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Title: |
Equity Units Terms Agreement |
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Entities: |
Alltel Corp.; Banc of America Securities LLC; Banc One Capital Markets, Inc.; CenturyTel, Inc.; First Union National Bank; McDonald Investments Inc.; Salomon Smith Barney Inc.; Smith Barney Inc.; Suntrust Capital Markets, Inc.; Verizon Communications Inc.; Wachovia Bank, NA; Wachovia Securities Inc.; Merrill Lynch & Co., Inc.; Kutak Rock LLP; Shearman & Sterling |
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Date: |
2002 |
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Size: |
112KB total |
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Price: |
$56 |
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ID: |
#339113 |
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ALLTEL CORPORATION
(a Delaware corporation)
EQUITY UNITS
TERMS AGREEMENT
Dated: April 30, 2002
ALLTEL Corporation
One Allied Drive
Little Rock, AR 72202
We, the underwriters named below (the "Underwriters"), understand that
ALLTEL Corporation, a Delaware corporation (the "Company"), proposes to issue
and sell 25,000,000 of its Equity Units (the "Initial Securities") consisting
25,000,000 units (referred to as "Corporate Units") with a stated amount, per
Corporate Unit, of $50 (the "Stated Amount"). Each Corporate Unit will initially
consist of (a) a stock purchase contract (a "Purchase Contract") under which (i)
the holder will agree to purchase from the Company on May 17, 2005 (the
"Purchase Contract Settlement Date"), for an amount of cash equal to the Stated
Amount, a number of newly issued shares of common stock, $1.00 par value (the
"Common Stock"), of the Company equal to the Settlement Rate (as defined in the
Purchase Contract Agreement) and (ii) the Company will pay to the holder
quarterly contract adjustment payments at the rate of 1.50% of the Stated Amount
and (b) $50 principal amount of the Company's senior notes due May 17, 2007 (a
"Note") issued pursuant to the Indenture with an initial interest rate of 6.25%
per year.
The Company also proposes to grant to the several Underwriters an option to
purchase up to an additional 3,750,000 Corporate Units to cover any
over-allotments (the "Option Securities"; the Option Securities, together with
the Initial Securities, being hereinafter called the "Securities").
Subject to the terms and conditions set forth herein or incorporated by
reference herein, and based upon the representations and warranties incorporated
by reference herein, the Underwriters offer to purchase, severally and not
jointly, the number of Securities set forth below opposite their respective
names at the purchase price set forth below.
{TABLE}
{CAPTION}
Underwriter Number Number
of Initial Securities of Option Securities
{S} {C} {C}
Merrill Lynch, Pierce, Fenner & Smith
Incorporated 7,500,000 1,125,000
--------------- --------------
Banc of America Securities LLC 7,500,000 1,125,000
--------------- --------------
Salomon Smith Barney Inc. 7,500,000 1,125,000
--------------- --------------
Wachovia Securities, Inc. 1,250,000 187,500
--------------- --------------
Banc One Capital Markets, Inc. 312,500 46,875
--------------- --------------
McDonald Investments Inc. 312,500 46,875
--------------- --------------
Stephens Inc. 312,500 46,875
--------------- --------------
SunTrust Capital Markets, Inc. 312,500 46,875
--------------- --------------
Total 25,000,000 3,750,000
--------------- --------------
{/TABLE}
{PAGE}
The Securities shall have the terms described in the Preliminary Prospectus
Supplement with respect to the Securities dated April 25, 2002 and the following
additional terms:
Public offering price: 100.0% ($1,250,000,000)
----------- -------------
Underwriting Discount: 3.0% 37,500,000
----------- -------------
Purchase Price: 97.0% ($1,212,500,000)
----------- -------------
The Settlement Rate will be calculated as follows:
(a) if the Applicable Market Value (as defined below) of Common Stock is
equal to or greater than the Threshold Appreciation Price (as defined
below), the Settlement Rate will be 0.8280 shares of Common Stock;
(b) if the Applicable Market Value of Common Stock is less than the
Threshold Appreciation Price but greater than the Reference Price (as
defined below), the Settlement Rate will be equal to the stated amount
of $50 divided by the Applicable Market Value; and
(c) if the Applicable Market Value is less than or equal to the Reference
Price, the Settlement Rate will be 1.0101 shares of Common Stock.
The "Applicable Market Value" means the average of the closing price per
share of Common Stock on each of the 20 consecutive trading days ending on the
third trading day immediately preceding May 17, 2005. The "Reference Price" is
$49.50. The "Threshold Appreciation Price" is $60.39.
Subject to the following provisions, all the terms contained in the
document attached as Annex A hereto entitled "ALLTEL Corporation - Underwriting
Agreement Equity Units - Basic Provisions" (the "Basic Provisions") are hereby
incorporated by reference in their entirety herein and shall be deemed to be a
part of this Terms Agreement to the same extent as if such provisions had been
set forth in full herein. This Terms Agreement prevails if there is any
inconsistency with the terms of the Basic Provisions.
Terms defined in the Basic Provisions are used herein as therein defined,
unless otherwise defined or the context requires otherwise.
1. For the purposes of Section 2(c) of the Basic Provisions, (i) payment
of the purchase price for the Initial Securities will be made to the Company at
the offices of Shearman & Sterling, New York, New York at 9:00 a.m. (New York
time), on the third business day following the date of this Terms Agreement or
at such other place, time and date as the Representatives and the Company may
agree upon, and (ii) for the purposes of expediting the checking of the Initial
Securities by the Representatives, the Company agrees to make the Initial
Securities available to the Depository not later than 12.00 noon (New York
time), on the business day before the Closing Date.
2. The Company has entered into an agreement to buy certain telephone
properties of Verizon Communications Inc. dated as of October 31, 2001 (the
"Verizon Acquisition") and a subsidiary of the Company has entered into an
agreement to purchase all of the shares of CenturyTel Wireless, Inc.
("CenturyTel Wireless") from CenturyTel Inc. dated as of March 19, 2002 (the
"CenturyTel Acquisition"). The Verizon Acquisition and the CenturyTel
Acquisition are hereinafter referred to as the "Pending Acquisitions." The
purchase agreements setting forth the terms and conditions applicable to the
Pending Acquisitions are hereinafter referred to collectively as the
"Acquisition Agreements." CenturyTel Wireless and its subsidiaries, as well as
any corporations comprising or forming part of the telephone properties of
Verizon Communications Inc. being purchased under the Verizon Acquisition, are
hereinafter referred to collectively as the "Acquisition Companies."
3. In addition to Section 1 of the Basic Provisions, the Company
represents and warrants to the Representatives and each other Underwriter as of
the date hereof (the "Representation Date"), as of the Closing Date (as referred
to in Section 2(c) of the Basic Provisions), and as of the Date of Delivery that
(as referred to in Section 2(b) of the Basic Provisions):
(a) The Company has delivered to the Underwriters a true
and correct copy of each of the Acquisition Agreements, together with all
related agreements and all schedules and
ii
{PAGE}
exhibits thereto, and there have been no amendments, alterations, modifications
or waivers of any of the provisions of any Acquisition Agreement since the form
in which it has been delivered to the Underwriters. Each of the Acquisition
Agreements has been duly authorized, executed and delivered by the Company
and/or its subsidiary, as applicable, and is a valid and binding agreement of
the Company and/or its subsidiary, as applicable.
4. The obligations of the Underwriters hereunder is subject to, in
addition to Section 5 of the Basic Provisions, the receipt by the Underwriters
of a letter from Arthur Andersen LLP to the effect that the audit of the
financial statements of the Company covered by the letter referred to in Section
5(c) of the Basic Provisions, was subject to their quality control system for
the U.S. accounting and auditing practice to provide reasonable assurance that
their engagement was conducted in compliance with professional standards, that
there was appropriate continuity of Arthur Andersen LLP personnel working on the
audit, availability of national office consultation, and availability of
personnel at foreign affiliates of Arthur Andersen LLP to conduct the relevant
portions of the audit.
5. As of the date of this Terms Agreement, the Underwriters acknowledge
receipt of a letter, dated as of the date hereof, in form and substance
satisfactory to the Underwriters, to the effect of the letter referred to in
Section 5(c) of the Basic Provisions.
Please accept this offer no later than 6.00 p.m. (Little Rock, Arkansas
time) by signing a copy of this Terms Agreement in the space set forth below
and returning the signed copy to us.
Very truly yours,
MERRILL LYNCH & CO.
BANC OF AMERICA SECURITIES LLC
SALOMON SMITH BARNEY INC.
WACHOVIA SECURITIES, INC.
BANC ONE CAPITAL MARKETS, INC.
MCDONALD INVESTMENTS INC.
STEPHENS INC.
SUN TRUST CAPITAL MARKETS, INC.
iii
{PAGE}
By: Merrill Lynch, Pierce, Fenner & Smith
Incorporated
By: /s/ MARK BUSH
--------------------
Authorized Signatory
{PAGE}
Accepted by: ALLTEL Corporation
By: /s/ JOE T. FORD
----------------------
Name: Joe T. Ford
----------------------
Title: Chairman and Chief
Executive Officer
----------------------
{PAGE}
ANNEX A
================================================================================
ALLTEL CORPORATION
(a Delaware corporation)
EQUITY UNITS
UNDERWRITING AGREEMENT - BASIC PROVISIONS
================================================================================
{PAGE}
UNDERWRITING AGREEMENT FOR EQUITY UNITS -BASIC PROVISIONS
ALLTEL Corporation (the "Company"), proposes to sell to the
Underwriters (as defined below) equity units ("Equity Units") of the Company.
Such Equity Units will be referred to herein as the "Initial Securities".
This is to confirm the arrangements with respect to the purchase of
Initial Securities from the Company by the Representatives and the several
Underwriters listed in the applicable terms agreement entered into between the
Representatives and the Company of which these Basic Provisions are Annex A
thereto (the "Terms Agreement") and are incorporated therein by reference. The
Terms Agreement, together with the provisions hereof, is herein referred to as
the "Agreement."
Terms defined in the Terms Agreement are used herein as therein
defined. If the Securities (as defined below) are to be purchased by an
underwriting syndicate, the term "Representatives" as used herein shall mean the
representatives of the members of the underwriting syndicate, and the term
"Underwriters" shall mean all the members of the underwriting syndicate,
including the Representatives. If the Securities are being purchased by one or
more underwriters and not by an underwriting syndicate, the terms
"Representatives" and "Underwriters" shall mean such underwriters. The terms
"Underwriters" and "Representatives" shall be interpreted in the singular or
plural, as appropriate in the context of the Terms Agreement.
The Equity Units will initially consist of the number of units set out
in the Terms Agreement (referred to as "Corporate Units") with a stated amount,
per Corporate Unit, set out in the Terms Agreement (the "Stated Amount"). Each
Corporate Unit will initially consist of (a) a stock purchase contract (a
"Purchase Contract") under which (i) the holder will agree to purchase from the
Company on the date set out in the Terms Agreement (the "Purchase Contract
Settlement Date"), for an amount of cash equal to the Stated Amount, a number of
newly issued shares of common stock, $1.00 par value of the Company (the "Common
Stock"), equal to the Settlement Rate (as defined in the Purchase Contract
Agreement referred to below) and (ii) the Company will pay to the holder
Contract Adjustment Payments (as referred to in the Purchase Contract Agreement
(defined below)), and (b) the Company's senior notes of such principal amount,
and due on such date, as set out in the Terms Agreement (a "Note") and issued
pursuant to the Indenture (as defined below).
The Company also proposes to grant to the several Underwriters an
option to purchase additional Corporate Units up to an additional amount set out
in the Terms Agreement to cover any over-allotments (the "Option Securities";
the Option Securities, together with the Initial Securities, being hereinafter
called the "Securities"). The Notes that will initially constitute a component
of the Corporate Units are hereinafter sometimes referred to as the "Underlying
Notes".
In accordance with the terms of the Purchase Contract Agreement, to be
dated as of May 6, 2002 (the "Purchase Contract Agreement"), between the Company
and J. P. Morgan Trust Company, National Association, as purchase contract agent
(the "Purchase Contract Agent"), the Underlying Notes will be pledged by the
Purchase Contract Agent, on behalf of the
{PAGE}
holders of the Corporate Units, to Wachovia Bank, National Association, as
collateral agent (the "Collateral Agent"), pursuant to the Pledge Agreement, to
be dated as of May 6, 2002 (the "Pledge Agreement"), among the Company, the
Purchase Contract Agent and the Collateral Agent, to secure the holders'
obligations to purchase the Common Stock under the Purchase Contracts. The
shares of Common Stock issuable pursuant to the Purchase Contracts are
hereinafter referred to as the "Shares".
The Notes will be issued under an Indenture dated as of January 1,
1987, by and between the Company and J. P. Morgan Trust Company, National
Association, successor to Society National Bank, as trustee (the "Trustee"), as
supplemented by a First Supplemental Indenture dated as of March 1, 1987, a
Second Supplemental Indenture dated as of April 1, 1989, a Third Supplemental
Indenture dated as of May 8, 1990, a Fourth Supplemental Indenture dated as of
March 1, 1991, a Fifth Supplemental Indenture dated as of October 15, 1993, a
Sixth Supplemental Indenture dated as of April 1, 1994, a Seventh Supplemental
Indenture dated as of September 1, 1995, an Eighth Supplemental Indenture dated
as of March 1, 1996, a Ninth Supplemental Indenture dated as of April 1, 1999,
and a Tenth Supplemental Indenture to be dated as of May 6, 2002 (collectively,
the "Indenture").
Pursuant to a Remarketing Agreement, to be dated as of May 6, 2002
(the "Remarketing Agreement"), between the Company, the Purchase Contract Agent
and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as the remarketing
agent, the Notes may be remarketed, subject to certain terms and conditions.
In accordance with the terms of the Rights Agreement between the
Company and First Union National Bank of North Carolina, as rights agent, dated
as of January 30, 1997 (the "Rights Agreement"), one right is granted for each
share of Common Stock outstanding on the record date and for each share of
Common Stock issued between the record date and the distribution date (as such
terms are defined in the Rights Agreement). Each right entitles the registered
holder to purchase from the Company in certain events one-one/thousandth
(1/1000) of a share of Series K, cumulative voting preferred stock, par value
$25.00 per share, of the Company (the "Preferred Stock").
As used in this Agreement, the term "Operative Documents" means this
Agreement, the Purchase Contract Agreement (including the Purchase Contracts),
the Pledge Agreement, the Remarketing Agreement, the Notes, the Indenture and
the certificates evidencing the Corporate Units.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 covering the registration of
certain securities, including the Securities, the Purchase Contracts, the
Underlying Notes and the Shares, and the offering thereof from time to time in
accordance with Rule 415 under the Securities Act of 1933, as amended (the
"Securities Act"), and has filed such amendments thereto as may have been
required to the date of the Terms Agreement. Such registration statement, as so
amended, and the prospectus constituting a part thereof (including, in each
case, all documents incorporated therein by reference) as they are from time to
time amended or supplemented by the filing of documents pursuant to the
Securities Act (including the Prospectus Supplement, as
2
{PAGE}
defined below) or the Securities Exchange Act of 1934, as amended (the "1934
Act"), are hereinafter called the "Registration Statement" and the "Prospectus,"
respectively.
SECTION 1. Representations and Warranties of the Company. The
---------------------------------------------
Company represents and warrants to the Representatives and each other
Underwriter named in the Terms Agreement as of the date thereof (the
"Representation Date"), as of the Closing Date (as defined in Section 2(c)) and
as of the Date of Delivery (as defined in Section 2(b)):
(a) At the time the Registration Statement became effective and as
of the Representation Date, the Registration Statement and the Prospectus
complied in all material respects with the provisions of the Securities Act, the
Trust Indenture Act of 1939 (the "1939 Act") and the rules and regulations of
the Commission thereunder (the "Regulations"), and the Indenture was qualified
under the 1939 Act. At the time the Registration Statement became effective and
as of the Representation Date, the Registration Statement did not, and will not
during the period specified in Section 3(b), 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. The Prospectus, at the
time the Registration Statement became effective and as of the Representation
Date, the Closing Date and the Date of Delivery, did not, and will not during
the period specified in Section 3(b), 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; provided, however, that none of the representations and warranties
in this subsection shall apply to statements in or omissions from the
Registration Statement or the Prospectus made in reliance upon and in conformity
with information furnished to the Company in writing by an Underwriter expressly
for use in the Registration Statement or the Prospectus or those exhibits to the
Registration Statement that constitute the Statement of Eligibility (Form T-1)
of the Trustee.
(b) The documents incorporated by reference in the Prospectus, at
the time they were or hereafter are filed with the Commission, complied and will
comply at all times during the period specified in Section 3(b) in all material
respects with the requirements of the 1934 Act and the rules and regulations of
the Commission thereunder (the "1934 Act Regulations") and, when read together
with the other information in the Prospectus, at the time the Registration
Statement became effective and as of the Representation Date, did not, and will
not during the period specified in Section 3(b), include 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
in which they were made, not misleading; provided, however, that none of the
representations and warranties in this subsection shall apply to statements in
or omissions from the Registration Statement or the Prospectus made in reliance
upon and in conformity with information furnished to the Company in writing by
an Underwriter expressly for use in the Registration Statement or the Prospectus
or those exhibits to the Registration Statement that constitute the Statement of
Eligibility (Form T-1) of the Trustee.
(c) The accountants who certified or who will certify the
financial statements included in the Registration Statement are, or will be,
with respect to the Company and its subsidiaries, independent public accountants
as required by the Securities Act and the Regulations.
3
{PAGE}
(d) The financial statements included in the Registration
Statement and Prospectus present fairly the financial position of the Company
and its consolidated subsidiaries as of the dates indicated and the results of
their operations for the periods specified and have been prepared in conformity
with generally accepted accounting principles applied on a basis which is
consistent in all material respects during the periods involved, and the
supporting schedules included in the Registration Statement present fairly the
information required to be stated therein.
(e) Neither the Company nor any subsidiary has a contingent
liability which is material to the Company and its subsidiaries considered as
one enterprise and which is not disclosed in the Registration Statement and
Prospectus.
(f) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus except as may otherwise be stated
therein: (i) there has not been any material adverse change or any development
involving a prospective material adverse change, nor does the Company have
reason to believe that any material adverse change or any development involving
a prospective material adverse change will occur, in the condition, financial or
otherwise, of the Company and its subsidiaries considered as one enterprise, or
in the business, properties, operations or income of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business (a "Material Adverse Effect"), (ii) neither the
Company nor any of its subsidiaries has entered into a transaction, other than
transactions in the ordinary course of business, which is material in relation
to the Company and its subsidiaries considered as one enterprise, (iii) there
has not been any dividend or distribution of any kind declared, paid or made by
the Company on its capital stock other than normal cash dividends, (iv) neither
the Company nor any subsidiary has incurred any liabilities or obligations
(direct or contingent) which are material to the Company and its subsidiaries
considered as one enterprise, except in the ordinary course of business, (v)
there has not been any change in the capital stock (other than by reason of the
exercise of stock options outstanding at the latest date as of which information
is given in the Registration Statement or the Prospectus, the conversion of
preferred stock or debentures outstanding at the latest date as of which
information is given in the Registration Statement or the Prospectus, the
issuance of shares pursuant to the Company's employee stock purchase plan or
employee stock ownership plan), any material increase in the short-term
indebtedness of the Company and its subsidiaries or any material increase in the
long-term indebtedness of the Company and its subsidiaries considered as one
enterprise, (vi) no action, suit or proceeding, at law or in equity, is pending
or, to the knowledge of the Company, threatened against or affecting the Company
or any of its subsidiaries, and no proceedings are pending or, to the knowledge
of the Company, threatened against or affecting the Company or any of its
subsidiaries before or by any governmental commission, board or other
administrative agency, wherein an unfavorable decision, ruling or finding would
materially adversely affect the consummation of the transactions contemplated in
this Agreement and the other Operative Documents or result in a Material Adverse
Effect, (vii) neither the Company nor any of its subsidiaries has sustained a
loss of, or damage to, its properties (whether or not insured) which would
result in a Material Adverse Effect, and (viii) no labor disturbance by the
employees of the Company or any of its subsidiaries has arisen or been
threatened which might result in a Material Adverse Effect.
4
{PAGE}
(g) The Company has been duly organized and is validly existing as
an organization in good standing under the laws of the State of Delaware with
full power and authority to own, lease and operate its properties, to conduct
its business as described in the Registration Statement, to issue and sell the
Securities and to enter into and perform the Operative Documents; each
subsidiary of the Company has been duly organized and is validly existing as an
organization in good standing under the laws of the jurisdiction of its
organization with full power to own, lease and operate its properties and
conduct its business as described in the Registration Statement; the Company and
each of its subsidiaries is duly qualified to transact business and is in good
standing in each of the jurisdictions in which the conduct of its business or
the ownership, leasing or operation of its properties or the existence of an
office requires such qualification, except where the failure to so qualify would
not result in a Material Adverse Effect; each subsidiary of the Company has
municipal consents or franchises, free from unduly burdensome restrictions or
those not customarily associated with such consents or franchises which,
together with its corporate powers, are adequate to enable it to carry on its
operations in the territory served by the subsidiary; and all of the issued and
outstanding capital stock of each subsidiary of the Company has been duly
authorized and validly issued and is fully paid and nonassessable, and the stock
of such subsidiaries owned by the Company is free and clear of any mortgages,
pledges, liens, encumbrances, claims or equities whatsoever (other than pledges
of stock of subsidiaries securing acquisition indebtedness not in excess of
$2,000,000 or as otherwise set forth or disclosed in the Registration Statement
or Prospectus).
(h) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus (except for subsequent issuances, if
any, pursuant to this Agreement, pursuant to reservations, agreements or
employee benefit plans referred to in the Prospectus or pursuant to the exercise
of convertible securities or options referred to in the Prospectus). The shares
of issued and outstanding capital stock of the Company have been duly authorized
and validly issued and are fully paid and non-assessable; none of the
outstanding shares of capital stock of the Company was issued in violation of
the preemptive or other similar rights of any security holder of the Company.
(i) This Agreement has been duly authorized, executed and
delivered on behalf of the Company and is the valid and legally binding
obligation of the Company enforceable in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency or other laws
relating to or affecting enforcement of creditors' rights and by general equity
principles.
(j) The Remarketing Agreement has been duly authorized by the
Company and when executed and delivered by the Company will constitute the valid
and binding obligation of the Company enforceable in accordance with its terms,
except as enforcement thereof may be limited by bankruptcy, insolvency or other
laws relating to or affecting enforcement of creditors' rights and by general
equity principles and except as rights to indemnification, contribution or
exculpation thereunder may not be enforceable, and will conform in all material
respects to the description thereof in the Prospectus.
(k) Each of the Purchase Contract Agreement, the Pledge Agreement,
the Rights Agreement and the Indenture has been duly authorized by the Company
and when executed and delivered by the Company will constitute the valid and
binding obligation of the
5
{PAGE}
Company enforceable in accordance with its terms, except as enforcement thereof
may be limited by bankruptcy, insolvency or other laws relating to or affecting
enforcement of creditors' rights and by general equity principles and except as
rights to indemnification, contribution or exculpation thereunder may not be
enforceable, and will conform in all material respects to the descriptions
thereof in the Prospectus.
(l) The Notes have been duly authorized by the Company and, at the
Closing Date, will have been validly executed by the Company and, when
authenticated, issued and delivered in the manner provided for in the Indenture
and delivered against payment for the Corporate Units of which they are a part
in accordance with the terms of this Agreement and the Indenture, will be
entitled to the benefits of the Indenture and constitute valid and binding
obligations of the Company, except as enforcement thereof may be limited by
bankruptcy, insolvency or other laws relating to or affecting enforcement of
creditors' rights and by general equity principles and will conform in all
material respects to the description thereof in the Prospectus.
(m) The Corporate Units have been duly authorized by the Company
and, when executed and delivered by the Company against payment of the
consideration therefor in accordance with the terms of this Agreement, will
constitute the valid and binding obligations of the Company enforceable in
accordance with their terms, except as enforcement thereof may be limited by
bankruptcy, insolvency or other laws relating to or affecting enforcement of
creditors' rights and by general equity principles, and will conform in all
material respects to the description thereof in the Prospectus. The Corporate
Units and the Shares will be duly registered under the 1934 Act and will be
authorized for listing on the New York Stock Exchange subject to official notice
of issuance, in each case, prior to the Closing Date; and the issuance of the
Corporate Units is not subject to preemptive or other similar rights.
(n) The Shares issuable pursuant to the Purchase Contract
Agreement have been duly authorized and reserved for issuance by the Company
and, when issued and delivered in accordance with the provisions of the Purchase
Contract Agreement, will be validly issued and fully paid and non-assessable;
and the issuance of such Shares is not and will not be subject to preemptive or
other similar rights.
(o) The Preferred Stock issuable pursuant to the Rights Agreement
has been duly authorized and reserved for issuance by the Company and, when
issued and delivered in accordance with the provisions of the Rights Agreement,
will be validly issued and fully paid and non-assessable; and the issuance of
such Preferred Stock is not and will not be subject to preemptive or other
similar rights.
(p) The Company is not in violation of its certificate of
incorporation or bylaws, and neither the Company nor any of its subsidiaries is
in default in the performance or observance of any material obligation,
agreement, covenant or condition contained in any bond, debenture, note or other
evidence of indebtedness or in any contract, indenture, mortgage, loan
agreement, lease, joint venture agreement or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by which any of them
or any of their properties may be bound, or in violation of any material
statute, order, rule, regulation, writ, injunction or decree of any government,
governmental instrumentality or court, domestic or foreign, except in
6
{PAGE}
each case where the violation or default would not result in a Material Adverse
Effect. The compliance with the terms of this Agreement and the other Operative
Documents, the incurrence of the obligations herein and therein set forth and
the consummation of the transactions herein and therein contemplated will not
(i) violate the certificate of incorporation or code of regulations or bylaws of
the Company or any of its subsidiaries or (ii) conflict with or result in a
breach of or default in the performance or observance of any obligation,
agreement, covenant or condition contained in any bond, debenture, note or other
evidence of indebtedness or any contract, indenture, mortgage, loan agreement,
lease, joint venture agreement or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which any of them or any of
their properties may be bound or violate any statute, order, rule, regulation,
writ, injunction or decree of any government, governmental instrumentality or
court, domestic or foreign except, in the case of clause (ii) immediately above,
where the violation would not result in a Material Adverse Effect.
(q) No approval of any court, governmental agency or public
regulatory body is necessary for the performance by the Company of its
obligations under this Agreement and the other Operative Documents, in
connection with the offering, issuance or sale of the Securities under this
Agreement and the issuance and sale of the Shares pursuant to the Purchase
Contracts or the consummation of the transactions contemplated by this Agreement
and the other Operative Documents, except such as may be required under state or
federal securities or "blue sky" laws and such as have already been received.
(r) There is no contract or document required to be described in
the Registration Statement or the Prospectus, or the documents incorporated by
reference therein or to be filed as an exhibit to the Registration Statement,
which is not described or filed as required.
(s) The Company or a subsidiary has good title to all of the
properties and assets reflected in the consolidated balance sheet of the Company
included in the Registration Statement, except properties and assets sold or
otherwise disposed of in the ordinary course of business after such date,
subject to no mortgages, liens, charges or encumbrances of any nature whatsoever
other than (i) as disclosed in the Registration Statement, (ii) defects and
encumbrances customarily found in the case of properties of like size and
character which do not impair the use of such properties by the Company or its
subsidiaries, or (iii) secured indebtedness in an amount not greater than
$500,000,000.
(t) The Company and its subsidiaries possess such permits,
licenses, approvals, consents and other authorizations (collectively,
"Governmental Licenses") issued by the appropriate federal, state, local or
foreign regulatory agencies or bodies necessary to conduct the business now
operated by them and material to them, taken as a whole; the Company and its
subsidiaries are in compliance with the terms and conditions of all such
Governmental Licenses, except where the failure so to comply would not, singly
or in the aggregate, result in a Material Adverse Effect; all of the
Governmental Licenses are valid and in full force and effect, except when the
invalidity of such Governmental Licenses or the failure of such Governmental
Licenses to be in full force and effect would not result in a Material Adverse
Effect; and neither the Company nor any of its subsidiaries has received any
notice of proceedings relating to the revocation or modification of any such
Governmental Licenses which, singly or in the aggregate,
7
{PAGE}
if the subject of an unfavorable decision, ruling or finding, would result in a
Material Adverse Effect.
Any certificate signed by any officer of the Company or any of its
subsidiaries and delivered to the Underwriters or to counsel for the
Underwriters shall be deemed a representation and warranty by the Company to
each Underwriter as to the matters covered thereby.
SECTION 2. Purchase and Sale.
-----------------
(a) The obligation of the Underwriters to purchase, and the
Company to sell, the Securities is evidenced by the Terms Agreement. The Terms
Agreement specifies the number and purchase price of the Securities, the names
of the Underwriters participating in the offering (subject to substitution as
provided in Section 11 hereof) and the number of Securities which each severally
has agreed to purchase, the purchase price to be paid by the Underwriters, the
initial public offering price, if any, of the Securities and any terms of the
Securities not already specified in the Purchase Contract Agreement (including,
but not limited to, designation, denominations, current ratings, interest rates
and payment dates, maturity and early settlement provisions).
(b) In addition, if set forth in the Terms Agreement, the Company
grants an option to the Underwriters, severally and not jointly, to purchase the
Option Securities up to the number set out in the Terms Agreement, at the price
per Security set out in the Terms Agreement. The option, if granted, will
expire 13 days after the date on which the Initial Securities are issued and may
be exercised once, but no more than once, in whole or in part only for the
purpose of covering any over-allotments which may be made in connection with the
offering and distribution of the Initial Securities upon notice by the
Representative to the Company setting forth the number of Option Securities as
to which the several Underwriters are exercising the option and the time and
date of payment and delivery for such Option Securities. Such time and date of
delivery (the "Date of Delivery") shall be determined by the Representative, but
shall not be earlier than three, nor later than seven, full business days after
the exercise of said option, nor in any event prior to the Closing Date, as
hereinafter defined. If the option is exercised as to all or any portion of the
Option Securities, each of the Underwriters, acting severally and not jointly,
will purchase that proportion of the total number of Option Securities being
purchased which the number of Initial Securities set forth in the Terms
Agreement opposite the name of such Underwriter bears to the total number of
Initial Securities, subject in each case to such adjustments as the
Representatives in their discretion shall make to eliminate any sales or
purchases of fractional securities.
(c) Payment of the purchase price for the Initial Securities to be
purchased by the Underwriters shall be made, against delivery of the Initial
Securities through the facilities of the Depository Trust Company (the
"Depository"), at such place and time as set out in the Terms Agreement. (The
date designated for the payment of the purchase price and the delivery of the
Securities is referred to herein as the "Closing Date").
(d) In addition, if any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option
8
{PAGE}
Securities shall be made at the place referred to in Section 2(c), or at such
other place as shall be agreed upon by the Representatives and the Company, on
the Date of Delivery as specified in the notice from the Underwriters to the
Company.
(e) Payment for the Securities shall be by federal wire transfer
in same-day funds. The Securities shall be delivered to the Underwriters in the
form of one or more global securities registered in the name of the Depository
or its nominee. For the purpose of expediting the checking of the Securities by
the Representatives, the Company agrees to make the Securities available to the
Depository not later than the time specified in the Terms Agreement, on the
business day before the Closing Date with respect to the Initial Securities or
not later than on the business day before the Date of Delivery with respect to
the Option Securities.
SECTION 3. Covenants of the Company. The Company agrees that:
------------------------
(a) Immediately following the execution of the Terms Agreement,
the Company will prepare a supplement to the Prospectus (the "Prospectus
Supplement") setting forth the number of Securities covered thereby and their
terms not otherwise specified in the Purchase Contract Agreement or the
Indenture, the names of the Underwriters participating in the offering and the
principal amount of Securities which each severally has agreed to purchase, the
names of the Underwriters, if any, acting as co-managers in connection with the
offering, the price at which the Securities are to be purchased by the
Underwriters from the Company, the initial public offering price, if any, the
selling concession and reallowance, if any, 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 Prospectus
Supplement to the Commission for filing pursuant to Rule 424 of the Regulations
and during the period specified in Section 3(b) will furnish to the Underwriters
named therein as many copies of the Prospectus and such Prospectus Supplement as
the Representatives shall reasonably request.
(b) If at any time during the period when a prospectus is required
by the Securities Act or the Regulations to be delivered in connection with the
sales of the Initial Securities or the Option Securities pursuant to this
Agreement, any event shall occur as a result of which it is necessary to further
amend or supplement the Prospectus so that it does not contain an untrue
statement of material fact, or does not omit to state a material fact necessary
to make the statements therein, in the light of the circumstances existing at
the time it is delivered to a purchaser, not misleading, or, if it shall be
necessary at any such time to amend or supplement the Registration Statement or
the Prospectus in order to comply with the requirements of the Securities Act or
the Regulations, the Company will promptly notify each Underwriter and 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 in order to
make the Prospectus not misleading or cause the Registration Statement to comply
with such requirements; provided that reasonable advance notice is given to the
Representatives by the Company of such proposed filing and provided further that
no such amendment or supplement will be filed with the Commission to which the
Representatives or counsel for the Underwriters shall reasonably object.
(c) During the period specified in Section 3(b), the Company will
notify each Underwriter immediately and confirm the notice in writing (i) when
any amendment to the
9
{PAGE}
Registration Statement shall have become effective, (ii) of the transmission,
mailing or other delivery to the Commission for filing of any supplement to the
Prospectus or any document to be filed pursuant to the 1934 Act, (iii) of the
receipt of any comments from the Commission with respect to the Registration
Statement or the Prospectus, (iv) of any request, written or oral, by the
Commission or any state securities regulatory authority for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or for
additional information and (v) of the issuance by the Commission or any state
securities regulatory authority of any stop order suspending the effectiveness
of the Registration Statement or of the initiation of any proceedings for that
purpose. The Company will make every reasonable effort to prevent the issuance
by the Commission or any state securities regulatory authority of any stop order
during the period specified in Section 3(b) and, if any such stop order shall at
any time be issued, to obtain the lifting thereof at the earliest possible
moment.
(d) The Company will deliver to each Representative, as soon as
available, one signed copy of the Registration Statement as originally filed and
one signed copy of all amendments thereto filed during the period specified in
Section 3(b) (in each case including all exhibits and other documents filed
therewith or incorporated by reference therein). The copy of the Registration
Statement and each amendment thereto furnished to the Representatives will be
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval
system ("EDGAR"), except to the extent permitted by Regulation S-T.
(e) During the period specified in Section 3(b), the Company will
deliver to the Underwriters, in accordance with the Representatives'
instructions, as many copies of the Prospectus as the Underwriters may
reasonably request. The Prospectus and any amendments or supplements thereto
furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR, except
to the extent permitted by Regulation S-T.
(f) The Company, during the period specified in Section 3(b), will
file promptly all documents required to be filed with the Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the 1934 Act; provided that advance notice
of such filing is provided to the Underwriters and to counsel for the
Underwriters.
(g) The Company will make generally available to its security
holders as soon as practicable, but not later than 90 days after the close of
the period covered thereby, an earnings statement (in form complying with the
provisions of Section 11(a) of the Securities Act and Rule 158 promulgated under
the Securities Act) covering a period of at least 12 months commencing with the
first fiscal quarter of the Company occurring after the effective date of the
Registration Statement.
(h) The Company will endeavor, in cooperation with the
Underwriters, to qualify the Securities for offering and sale under the
applicable securities laws of such jurisdictions as the Representatives may
designate; provided, however, that the Company shall not be obligated to file
any general consent to service of process or to qualify as a foreign corporation
or as a dealer in securities in any jurisdiction in which it is not so
qualified. In each jurisdiction in which Securities have been qualified as
above provided, the Company will make
10
{PAGE}
and file such statements and reports in each year as are or may be reasonably
required by the laws thereof.
(i) During a period of 90 days from the date of the Prospectus,
the Company will not, without the prior written consent of Merrill Lynch,
Pierce, Fenner & Smith Incorporated on behalf of the Underwriters, (i) directly
or indirectly, offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant for the sale of or otherwise transfer or dispose of
any Securities, Purchase Contracts, Common Stock or any security of the Company
similar to Securities, Purchase Contracts or Common Stock or any security
convertible into or exercisable or exchangeable for or repayable with
Securities, Purchase Contracts, Common Stock or any equity securities
substantially similar to the Securities, Purchase Contracts or Common Stock or
file any registration statement under the Securities Act with respect to any of
the foregoing; or (ii) directly or indirectly, enter into any swap or any other
agreement or any transaction that transfers, in whole or in part, the economic
consequence of ownership of the Securities, Purchase Contracts or Common Stock
or any security convertible into or exercisable or exchangeable for or
repayable with the Securities, Purchase Contracts, Common Stock or any equity
securities substantially similar to the Securities, Purchase Contracts or
Common Stock, whether any such swap or transaction described in clause (i) or
(ii) above is to be settled by delivery of Securities, Purchase Contracts,
Common Stock or such other securities, in case or otherwise. The foregoing
sentence shall not apply to (A) the Securities to be sold hereunder, (B) any
shares of Common Stock issued by the Company upon the exercise of an option or
warrant or the conversion of a security outstanding on the date hereof, (C) any
shares of Common Stock issued or options to purchase Common Stock granted
pursuant to existing employee benefit or stock plans of the Company, (D) any
shares of Common Stock issued pursuant to any non-employee director stock plan
or dividend reinvestment plan, (E) the Company's obligations to file any
registration statement under the Securities Act existing on the date hereof,
(F) issuances of common stock or securities convertible or exchangeable into
common stock pursuant to this clause (F) up to a cumulative aggregate principal
amount of $100,000,000 or (G) issuances of Common Stock or securities
convertible or exchangeable into Common Stock in connection with acquisitions
or mergers or in connection with strategic or significant investments; provided
that in each case set out in this clause (G) the recipient of such Common Stock
or securities convertible or exchangeable into Common Stock agrees to be bound
for any remaining portion of such 90 day period on the above terms.
(j) The Company shall take all reasonable action necessary to
enable each of Standard & Poor's Ratings Services, a division of McGraw Hill,
Inc. and Moody's Investors Services, Inc. to provide its credit rating of the
Securities.
(k) The Company will use its best efforts to effect the listing
of the Corporate Units on the New York Stock Exchange.
(l) During the period specified in Section 3(b), the Company will
not take, directly or indirectly, any action designed to or that would
constitute or that might reasonably be expected to cause or result, under the
1934 Act or otherwise, in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Securities
(other than stabilization and other activities that may be taken by the
Underwriters and which are
11
{PAGE}
described under the caption "Underwriting" in the Prospectus or any supplement
to the Prospectus).
(m) The Company will reserve and keep available at all times,
free of preemptive or other similar rights and liens and adverse claims, a
sufficient number of shares of Common Stock to satisfy its obligations to issue
Shares upon settlement of the Purchase Contracts.
SECTION 4. Payment of Expenses. The Company will pay all expenses
-------------------
incident to the performance of its obligations under this Agreement, including
expenses in connection with (i) the preparation, printing and filing of the
Registration Statement and Prospectus and the printing of this Agreement, the
Securities and the Indenture, (ii) the issuance and delivery of the Securities
to the Underwriters, including transfer agents' and registrars' fees, (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(h), including filing fees and the fees and
disbursements of counsel for the Underwriters in connection therewith and in
connection with the preparation of the Blue Sky Memorandum (which shall not in
any case exceed $5,000 without the written consent of the Company), (v) the
printing and delivery to the Underwriters, in quantities as hereinabove stated,
of copies of the Registration Statement and any amendments thereto and of the
Prospectus and any amendments or supplements thereto and (vi) the printing and
delivery to the Underwriters of copies of the Blue Sky Memorandum to be
prepared by counsel for the Underwriters.
Except as expressly provided in this Section 4, Section 7 and Section
8, the Underwriters will pay all of their costs and expenses, including fees
and disbursements of their counsel, stock transfer taxes payable on resale of
any of the Securities by them and any advertising expense connected with any
offers they may make.
If this Agreement is cancelled by the Underwriters in accordance with
the provisions of Section 5 (other than clause (b)(ii) of Section 5) or by the
Company in accordance with the provisions of Section 6 or is terminated by the
Underwriters in accordance with the provisions of Section 10(a)(i), the Company
shall reimburse the Underwriters for all of their out-of-pocket expenses,
including the reasonable fees and disbursements of counsel for the
Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The several
---------------------------------------
obligations of the Underwriters hereunder to purchase and pay for Securities on
the Closing Date are subject to the accuracy, as of the date of the Agreement
and as of the Closing Date, of the representations and warranties of the
Company, to the performance by the Company of its obligations hereunder, and to
the following conditions:
(a) At the Closing Date (i) no stop order suspending the
effectiveness of the Registration Statement shall have been issued under the
Securities Act or proceedings therefor initiated or threatened by the
Commission and any request on the part of the Commission for additional
information shall have been complied with to the reasonable satisfaction of
counsel to the Underwriters, (ii) the Prospectus containing information
relating to the description of the Securities, the specific method of
distribution and similar matters shall have been filed with the
12
{PAGE}
Commission in accordance with Rule 424(b)(1), (2), (3), (4) or (5), as
applicable (or any required post-effective amendment providing such information
shall have been filed and declared effective in accordance with the
requirements of Rule 430A), or, if the Company has elected to rely upon Rule
434 of the Regulations under the Securities Act, a term sheet including the
information, if any, deemed to be part thereof pursuant to Rule 434 of the
Regulations under the Securities Act shall have been filed with the Commission
in accordance with Rule 424(b)(7), (iii) the debt securities or preferred stock
of the Company shall not have had the rating assigned to them by any nationally
recognized securities rating agency lowered from the rating in place at the
time of the execution of the Terms Agreement, (iv) there shall not have come to
the attention of the Representatives any facts that would cause the
Representatives to believe that the Prospectus, together with the Prospectus
Supplement, at the time it was required to be delivered to a purchaser of the
Securities, to have 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 existing at such time, not misleading, and (v)
there shall not have been any event resulting in a Material Adverse Effect.
(b) At the Closing Date, the Underwriters shall have received:
(i) The favorable opinion of Kutak Rock LLP, counsel for
the Company, dated the Closing Date, in form and substance
satisfactory to counsel for the Underwriters, to the effect that:
(A) the Company has been duly organized and is
validly existing as a corporation in good standing under the
laws of the State of Delaware, and has full corporate power
and authority to conduct the business in which it is
engaged, to own, lease and operate the properties used by it
in such business, to issue and sell the Securities and to
enter into and perform this Agreement and the other
Operative Documents;
(B) the authorized capital stock of the Company is
as set forth in the Prospectus (except for subsequent
issuances, if any, pursuant to this Agreement, pursuant to
reservations, agreements or employee benefit plans referred
to in the Prospectus or pursuant to the exercise of
convertible securities or options referred to in the
Prospectus); the shares of issued and outstanding capital
stock of the Company have been duly authorized and validly
issued and are fully paid and non-assessable; and none of
the outstanding shares of capital stock of the Company was
issued in violation of the preemptive or other similar
rights of any security holder of the Company;
(C) this Agreement has been duly authorized by,
and duly executed and delivered on behalf of, the Company;
(D) the Remarketing Agreement has been duly
authorized, executed and delivered by the Company and
(assuming due authorization, execution and delivery thereof
by the other parties thereto) constitutes a valid and
binding agreement of the Company, enforceable against the
13
{PAGE}
Company in accordance with its terms, except as enforcement
thereof may be limited by bankruptcy, insolvency or other
laws relating to or affecting enforcement of creditors'
rights and by general equity principles and except as rights
to indemnification, contribution or exculpation thereunder
may not be enforceable;
(E) each of the Purchase Contract Agreement and
the Pledge Agreement has been duly authorized, executed and
delivered by the Company and (assuming due authorization,
execution and delivery thereof by the other parties thereto)
constitutes a valid and binding agreement of the Company,
enforceable against the Company in accordance with its
terms, except as enforcement thereof may be limited by
bankruptcy, insolvency or other laws relating to or
affecting enforcement of creditors' rights and by general
equity principles and except as any rights to
indemnification, contribution or exculpation thereunder may
not be enforced; provided, however, that upon the occurrence
of a Termination Event (as defined in the Purchase
Contract), Section 365(e) of the Bankruptcy Code (11 U.S.C.
[sec][sec] 101-1330, as amended) would not substantively limit
the provisions of Sections 3.15 and 5.9 of the Purchase
Contract Agreement or Section 4.3 of the Pledge Agreement that
require termination of the Purchase Contracts and release of
the Collateral Agent's security interest in (1) the Notes,
(2) the Treasury securities or (3) the applicable ownership
interest of the Treasury Portfolio, as applicable, and the
transfer of such securities to the Purchase Contract Agent
(for the benefit of the holders of Securities); and,
provided, further, however, that (i) the foregoing opinion
is subject to the equitable powers of the Bankruptcy Court
and the Bankruptcy Court's power under Section 105(a) of the
Bankruptcy Code and (ii) procedural restrictions respecting
relief from the automatic stay under Section 362 of the
Bankruptcy Code may delay the timing of the exercise of such
rights and remedies;
(F) the Indenture has been duly authorized,
executed and delivered by the Company, and (assuming due
authorization, execution and delivery thereof by the other
parties thereto) constitutes the valid and binding agreement
of the Company, enforceable in accordance with its terms,
except as enforcement thereof may be limited by bankruptcy,
insolvency or other laws relating to or affecting
enforcement of creditors' rights and by general equity
principles;
(G) the Notes have been duly authorized by the
Company and, when issued and authenticated in the manner
provided for in the Indenture and delivered against payment
for the Corporate Units of which they are a part in
accordance with the terms of the Purchase Contract Agreement
and the Indenture, will be entitled to the benefits of the
Indenture and constitute valid and binding obligations of
the Company, enforceable against the Company in accordance
with their terms, except as enforcement thereof may be
limited by bankruptcy, insolvency or other
14
{PAGE}
laws relating to or affecting enforcement of creditors'
rights and by general equity principles;
(H) the Securities have been duly authorized by
the Company and, when issued and authenticated in accordance
with the provisions of the Purchase Contract Agreement and
delivered to and paid for by the Underwriters in accordance
with the terms of the Purchase Agreement and, assuming the
certificates evidencing the Securities have been duly
executed by the Purchase Contract Agent as attorney-in-fact
of the holders thereof, will constitute valid and binding
obligations of the Company, enforceable against the Company
in accordance with their terms, except as enforcement
thereof may be limited by bankruptcy, insolvency or other
laws relating to or affecting enforcement of creditors'
rights and by general equity principles; provided, however,
that upon the occurrence of a Termination Event (as defined
in the Purchase Contract), Section 365(e) of the Bankruptcy
Code (11 U.S.C. [sec][sec] 101-1330, as amended) would not
substantively limit the provisions of Sections 3.15 and 5.9
of the Purchase Contract Agreement or Section 4.3 of the
Pledge Agreement that require termination of the Purchase
Contracts and release of the Collateral Agent's security
interest in (1) the Notes, (2) the Treasury securities or
(3) the applicable ownership interest of the Treasury
Portfolio, as applicable, and the transfer of such
securities to the Purchase Contract Agent (for the benefit
of the holders of Securities); and, provided, further,
however, that (i) the foregoing opinion is subject to the
equitable powers of the Bankruptcy Court and the Bankruptcy
Court's power under Section 105(a) of the Bankruptcy Code
and (ii) procedural restrictions respecting relief from the
automatic stay under Section 362 of the Bankruptcy Code may
delay the timing of the exercise of such rights and remedies;
(I) the Shares to be issued and sold by the
Company under the Purchase Contract Agreement have been duly
authorized and reserved for issuance by the Company and,
when issued and delivered by the Company in accordance with
the provisions of the Purchase Contract Agreement and the
Purchase Contracts upon payment of the purchase price
specified therein, will be validly issued, fully paid and
nonassessable; and free and clear of any preemptive rights
or any similar rights;
(J) the Indenture and the Securities conform in
all material respects to the descriptions thereof in the
Prospectus and the applicable Prospectus Supplement and are
in substantially the form filed or incorporated by
reference, as the case may be, as an exhibit to the
Registration Statement;
(K) the Indenture is qualified under the 1939 Act;
(L) no approval, authorization, consent or order
of, or registration or filing with, any court, governmental
agency or other public
15
{PAGE}
board or body is legally required for the issuance and sale
of the Securities by the Company or the performance of this
Agreement and the other Operative Documents, and the
transactions contemplated thereby, by the Company, except
such as may be required under State or federal securities or
"blue sky" laws and such as have already been received;
(M) the Registration Statement is effective under
the Securities Act, and, to the best of their knowledge, no
stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for a stop
order are pending or threatened under Section 8(d) of the
Securities Act;
(N) at the time the Registration Statement became
effective and as of the date of the Terms Agreement, the
Company satisfied the requirements under the Securities Act
for use of a Registration Statement on Form S-3, the
Registration Statement (other than the financial statements
and data included therein, the Statement of Eligibility
(Form T-1) of the Trustee, and the documents and other
information incorporated therein by reference, as to which
no opinion need be rendered) complied as to form in all
material respects with the requirements of the Securities
Act, the 1939 Act and the Regulations regarding registration
statements on Form S-3 and related prospectuses, and while
not assuming responsibility for the accuracy, completeness
or fairness of the statements contained in the Registration
Statement or the Prospectus, nothing has come to their
attention that would lead them to believe that the
Registration Statement (other than the financial statements
and data included therein and the Statement of Eligibility
(Form T-1) of the Trustee, as to which no opinion need be
rendered), at the time it became effective (or if an
amendment to the Registration Statement or an annual report
on Form 10-K has been filed by the Company with the
Commission subsequent to the effectiveness of the
Registration Statement, at the time of the most recent
filing), and as of the date of the Terms Agreement,
contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or
that the Prospectus (other than the financial statements and
data included therein and the Statement of Eligibility (Form
T-1) of the Trustee, as to which no opinion need be
rendered), at the date of the Terms Agreement and at the
Closing Date, contains an untrue statement of a material
fact or omits 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;
(O) to the best of their knowledge, there are no
contracts, instruments or documents of a character required
to be described in the Registration Statement or to be filed
as exhibits thereto other than those described or filed;
16
{PAGE}
(P) to the best of their knowledge, there are no
legal or governmental proceedings pending or threatened of a
character which should be disclosed in the Registration
Statement;
(Q) the statements in the Prospectus under the
captions "Description of the Equity Units," "Description of
the Purchase Contracts," "Certain Provisions of the Purchase
Contract Agreement and the Pledge Agreement," "Certain
United States Federal Income Tax Consequences" and
"Description of the Notes," have been reviewed by them,
fairly summarize and fairly present the information required
to be set forth with respect to the Securities in all
material respects;
(R) neither the issuance and sale of the
Securities by the Company, including the issuance and sale
of the Shares pursuant to the Purchase Contracts, nor the
execution, delivery and performance of this Agreement and
the other Operative Documents and the consummation by the
Company of the transactions contemplated thereby, will
conflict with or result in a breach of, or constitute a
default under, any of the terms, conditions or provisions of
(i) the certificate of incorporation or bylaws of the
Company or any of its subsidiaries, or (ii) any agreement or
instrument known to such counsel to which the Company or any
of its subsidiaries is a party or by which the Company or
any of its subsidiaries or any of their properties is bound,
except in the case of clause (ii) immediately above, where
violation would not result in a Material Adverse Effect;
(S) 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.
(ii) The favorable opinion of Shearman & Sterling, counsel
for the Underwriters, dated the Closing Date, with respect to such
matters as requested by the Underwriters.
(iii) From counsel for J. P. Morgan Trust Company, National
Association, as Purchase Contract Agent, such opinion or opinions,
dated the Closi