and the applicable rules
and regulations of the Commission thereunder and (4) believes that
(except for financial statements and schedules as to which such
counsel need not express any belief) the Prospectus as of the date
such opinion is delivered does not contain 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.
(d) The Manager shall have received on the Closing Date an opinion of
Davis Polk & Wardwell, counsel for the Underwriters, dated the Closing
Date, covering the matters referred to in subparagraphs (iii), (iv), (v),
(vii) (but only as to the statements in the Prospectus under "Description
of Debt Securities" and "Plan of Distribution") and (x) (2), (3) and (4) of
paragraph (c) above.
With respect to the subparagraph (x) of paragraph (c) above, Company
counsel may state that their opinion and belief are based upon their
participation in the preparation of the Registration Statement and Prospectus
and any amendments or supplements thereto 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 clauses
(2), (3) and (4) of subparagraph (x) of paragraph (c) above, Davis Polk &
Wardwell may state that their opinion and belief are based upon their
participation in the preparation of the Registration Statement and Prospectus
and any amendments or supplements thereto (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.
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The opinion of Company counsel described in paragraph (c) above shall
be rendered to you at the request of the Company and shall so state therein.
(e) The Manager shall have received on the Closing Date a letter,
dated the Closing Date, in form and substance satisfactory to the Manager,
from Coopers & Lybrand, independent public accountants, containing
statements and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements
and certain financial information contained in or incorporated by reference
into the Prospectus.
5. Covenants of the Company. In further consideration of the
agreements of the Underwriters herein contained, the Company covenants as
follows:
(a) To furnish the Manager, without charge, a signed copy of the
Registration Statement (including exhibits 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 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, file with the Commission and furnish, at its own
expense, to the Underwriters and to the dealers (whose names and
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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 so that the statements in the Prospectus as so amended or
supplemented will not, in the light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus, as amended or supplemented, will comply with law.
(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 qualification for as long as
the Manager shall reasonably request.
(e) To make generally available to its 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 this 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
last 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. For the
purposes of this paragraph, an earning statement shall be deemed to be
"made available" if the Company is required to file reports with the
Securities and Exchange Commission and has filed such report or reports.
(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 debt securities of the
Company or warrants to purchase debt securities of the Company
substantially similar to the Offered 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 its obligations under this
Agreement, including: (i) the preparation and filing of the
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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 and of the Trustee and its 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 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,
and (vii) any fees charged by rating agencies for the rating of the Offered
Securities.
6. Covenants of the Underwriters.
Each of the several Underwriters represents and agrees with the
Company that:
(a) except to the extent permitted under U.S. Treas. Reg. Section
1.163-5(c)(2)(i)(D) (the "D Rules"), (i) it has not offered or sold, and
during the restricted period will not offer or sell, Debt Securities in
bearer form (including any Debt Security in global form that is
exchangeable for Debt Securities in bearer form) to a person who is within
the United States or its possessions or to a United States person and (ii)
it has not delivered and will not deliver within the United States or its
possessions definitive Debt Securities in bearer form that are sold during
the restricted period;
(b) it has, and throughout the restricted period will have, in effect
procedures reasonably designed to ensure that its employees or agents who
are directly engaged in selling Debt Securities in bearer form are aware
that such Debt Securities may not be offered or sold during the restricted
period to a person who is within the United States or its possessions or to
a United States person, except as permitted by the D Rules;
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(c) if it is a United States person, it is acquiring the Debt
Securities in bearer form for purposes of resale in connection with their
original issuance and if it retains Debt Securities in bearer form for its
own account, it will only do so in accordance with the requirements of U.S.
Treas. Reg. Section 1.163-5(c)(2)(i)(D)(6);
(d) if it transfers to any affiliate Debt Securities in bearer form
for the purpose of offering or selling such Debt Securities during the
restricted period, it will either (i) obtain from such affiliate for the
benefit of the Company the representations and agreements contained in
clauses (a), (b) and (c) or (ii) repeat and confirm the representations and
agreements contained in clauses (a), (b) and (c) on such affiliate's behalf
and obtain from such affiliate the authority to so obligate it;
(e) it will obtain for the benefit of the Company the representations
and agreements contained in clauses (a), (b), (c) and (d) from any person
other than its affiliate with whom it enters into a written contract, as
defined in U.S. Treas. Reg. Section 1.163-5(c)(2)(i)(D)(4) for the offer or
sale during the restricted period of Debt Securities in bearer form; and
(f) it will comply with or observe any other restrictions or
limitations set forth in the Prospectus on persons to whom, or the
jurisdictions in which, or the manner in which, the Debt Securities may be
offered, sold, resold or delivered.
All other terms used in the preceding paragraph have the meaning given to them
by the U.S. Internal Revenue Code (the "Code") and regulations thereunder,
including the D Rules. The restricted period is defined at U.S. Treas. Reg.
Section 1.163-5(c)(2)(i)(D)(7).
7. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Underwriter and 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 from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or any amendment
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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 alleged
untrue statement or omission based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through the Manager
expressly for use therein; provided 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 Notes, or any person controlling such Underwriter, if a
copy of the Prospectus (as then amended or supplemented if the Company 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 Debt
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.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Registration Statement and each person, if any, who controls the Company within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the foregoing indemnity from the Company to
such Underwriter, but only with reference to information relating to such
Underwriter furnished to the Company in writing by such Underwriter through the
Manager expressly for use in the Registration Statement, any preliminary
prospectus, the Prospectus or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to either paragraph (a) or (b) above, 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
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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 paragraph (a) above, and by the Company, in
the case of parties indemnified pursuant to paragraph (b) above. The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any pending
or threatened proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such proceeding.
(d) To the extent the indemnification provided for in paragraph (a)
or (b) of this Section 8 is unavailable to an indemnified party or insufficient
in respect of any losses, claims, damages or liabilities referred to therein,
then each indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the
other hand from the offering of the 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
15
but also the relative fault of the Company on the one hand and of the
Underwriters on the other hand in connection with the statements or omissions
that resulted in such losses, claims, damages or liabilities, as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters on the other hand in connection
with the offering of the 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 total
underwriting discounts and commissions received by the Underwriters, 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 on the one hand and the Underwriters on the other hand
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company or by
the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Underwriters' respective obligations to contribute pursuant to this Section
7 are several in proportion to the respective principal amounts of Offered
Securities they have purchased hereunder, and not joint.
(e) The Company and the Underwriters agree that it would not be just
or equitable if contribution pursuant to this Section 7 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in paragraph (d) above. The amount paid or
payable by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 7, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the 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 alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
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contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 7 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.
8. Termination. This Agreement shall be subject to termination by
notice given by the Manager to the Company, if (a) 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
National Association of Securities Dealers, Inc., the Chicago Board of Options
Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade, (ii)
trading of any securities of the Company shall have been suspended on any
exchange or in any over-the-counter market, (iii) a general moratorium on
commercial banking activities in New York shall have been declared by either
Federal or New York State authorities or (iv) there shall have occurred any
outbreak or escalation of hostilities or any change in the U.S. financial
markets or any calamity or crisis that, in the judgment of the Manager, is
material and adverse and (b) in the case of any of the events specified in
clauses (a)(i) through (iv), such event, singly or together with any other such
event, 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.
9. Defaulting Underwriters. If, on the Closing Date, any one or more
of the Underwriters shall fail or refuse to purchase Offered Securities that it
has or they have agreed to purchase hereunder on such date, and the aggregate
amount of Offered Securities which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate amount of the Offered Securities to be purchased on such date, the
other Underwriters shall be obligated severally in the proportions that the
amount of Offered Securities set forth opposite their respective names in the
Underwriting Agreement bears to the aggregate amount of Offered 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 Securities
which such defaulting Underwriter or Underwriters agreed but failed or refused
to purchase on such date; provided that in no event shall the amount of Offered
Securities that any Underwriter has agreed to purchase pursuant to this
Agreement be increased pursuant to this Section 9 by an amount in excess of one-
ninth of such amount of Offered
17
Securities without the written consent of such Underwriter. If, on the Closing
Date, any Underwriter or Underwriters shall fail or refuse to purchase Offered
Securities and the aggregate amount of Offered Securities with respect to which
such default occurs is more than one-tenth of the aggregate amount of Offered
Securities to be purchased on such date, and arrangements satisfactory to the
Manager and the Company for the purchase of such Offered Securities are not made
within 36 hours after such default, this Agreement shall terminate without
liability on the part of any non-defaulting Underwriter or the Company. In any
such case either 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. Any action taken under
this paragraph shall not relieve any defaulting Underwriter from liability in
respect of any default of such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering of the Offered Securities.
10. Representations and Indemnities to Survive. The respective
indemnity and contribution agreements and the representations, warranties and
other statements of 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 and
(iii) acceptance of and payment for any of the Offered Securities.
11. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers, directors and controlling persons referred to in Section 7, and no
other person will have any right or obligation hereunder.
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12. 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.
13. Applicable Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.
14. 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.
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Dates Referenced Herein and Documents Incorporated by Reference
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