EXECUTION COPY
INGERSOLL-RAND COMPANY
(a New Jersey Corporation)
INGERSOLL-RAND FINANCING I
(a Delaware Business Trust)
14,000,000 FELINE PRIDES
and
1,400,000 Capital Securities
UNDERWRITING AGREEMENT
Dated: March 17, 1998
<PAGE>
Ingersoll-Rand Company
(a New Jersey Corporation)
INGERSOLL-RAND FINANCING I
(a Delaware Business Trust)
14,000,000 FELINE PRIDES/sm/
(Stated Amount of $25 per FELINE PRIDES),
consisting of
12,600,000 Income PRIDES/sm/
each consisting of
a Purchase Contract of Ingersoll-Rand Company Requiring the
Purchase on May 16, 2001 (or earlier) of certain Shares
of Common Stock of Ingersoll-Rand Company
and
a 6.22% Capital Security of Ingersoll-Rand Financing I
and
1,400,000 Growth PRIDES/sm/
each consisting of
a Purchase Contract of Ingersoll-Rand Company Requiring the
Purchase on May 16, 2001 (or earlier) of certain Shares
of Common Stock of Ingersoll-Rand Company
and
a 1/40 Undivided Beneficial Interest in a Zero-Coupon U.S.
Treasury Security Having a Principal Amount Equal
to $1,000 and maturing on May 15, 2001;
and
1,400,000 6.22% Capital Securities of
Ingersoll-Rand Financing I (Liquidation Amount $25 per
Capital Security)
<PAGE>
UNDERWRITING AGREEMENT
March 17, 1998
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Merrill Lynch World Headquarters
World Financial Center
North Tower
New York, New York 10281-1209<F>
Ladies and Gentlemen:
Ingersoll-Rand Company, a New Jersey corporation (the "Company"),
and Ingersoll-Rand Financing I, a Delaware statutory business trust (the
"Trust" and, together with the Company, the "Offerors"), confirm their
agreement with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated (the "Underwriter"), with respect to the sale to the Underwriter
of 14,000,000 FELINE PRIDES and 1,400,000 6.22% Capital Securities (the
"Capital Securities" and, together with the FELINE PRIDES, the "Initial
Securities") of the Trust. The FELINE PRIDES will initially consist of (A)
12,600,000 units (referred to as "Income PRIDES") with a Stated Amount, per
Income PRIDES, of $25 (the "Stated Amount") and (B) at least 1,400,000 units
(referred to as "Growth PRIDES") with a face amount, per Growth PRIDES, equal
to the Stated Amount. Each Income PRIDES will initially consist of a unit
comprised of (a) a stock purchase contract (a "Purchase Contract") under
which (i) the holder will purchase from the Company on May 16, 2001 (the
"Purchase Contract Settlement Date"), for an amount of cash equal to the
Stated Amount, a number of newly issued shares of common stock, $2 par value
per share (the "Shares"), of the Company equal to the Settlement Rate
described herein, and (ii) the Company will pay the holder unsecured contract
adjustment payments ("Contract Adjustment Payments") at the rate of 6.22% of
the Stated Amount per annum and (b) beneficial ownership of a Capital
Security. Each Growth PRIDES will initially consist of a unit comprised of
(a) a Purchase Contract under which (i) the holder will purchase from the
Company on the Purchase Contract Settlement Date, for an amount in cash equal
to the Stated Amount, the number of Shares of Common Stock of the Company,
equal to the Settlement Rate, and (ii) the Company will pay the holder
Contract Adjustment Payments, at the rate of 6.22% of the Stated Amount per
annum, and (b) a 1/40 undivided beneficial interest in a zero-coupon U.S.
Treasury Security (CUSIP No. 912820 BAY) in an amount equal to $1,000 payable
on May 15, 2001 (the "Treasury Securities"). The Company and the Trust also
propose to grant to the Underwriter options to purchase up to 1,890,000
additional Income PRIDES 210,000 additional Growth PRIDES and 210,000
additional Capital Securities (the "Option Securities" and together with the
Initial Securities, the "Securities") as described in Section 2(b) hereof.
In accordance with the terms of the Purchase Contract Agreement (as defined
below), to be dated as of March 23, 1998, between the Company and The Bank of
New York, as Purchase Contract Agent (the "Purchase Contract Agent"), the
Capital Securities constituting a part of the Income PRIDES, and the Treasury
Securities constituting a part of the Growth PRIDES, will be pledged by the
Purchase Contract Agent, on behalf of the holders of the Securities, to the
Chase Manhattan Bank, as Collateral Agent, pursuant to the Pledge Agreement,
<PAGE>
to be dated as of March 23, 1998 (the "Pledge Agreement"), among the Company,
the Purchase Contract Agent and the Collateral Agent, to secure the holders'
obligation to purchase Common Stock under the Purchase Contracts. The rights
and obligations of a holder of Securities in respect of Capital Securities,
subject to the pledge thereof, and Purchase Contracts will be evidenced by
Security Certificates (the "Security Certificates") to be issued pursuant to
the Purchase Contract Agreement.
The Capital Securities and Common Securities (as defined below)
will be guaranteed by the Company with respect to distributions and payments
upon liquidation, redemption and otherwise (the "Guarantee") pursuant to the
Guarantee Agreement, to be dated as of March 23, 1998 (the "Guarantee
Agreement"), executed and delivered by the Company and The First National
Bank of Chicago, as trustee (the "Guarantee Trustee"), for the benefit of the
holders from time to time of the Capital Securities and the Common
Securities, and certain back-up undertakings of the Company. All of the net
proceeds from the sale of the Capital Securities will be combined with the
entire net proceeds from the sale by the Trust to the Company of its common
securities (the "Common Securities" and, together with the Capital
Securities, the "Trust Securities") will be used by the Trust to purchase the
% Debentures due May 16, 2003 (the "Debentures") of the Company. The Trust
Securities will be issued pursuant to the amended and restated declaration of
trust of the Trust, dated as of March 23, 1998 (the "Declaration"), among the
Company, as Sponsor, Ronald G. Heller, Nancy Casablanca and Patricia
Nachtigal (the "Regular Trustees"), and The First National Bank of Chicago,
as the institutional trustee (the "Institutional Trustee") and First Chicago
Delaware, Inc., as the Delaware trustee (the "Delaware Trustee" and, together
with the Institutional Trustee and the Regular Trustees, the "Trustees"), and
the holders from time to time of undivided beneficial interests in the assets
of the Trust. The Debentures will be issued pursuant to the Indenture, dated
as of March 17, 1998 (the "Base Indenture"), between the Company and The Bank
of New York, as Trustee (the "Debt Trustee"), as supplemented by the First
Supplemental Indenture, dated March 23, 1998 (the Base Indenture, as
supplemented and amended, being referred to as the "Indenture"). Capitalized
terms used herein without definition shall be used as defined in the
Prospectus.
Prior to the purchase and public offering of the Securities by the
Underwriter, the Offerors and the Underwriter shall enter into an agreement
substantially in the form of Exhibit A hereto (the "Pricing Agreement"). The
Pricing Agreement may take the form of an exchange of any standard form of
written communication between the Offerors and the Underwriter and shall
specify such applicable information as is indicated in Exhibit A hereto. The
offering of the Securities will be governed by this Agreement, as
supplemented by the Pricing Agreement. From and after the date of the
execution and delivery of the Pricing Agreement, this Agreement shall be
deemed to incorporate the Pricing Agreement.
Pursuant to a remarketing agreement (the "Remarketing Agreement")
to be dated as of March 23, 1998, among the Company, the Trust, the Purchase
Contract Agent and a nationally recognized investment banking firm chosen by
the Company, the Capital Securities may be remarketed, subject to certain
terms and conditions.
The Company and the Trust have filed with the Securities and
Exchange Commission (the "Commission") a registration statement on Form S-3
(No. 333-38367) and pre-effective amendment no. 1 thereto covering the
<PAGE>
registration of securities of the Company and the Trust, including the
Securities and the Purchase Contracts and Capital Securities included in, and
Shares underlying, the Securities, under the Securities Act of 1933, as
amended (the "1933 Act"), including the related preliminary prospectus or
prospectuses, and the offering thereof from time to time in accordance with
the rules and regulations of the Commission under the 1933 Act (the "1933 Act
Regulations") and the Company has filed such post-effective amendments
thereto as may be required prior to the execution of the Pricing Agreement.
Such registration statement, as so amended, has been declared effective by
the Commission. Such registration statement, as so amended, including the
exhibits and schedules thereto, if any, and the information, if any, deemed
to be a part thereof pursuant to Rule 430A(b) of the 1933 Act Regulations
(the "Rule 430A Information") or Rule 434(d) of the 1933 Act Regulations (the
"Rule 434 Information"), is referred to herein as the "Registration
Statement"; and the final prospectus relating to the offering of the
Securities, in the form first furnished to the Underwriter by the Company for
use in connection with the offering of the Securities, are collectively
referred to herein as the "Prospectus"; provided, however, that all
references to the "Registration Statement" and the "Prospectus" shall be
deemed to include all documents incorporated therein by reference pursuant to
the Securities Exchange Act of 1934, as amended (the "1934 Act"), prior to
the execution of the applicable Pricing Agreement; provided, further, that if
the Offerors file a registration statement with the Commission pursuant to
Section 462(b) of the 1933 Act Regulations (the "Rule 462(b) Registration
Statement"), then after such filing, all references to "Registration
Statement" shall be deemed to include the Rule 462(b) Registration Statement;
and provided, further, that if the Offerors elect to rely upon Rule 434 of
the 1933 Act Regulations, then all references to "Prospectus" shall be deemed
to include the final or preliminary prospectus and the applicable term sheet
or abbreviated term sheet (the "Term Sheet"), as the case may be, in the form
first furnished to the Underwriter by the Company in reliance upon Rule 434
of the 1933 Act Regulations, and all references in this Underwriting
Agreement to the date of the Prospectus shall mean the date of the Term
Sheet. A "preliminary prospectus" shall be deemed to refer to any prospectus
used before the registration statement became effective and any prospectus
that omitted, as applicable, the Rule 430A Information, the Rule 434
Information or other information to be included upon pricing in a form of
prospectus filed with the Commission pursuant to Rule 424(b) of the 1933 Act
Regulations, that was used after such effectiveness and prior to the
execution and delivery of the applicable Pricing Agreement. For purposes of
this Agreement, all references to the Registration Statement, any preliminary
prospectus, the Prospectus or any Term Sheet or any amendment or supplement
to any of the foregoing shall be deemed to include the electronically
transmitted copy thereof filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval system ("EDGAR").
All references in this Agreement to financial statements and
schedules and other information which is "contained," "included" or "stated"
in the Registration Statement, any preliminary prospectus or the Prospectus
(or other references of like import) shall be deemed to mean and include all
such financial statements and schedules and other information which is
incorporated by reference in the Registration Statement, any preliminary
prospectus or the Prospectus, as the case may be; and all references in this
Agreement to amendments or supplements to the Registration Statement, any
preliminary prospectus or the Prospectus shall be deemed to mean and include
the filing of any document under the 1934 Act which is incorporated by
<PAGE>
reference in the Registration Statement, such preliminary prospectus or the
Prospectus, as the case may be.
The Offerors understand that the Underwriter proposes to make a
public offering of the Securities as soon as the Underwriter deems advisable
after the Pricing Agreement has been executed and delivered and the
Declaration, the Indenture and the Guarantee Agreement have been qualified
under the Trust Indenture Act of 1939, as amended (the "1939 Act").
SECTION 1. Representations and Warranties.
(a) The Offerors represent and warrant to each Underwriter as of
the date hereof, as of the date of the Pricing Agreement and as of each Date
of Delivery (as defined) (such later date being hereinafter referred to as
the "Representation Date") that:
(i) No stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that
purpose has been initiated or, to the knowledge of the Offerors,
threatened by the Commission.
(ii) The Company and the Trust meet, and at the respective times
of the commencement and consummation of the offering of the Securities
will meet, the requirements for the use of Form S-3 under the 1933 Act.
Each of the Registration Statement and any Rule 462(b) Registration
Statement has become effective under the 1933 Act. At the respective
times the Registration Statement, any Rule 462(b) Registration Statement
and any post-effective amendments thereto became effective and at each
Representation Date, the Registration Statement, any Rule 462
Registration Statement and any amendments or supplements thereto
complied and will comply in all material respects with the requirements
of the 1933 Act and the 1933 Act Regulations and the 1939 Act and the
rules and regulations of the Commission under the 1939 Act (the "1939
Act Regulations") and did not and will not contain an untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading. At the date of the Prospectus and at the Closing Time (as
defined herein), the Prospectus and any amendments and supplements
thereto did not and will not include an 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. If the Offerors elect to rely upon Rule 434
of the 1933 Act Regulations, the Offerors will comply with the
requirements of Rule 434. Notwithstanding the foregoing, the
representations and warranties in this subsection shall not apply to (A)
statements in or omissions from the Registration Statement or the
Prospectus made in reliance upon and in conformity with information
furnished to the Offerors in writing by the Underwriter expressly for
use in the Registration Statement or the Prospectus or (B) the part of
the Registration Statement which shall constitute the Statement of
Eligibility (Form T-1) under the 1939 Act.
Each preliminary prospectus and prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied as
so filed in all material respects with the 1933 Act Regulations and, if
applicable, each preliminary prospectus and the Prospectus delivered to
<PAGE>
the Underwriter for use in connection with the offering of the
Securities will, at the time of such delivery, be identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(iii) The documents incorporated or deemed to be incorporated by
reference in the Registration Statement or the Prospectus, at the time
they were or hereafter are filed or last amended, as the case may be,
with the Commission, complied and will comply 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 at the time
of filing or as of the time of any subsequent amendment, did not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were or are
made, not misleading; and any additional documents deemed to be
incorporated by reference in the Registration Statement or the
Prospectus will, if and when such documents are filed with the
Commission, or when amended, as appropriate, comply in all material
respects to the requirements of the 1934 Act and the 1934 Act
Regulations and will not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Offerors by the Underwriter
expressly for use in the Registration Statement or the Prospectus.
(iv) The accountants who certified the financial statements and
supporting schedules included or incorporated by reference in the
Registration Statement and the Prospectus are independent public
accountants as required by the 1933 Act and the 1933 Act Regulations.
(v) The financial statements of the Company included or
incorporated by reference in the Registration Statement and the
Prospectus, together with the related schedules and notes, present
fairly the financial position of the Company and its consolidated
subsidiaries as at the dates indicated and the results of their
operations for the periods specified in all material respects. Such
financial statements have been prepared in conformity with generally
accepted accounting principles ("GAAP") applied on a consistent basis
throughout the periods involved. The supporting schedules, if any,
included or incorporated by reference in the Registration Statement and
the Prospectus present fairly in accordance with GAAP the information
required to be stated therein in all material respects. The ratio of
earnings to fixed charges included in the Prospectus has been calculated
in compliance with Item 503(d) of Regulation SK of the Commission. The
selected financial information and the summary financial data included
in the Prospectus present fairly in all material respects the
information shown therein and have been compiled on a basis consistent
with that of the audited financial statements included in the
Registration Statement and the Prospectus. The pro forma financial
statements and the related notes thereto included in the Registration
Statement and the Prospectus present fairly in all material respects the
information shown therein, have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial
statements and have been properly compiled on the bases described
<PAGE>
therein, and the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give
effect to the transactions and circumstances referred to therein.
(vi) Since the respective dates as of which information is given
in the Registration Statement and the Prospectus, and except as
otherwise stated therein, (A) there has been no material adverse change
and no development which could reasonably be expected to result in a
material adverse change in the condition, financial or otherwise, or in
the earnings, business affairs of the Company and its subsidiaries,
considered as one enterprise whether or not arising in the ordinary
course of business (a "Material Adverse Effect"), (B) there have been no
transactions entered into by the Company or any of its subsidiaries,
other than those arising in the ordinary course of business, which are
material with respect to the Company and its subsidiaries, considered as
one enterprise, (C) except for regular dividends on the Common Stock in
amounts per share that are consistent with past practice or the
applicable charter document or supplement thereto, respectively, there
has been no dividend or distribution of any kind declared, paid or made
by the Company on any class of its capital stock.
(vii) The Company has been incorporated, is validly existing as a
corporation and is in good standing under the laws of the State of New
Jersey, has the corporate power and authority to own, lease and operate
its properties and to conduct its business as presently conducted and as
described in the Prospectus and to enter into and perform its
obligations under, or as contemplated under, this Agreement, the Pricing
Agreement, the Remarketing Agreement, the Purchase Contract Agreement,
the Pledge Agreement and the Guarantee Agreement. The Company is
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct
of business, except where the failure to so qualify or be in good
standing would not have a Material Adverse Effect.
(viii) Other than the Trust, each "Significant Subsidiary" (as
defined in Rule 1-02 of Regulation S-X of the 1933 Act) of the Company
is set forth on Schedule I hereto, has been incorporated and 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, lease and operate its properties and to conduct its business as
presently conducted and as described in the Prospectus, and is qualified
as a foreign corporation to transact business and is in good standing in
each jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify or be in good standing
would not have a Material Adverse Effect. Except as otherwise stated in
the Registration Statement and the Prospectus, all of the issued and
outstanding shares of capital stock of each subsidiary of the Company
have been authorized and validly issued, are fully paid and
nonassessable and all such shares are owned by the Company, directly or
through its subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity. None of the
outstanding shares of capital stock of the subsidiaries was issued in
violation of preemptive or other similar rights arising by operation of
law, under the charter or by-laws of any subsidiary or under any
<PAGE>
agreement to which the Company or any subsidiary is a party, or
otherwise.
(ix) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus; since the date indicated in
the Prospectus there has been no change in the consolidated
capitalization of the Company and its subsidiaries (other than changes
in outstanding Common Stock resulting from employee benefit plan or
dividend reinvestment and stock purchase plan transactions); and all of
the issued and outstanding capital stock of the Company has been
authorized and validly issued, is fully paid and non-assessable and
conforms to the descriptions thereof contained in the Prospectus.
(x) The Trust has been created and is validly existing in good
standing as a business trust under the Delaware Business Trust Act (the
"Delaware Act") with the power and authority to own property and to
conduct its business as described in the Registration Statement and
Prospectus and to enter into and perform its obligations under this
Agreement, the Pricing Agreement, the Remarketing Agreement, the Capital
Securities and the Declaration; the Trust is qualified to transact
business as a foreign company and is in good standing in each
jurisdiction in which such qualification is necessary, except where the
failure to so qualify or be in good standing would not have a Material
Adverse Effect on the Trust; the Trust is not a party to or otherwise
bound by any agreement other than those described in the Prospectus; the
Trust is and will, under current law, be classified for United States
federal income tax purposes as a grantor trust and not as an association
taxable as a corporation.
(xi) The Purchase Contract Agreement has been authorized by the
Company and, at the Closing Time, when validly executed and delivered by
the Company and assuming due authorization, execution and delivery of
the Purchase Contract Agreement by the Purchase Contract Agent, will
constitute a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms except to
the extent that enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to
or affecting creditors' rights generally, or by general equitable
principles (whether considered in a proceeding in equity or at law) (the
"Bankruptcy Exceptions"), and will conform in all material respects to
the description thereof contained in the Prospectus.
(xii) The Pledge Agreement has been authorized by the Company and,
at the Closing Time, when validly executed and delivered by the Company
and assuming due authorization, execution and delivery of the Pledge
Agreement by the Collateral Agent and the Purchase Contract Agent, will
constitute a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms except to
the extent that enforcement thereof may be limited by the Bankruptcy
Exceptions, and will conform in all material respects to the description
thereof contained in the Prospectus.
(xiii) The Common Securities have been authorized by the
Declaration and, when issued and delivered by the Trust to the Company
against payment therefor as described in the Registration Statement and
Prospectus, will be validly issued, will represent undivided beneficial
interests in the assets of the Trust and will conform in all material
<PAGE>
respects to the description thereof contained in the Prospectus; the
issuance of the Common Securities is not subject to preemptive or other
similar rights; and at the Closing Time all of the issued and
outstanding Common Securities of the Trust will be directly owned by the
Company free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equitable right.
(xiv) The Declaration has been authorized by the Company and, at
the Closing Time, will have been executed and delivered by the Company
and the Trustees, and assuming due authorization, execution and delivery
of the Declaration by the Institutional Trustee and the Delaware
Trustee, the Declaration will, at the Closing Time, be a legal, valid
and binding obligation of the Company and the Regular Trustees,
enforceable against the Company and the Regular Trustees in accordance
with its terms, except to the extent that enforcement thereof may be
limited by the Bankruptcy Exceptions, and will conform in all material
respects to the description thereof contained in the Prospectus; and at
the Closing Time, the Declaration will have been duly qualified under
the 1939 Act.
(xv) The Guarantee Agreement has been authorized by the Company
and, when validly executed and delivered by the Company, and, assuming
due authorization, execution and delivery by the Guarantee Trustee, will
constitute a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms except to
the extent that enforcement thereof may be limited by the Bankruptcy
Exceptions, and the Guarantee and the Guarantee Agreement will conform
in all material respects to the description thereof contained in the
Prospectus; and at the Closing Time, the Guarantee Agreement will have
been duly qualified under the 1939 Act.
(xvi) The Securities have been authorized for issuance and sale to
the Underwriter and, when issued and delivered against payment therefor
as provided herein, will be validly issued and fully paid and non-
assessable and will conform in all material respects to the description
thereof contained in the Prospectus; the issuance of the Securities is
not subject to preemptive or other similar rights.
(xvii) The Shares, when issued and delivered in accordance with the
provisions of the Purchase Contract Agreement and the Pledge Agreement,
will be authorized, validly issued and fully paid and non-assessable and
will conform in all material respects to the description thereof
contained in the Prospectus; and the issuance of such Shares will not be
subject to preemptive or other similar rights.
(xviii) The Indenture has been authorized by the Company and
qualified under the 1939 Act and, at the Closing Time, will have been
executed and delivered and will constitute a legal, valid and binding
agreement of the Company, enforceable against the Company in accordance
with its terms except to the extent that enforcement thereof may be
limited by the Bankruptcy Exceptions; the Indenture will conform in all
material respects to the description thereof contained in the
Prospectus.
(xix) The Debentures have been authorized by the Company and, at
the Closing Time, will have been executed by the Company and, when
authenticated in the manner provided for in the Indenture and delivered
<PAGE>
against payment therefor as described in the Prospectus, will constitute
legal, valid and binding obligations of the Company, enforceable against
the Company in accordance with their terms except to the extent that
enforcement thereof may be limited by the Bankruptcy Exceptions, and
will be in the form contemplated by, and entitled to the benefits of,
the Indenture and will conform in all material respects to the
description thereof contained in the Prospectus.
(xx) Each of the Regular Trustees of the Trust is an employee of
the Company and has been authorized by the Company to execute and
deliver the Declaration.
(xxi) Neither the Company nor any of its subsidiaries is in
violation of its articles of incorporation or by-laws. The Trust is not
in violation of the Declaration or its certificate of trust filed with
the State of Delaware on August 18, 1997 (the "Certificate of Trust");
none of the Company, any of its subsidiaries or the Trust is in default
in the performance or observance of any obligation, agreement, covenant
or condition contained in any contract, indenture, mortgage, note,
lease, loan or credit agreement or any other agreement or instrument to
which the Company, any of its subsidiaries or the Trust is a party or by
which any of them may be bound, or to which any of the property or
assets of the Company, any subsidiary or the Trust is subject, or in
violation of any applicable law, rule or regulation or any judgment,
order or decree of any government, governmental instrumentality or
court, domestic or foreign, having jurisdiction over the Company or any
of its subsidiaries or any of their respective properties or assets,
which violation or default would, singly or in the aggregate, have a
Material Adverse Effect.
(xxii) The entry into the Purchase Contracts underlying the
Securities by the Company, the offer of the Securities as contemplated
herein and in the Prospectus, the issue of the Shares and the sale of
the Shares by the Company pursuant to the Purchase Contracts, the
execution, delivery and performance of this Agreement, the Pricing
Agreement, the Remarketing Agreement, the Purchase Contracts, the
Purchase Contract Agreement, the Pledge Agreement, the Declaration, the
Capital Securities, the Common Securities, the Indenture, the
Debentures, the Guarantee Agreement and the Guarantees, and the
consummation of the transactions contemplated herein, therein and the
Registration Statement (including the issuance and sale of the
Securities and the use of proceeds from the sale of the Securities as
described in the prospectus under the caption "Use of Proceeds") and
compliance by the Offerors with their obligations hereunder and
thereunder have been authorized by all necessary action (corporate or
otherwise) and do not and will not, whether with or without the giving
of notice or passage of time or both, conflict with or constitute a
breach of any of the terms or provisions of, or constitute a default or
Repayment Event (as defined below) under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company, any subsidiary or the Trust pursuant to any
contract, indenture, mortgage, deed of trust, loan or credit agreement,
note, lease or any other agreement or instrument to which the Company,
the Trust or any subsidiary is a party or by which any of them may be
bound, or to which any of the Property of any of them is subject (the
"Agreements and Instruments") (except for such conflicts, breaches or
defaults or liens, charges or encumbrances that would not result in a
<PAGE>
Material Adverse Effect), nor will such action result in any violation
of the provisions of the charter or bylaws of the Company or any
subsidiary or the Declaration or Certificate of Trust or any applicable
law, statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Company, any subsidiary or the Trust or any
of their assets, properties or operations. As used herein, a "Repayment
Event" means any event or condition which gives the holder of any note,
debenture or other evidence of indebtedness (or any person acting on
such holder's behalf) the right to require the repurchase, redemption or
repayment of all or a portion of such indebtedness by the Company, any
subsidiary or the Trust.
(xxiii) There is no action, suit, proceeding, inquiry or
investigation before or by any court or governmental agency or body,
domestic or foreign, now pending or to the knowledge of the Company
threatened against or affecting the Trust, the Company or any of its
subsidiaries which is required to be disclosed in the Registration
Statement and the Prospectus (other than as stated therein), or which
might reasonably be expected to result in a Material Adverse Effect, or
which might be reasonably expected to have a Material Adverse Effect on
the assets, properties or operations thereof or the consummation of this
Agreement, the Pricing Agreement, the Remarketing Agreement, the
Purchase Contracts, the Purchase Contract Agreement, the Pledge
Agreement, the Guarantee Agreement, the Indenture or the transactions
contemplated herein or therein.
(xxiv) The Company and its subsidiaries have good and marketable
title to all material real and personal property owned by them, in each
case free and clear of all liens, encumbrances and defects except such
as are described in the Registration Statement or the Prospectus or such
as do not materially affect the value of such property and do not
materially interfere with the use made and proposed to be made of such
property by the Company and its subsidiaries; and any material real
property and buildings held under lease by the Company and its
subsidiaries are held by them under valid, subsisting and enforceable
leases with such exceptions as are not material and do not materially
interfere with the use made and proposed to be made of such property and
buildings by the Company and its subsidiaries; the Company and its
subsidiaries possess all licenses, franchises, permits, certificates,
authorizations, approvals, consents and orders of all governmental
authorities or agencies which are necessary for the ownership or lease
of the material properties owned or leased by each of them and for the
operation of the business now operated by each of them with such
exceptions which, singly or in the aggregate, are not material and do
not materially interfere with the conduct of the business of the Company
and its subsidiaries, considered as one enterprise; all such licenses,
franchises, permits, certificates, orders, authorizations, approvals and
consents are in full force and effect and contain no unduly burdensome
provisions that would interfere with the conduct of the business of the
Company and its subsidiaries, considered as one enterprise and, except
as otherwise set forth in the Registration Statement or the Prospectus,
there are no legal or governmental proceedings pending or threatened
that would result in a material modification, suspension or revocation
thereof.
<PAGE>
(xxv) No authorization, approval, consent, order, registration or
qualification of or with any court or governmental authority or agency
is required for the entry into the Purchase Contracts underlying the
Securities, in connection with the issuance and sale of the Common
Securities, the offering of the Securities and the issuance and sale of
the Shares by the Company pursuant to such Purchase Contracts, except
such as have been obtained and made under the federal securities laws
and such as may be required under state or foreign securities or Blue
Sky laws.
(xxvi) This Agreement, the Remarketing Agreement and the Pricing
Agreement have been authorized, executed and delivered by each of the
Offerors.
(xxvii) None of the Trust nor the Company or any of its subsidiaries
is, and upon the issuance and sale of the Securities as herein
contemplated and the application of the net proceeds therefrom as
described in the Prospectus will not be, 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 (the "1940 Act").
(xxviii) None of the Company, its subsidiaries or any of their
respective directors, officers or controlling persons, has taken,
directly or indirectly, any action resulting in a violation of
Regulation M under the 1934 Act, or designed to cause or result in, or
that has constituted or that reasonably might be expected to constitute,
the stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities or the Common
Stock.
(xxix) No "forward looking statement" (as defined in Rule 175 under
the 1933 Act) contained in the Registration Statement, any preliminary
prospectus or the Prospectus was made or reaffirmed without a reasonable
basis or was disclosed other than in good faith.
(b) Any certificate signed by any officer of the Company or a
Trustee of the Trust and delivered to the Underwriter or to counsel for the
Underwriter shall be deemed a representation and warranty by the Company or
the Trust, as the case may be, to the Underwriter as to the matters covered
thereby.
SECTION 2. Sale and Delivery to Underwriter; Closing.
(a) On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the
Offerors agree to sell to the Underwriter, and the Underwriter agrees to
purchase from the Offerors, at the price per security set forth in the
Pricing Agreement, 14,000,000 Initial Securities.
(1) If the Offerors have elected not to rely upon Rule 430A
of the 1933 Act Regulations, the initial public offering price per Security
and the purchase price per Security to be paid by the Underwriter for the
Securities have each been determined and set forth in the Pricing Agreement,
dated the date hereof, and any necessary amendments to the Registration
Statement and the Prospectus will be filed before the Registration Statement
becomes effective.
<PAGE>
(2) If the Offerors have elected to rely upon Rule 430A of
the 1933 Act Regulations, the purchase price per Security to be paid by the
Underwriter shall be an amount equal to the initial public offering price per
Security, less an amount per Security to be determined by agreement between
the Underwriter and the Offerors. The initial public offering price per
Security shall be a fixed price to be determined by agreement between the
Underwriter and the Offerors. The initial public offering price and the
purchase price, when so determined, shall be set forth in the Pricing
Agreement. In the event that such prices have not been agreed upon and the
Pricing Agreement has not been executed and delivered by all parties thereto
by the close of business on the fourth business day following the date of
this Agreement, this Agreement shall terminate forthwith, without liability
of any party to any other party, unless otherwise agreed to by the Offerors
and the Underwriter.
(b) In addition, on the basis of the representations and
warranties herein contained and subject to the terms and conditions herein
set forth, the Offerors hereby grant to the Underwriter the right to purchase
at its election up to 1,890,000 Income PRIDES, 210,000 Growth PRIDES and
210,000 Capital Securities at the price per share set forth in the Pricing
Agreement; provided, that, pursuant to such options, the Underwriter shall
purchase, proportionately, at least as many Capital Securities as Growth
PRIDES and shall purchase proportionately, at least as many Growth PRIDES as
Income PRIDES. The option hereby granted will expire automatically at the
close of business on the 30th calendar day after (i) the later of the date
the Registration Statement and any Rule 462(b) Registration Statement becomes
effective, if the Offerors have elected not to rely upon Rule 430A under the
1933 Act Regulations, or (ii) the Representation Date, if the Offerors have
elected to rely upon Rule 430A under the 1933 Act Regulations, and may be
exercised in whole or in part from time to time only for the purpose of
covering over-allotments which may be made in connection with the offering
and distribution of the Initial Securities upon notice by the Underwriter to
the Offerors setting forth the aggregate number of additional Optional
Securities to be purchased and the time and date of delivery for the related
Option Securities. Any such time and date of delivery (a "Date of Delivery")
shall be determined by the Underwriter but shall not be later than seven full
business days after the exercise of such option, nor in any event before the
Closing Time, unless otherwise agreed upon by the Underwriter and the
Offerors.
(c) The Capital Securities and Treasury Securities underlying the
Securities will be pledged with the Collateral Agent to secure the holders'
obligations to purchase Common Stock under the Purchase Contracts. Such
pledge shall be effected by the transfer to the Collateral Agent of the
Capital Securities and Treasury Securities to be pledged at the Closing Time
and appropriate Date of Delivery, if any, in accordance with the Pledge
Agreement.
(d) Delivery of certificates for the Initial Securities and the
Option Securities (if the option provided for in Section 2(b) hereof shall
have been exercised on or before the first business day prior to the Closing
Time) shall be made at the offices of the Underwriter in New York, against
the delivery to the Collateral Agent of the Capital Securities and Treasury
Securities relating to such Securities by such Underwriter or on its behalf,
and payment of the purchase price for such Securities shall be made at the
offices of Skadden, Arps, Slate, Meagher & Flom LLP, 919 Third Avenue, New
York, New York 10022 or at such other place as shall be agreed upon by the
<PAGE>
Underwriter and the Offerors, at 9:00 a.m. (New York time) on the third
business day after the date the Registration Statement becomes effective (or,
if the Offerors have elected to rely upon Rule 430A, the third full business
day after execution of the Pricing Agreement (or, if pricing of the
Securities occurs after 4:30 p.m., Eastern time, on the fourth full business
day thereafter)), or such other time not later than ten business days after
such date as shall be agreed upon by the Underwriter and the Offerors (such
time and date of payment and delivery being referred to herein as the
"Closing Time"). Payment for the Securities purchased by the Underwriter
shall be made by wire transfer of immediately available funds, payable to the
Company, against delivery to the account of the Underwriter of the Securities
to be purchased by it. Delivery of, and payment for, the Securities shall be
made through the facilities of The Depository Trust Company. In addition, if
the Underwriter purchase any or all of the Option Securities, payment of the
purchase price and delivery of certificates for such Option Securities shall
be made at the offices of Skadden, Arps, Slate, Meagher & Flom LLP set forth
above, or at such other place as shall be agreed upon by the Underwriter and
the Offerors, on each Date of Delivery as specified in the relevant notice
from the Underwriter to the Offerors.
Certificates for the Initial Securities and the Option Securities,
if any, shall be in such denominations and registered in such names as the
Underwriter may request in writing at least two full business days before the
Closing Time or any Date of Delivery, as the case may be. The certificates
for the Initial Securities and the Option Securities, if any, will be made
available for examination by the Underwriter no later than 10:00 a.m. (New
York City time) on the last business day prior to the Closing Time or the
Date of Delivery, as the case may be.
(e) If settlement for the Option Securities occurs after the
Closing Time, the Offerors will deliver to the Underwriter on the relevant
Date of Delivery, and the obligations of the Underwriter to purchase the
Option Securities shall be conditioned upon the receipt of, supplemental
opinions, certificates and letters confirming as of such date the opinions,
certificates and letters delivered at the Closing Time pursuant to Section
5(k) hereof.
SECTION 3. Covenants of the Offerors. The Offerors agree with the
Underwriter as follows:
(a) Promptly following the execution of this Agreement, the
Offerors will cause the Prospectus to be filed with the Commission
pursuant to Rule 424 of the 1933 Act Regulations and the Offerors will
promptly advise the Underwriter when such filing has been made. Prior
to the filing, the Offerors will cooperate with the Underwriter in the
preparation of such Prospectus to assure that the Underwriter has no
reasonable objection to the form or content thereof when filed or
mailed.
(b) The Offerors will comply with the requirements of Rule 430A of
the 1933 Act Regulations and/or Rule 434 of the 1933 Act Regulations if
and as applicable, and will notify the Underwriter immediately, and
confirm the notice in writing, (i) of the effectiveness of any post-
effective amendment to the Registration Statement or the filing of any
supplement or amendment to the Prospectus, (ii) the receipt of any
comments from the Commission, (iii) of any request by the Commission for
any amendment to the Registration Statement or any amendment or
<PAGE>
supplement to the Prospectus or for additional information, (iv) of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any
proceedings for that purpose and (v) of the issuance by any state
securities commission or other regulatory authority of any order
suspending the qualification or the exemption from qualification of the
Securities or the Shares under state securities or Blue Sky laws or the
initiation or threatening of any proceeding for such purpose. The
Offerors will make every reasonable effort to prevent the issuance of
any stop order and, if any stop order is issued, to obtain the lifting
thereof at the earliest possible moment.
(c) The Offerors will give the Underwriter notice of their
intention to file or prepare any amendment to the Registration Statement
(including any post-effective amendment and any filing under Rule 462(b)
of the 1933 Act Regulations), any Term Sheet or any amendment,
supplement or revision to either the prospectus included in the
Registration Statement at the time it became effective or to the
Prospectus, whether pursuant to the 1933 Act, the 1934 Act or otherwise;
will furnish the Underwriter with copies of any such Rule 462(b)
Registration Statement, Term Sheet, amendment, supplement or revision a
reasonable amount of time prior to such proposed filing or use, as the
case may be; and will not file any such Rule 462(b) Registration
Statement, Term Sheet, amendment, supplement or revision to which the
Underwriter or counsel for the Underwriter shall object.
(d) The Company will deliver to the Underwriter and counsel for
the Underwriter, without charge, signed copies of the Registration
Statement as originally filed and of each amendment thereto (including
exhibits filed therewith or incorporated by reference therein and
documents incorporated or deemed to be incorporated by reference
therein) and signed copies of all consents and certificates of experts,
and will also deliver to the Underwriter, without charge, a conformed
copy of the Registration Statement as originally filed and of each
amendment thereto (without exhibits). If applicable, the copies of the
Registration Statement and each amendment thereto furnished to the
Underwriter 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.
(e) The Company has delivered to the Underwriter, without charge,
as many copies of each preliminary prospectus as the Underwriter
reasonably requested, and the Company hereby consents to the use of such
copies for purposes permitted by the 1933 Act. The Company will furnish
to the Underwriter, without charge, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934
Act, such number of copies of the Prospectus (as amended or
supplemented) as the Underwriter may reasonably request. If applicable,
the Prospectus and any amendments or supplements thereto furnished to
the Underwriter 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 Offerors will comply with the 1933 Act and the 1933 Act
Regulations and the 1934 Act and the 1934 Act Regulations so as to
permit the completion of the distribution of the Securities as
contemplated in this Agreement and in the Registration Statement and the
<PAGE>
Prospectus. If at any time when the Prospectus is required by the 1933
Act or the 1934 Act to be delivered in connection with sales of the
Securities, any event shall occur or condition shall exist as a result
of which it is necessary, in the opinion of counsel for the Underwriter
or for the Offerors, to amend the Registration Statement in order that
the Registration Statement will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or to
amend or supplement the Prospectus in order that the Prospectus will not
include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the opinion of
such counsel, at any such time to amend the Registration Statement or
amend or supplement the Prospectus in order to comply with the
requirements of the 1933 Act or the 1933 Act Regulations, the Offerors
will promptly prepare and file with the Commission, subject to Section
3(c), such amendment or supplement as may be necessary to correct such
statement or omission or to make the Registration Statement or the
Prospectus comply with such requirements, and the Offerors will furnish
to the Underwriter, without charge, such number of copies of such
amendment or supplement as the Underwriter may reasonably request.
(g) The Offerors will use their best efforts, in cooperation with
the Underwriter, to qualify the Securities for offering and sale under
the applicable securities laws of such states and other jurisdictions
(domestic or foreign) as the Underwriter may designate; provided,
however, that the Company shall not be obligated to qualify as a foreign
corporation in any jurisdiction in which it is not so qualified or
subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject. In each
jurisdiction in which the Securities have been so qualified, the
Offerors will file such statements and reports as may be required by the
laws of such jurisdiction to continue such qualification in effect for
so long as may be required in connection with distribution of the
Securities and the Shares.
(h) The Company will make generally available to its
securityholders as soon as practicable, but not later than 45 days (or
90 days, in the case of a period that is also the Company's fiscal year)
after the close of the period covered thereby, an earnings statement of
the Company and its subsidiaries (in form complying with the provisions
of Rule 158 of the 1933 Act Regulations).
(i) The Company will use the net proceeds received by it from the
sale of the Securities in the manner specified in the Prospectus under
"Use of Proceeds".
(j) If, at the time that the Registration Statement became (or in
the case of a post-effective amendment becomes) effective, any
information shall have been omitted therefrom in reliance upon Rule 430A
or Rule 434 of the 1933 Act Regulations, then immediately following the
execution of the Pricing Agreement, the Offerors will prepare, and file
or transmit for filing with the Commission in accordance with such Rule
430A or Rule 434 and Rule 424(b) of the 1933 Act Regulations, copies of
an amended Prospectus, or Term Sheet, or, if required by such Rule 430A,
<PAGE>
a posteffective amendment to the Registration Statement (including an
amended Prospectus), containing all information so omitted.
(k) If the Offerors elect to rely upon Rule 462(b), the Offerors
shall file a Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) and pay the applicable fees in accordance
with Rule 111 of the 1933 Act Regulations by the earlier of (i) 10:00
p.m. Eastern time on the date of the Pricing Agreement and (ii) the time
confirmations are sent or given, as specified by Rule 462(b)(2).
(l) The Offerors, during the period when the Prospectus is
required to be delivered under the 1933 Act, will file all documents
required to be filed with the Commission pursuant to Section 13, 14 or
15 of the 1934 Act within the time periods required by the 1934 Act and
the 1934 Act Regulations.
(m) The Offerors will use their best efforts to effect the listing
of the Income PRIDES and the Growth PRIDES on the New York Stock
Exchange and to cause the Securities to be registered under the 1934
Act.
(n) During a period of 90 days from the date of the Pricing
Agreement, neither the Trust nor the Company will, without the prior
written consent of the Underwriter, directly or indirectly, sell, offer
to sell, grant any option for the sale of, or otherwise dispose of, or
enter into any agreement to sell, any Income PRIDES, Growth PRIDES,
Purchase Contracts, Capital Securities or Common Stock, as the case may
be, or any securities of the Company similar to the Income PRIDES,
Growth PRIDES, Purchase Contracts, Capital Securities or Common Stock or
any security convertible into or exchangeable or exercisable for Income
PRIDES, Growth PRIDES, Purchase Contracts, Capital Securities or Common
Stock other than shares of Common Stock or options for shares of Common
Stock issued pursuant to or sold in connection with any employee
benefit, dividend reinvestment and stock option and stock purchase plans
of the Company and its subsidiaries and other than the Growth PRIDES or
Income PRIDES to be created or recreated upon substitution of Pledged
Securities, or shares of Common Stock issuable upon early settlement of
the Income PRIDES or Growth PRIDES or upon exercise of stock options, or
(B) enter into any swap or any other agreement or any transaction that
transfers, in whole or in part, directly or indirectly, the economic
consequence of ownership of the Securities, any security convertible
into or exchangeable into or exercisable for the Securities
substantially similar to equity securities substantially similar to the
Securities, whether any such swap or transaction is to be settled by
delivery of Securities, or other securities, in cash or otherwise.
(o) For a period of three years from the Closing Time, the Company
will furnish to the Underwriter copies of all annual reports, quarterly
reports and current reports filed with the Commission on Forms 10-K, 10-
Q and 8-K, or such similar forms as may be designated by the Commission,
and such other documents, reports and information as shall be furnished
by the Company to its stockholders or securityholders generally,
provided, however, that the Company shall not be required to provide the
Underwriter with any such reports or similar forms that have been filed
with the Commission by electronic transmission pursuant to EDGAR.
<PAGE>
(p) The Company will reserve and keep available at all times, free
of preemptive or other similar rights and liens and adverse claims,
sufficient shares of Common Stock to satisfy any obligations to issue
Shares upon settlement of the Purchase Contracts and shall take all
actions necessary to keep effective the Registration Statement with
respect to the Shares.
(q) None of the Company, its subsidiaries or any of their
respective directors, officers or controlling persons, will take,
directly or indirectly, any action resulting in a violation of
Regulation M under the 1934 Act, or designed to cause or result in, or
that reasonably might be expected to constitute, the stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities or the Common Stock.
SECTION 4. Payment of Expenses. The Company will pay all expenses
incident to the performance of its obligations under this Agreement, the
Pricing Agreement, the Purchase Contracts, the Purchase Contract Agreement
and the Pledge Agreement, including, without limitation, expenses related to
the following, if incurred: (i) the preparation, delivery, printing and
filing of the Registration Statement and Prospectus as originally filed
(including financial statements and exhibits) and of each amendment thereto;
(ii) the preparation, issuance and delivery of the certificates for the
Securities and the Shares; (iii) the fees and disbursements of the Company's
counsel, accountants and other advisors or agents (including the transfer
agents and registrars), as well as fees and disbursements of the Trustees,
the Purchase Contract Agent, the Collateral Agent and any Depositary, and
their respective counsel (except as provided for in the Prospectus); (iv) the
qualification of the Securities and the Shares under securities laws in
accordance with the provisions of Section 3(g), including filing fees and the
fees and disbursements of counsel for the Underwriter in connection therewith
and in connection with the preparation of the Blue Sky Survey; (v) the
printing and delivery to the Underwriter of copies of the Registration
Statement as originally filed and of each amendment thereto, of each
preliminary prospectus, any Term Sheet and of the Prospectus and any
amendments or supplements thereto; (vi) any fees payable in connection with
the rating of the Securities by nationally recognized statistical rating
organizations; and (vii) any fees payable or expenses incurred pursuant to
any Uniform Commercial Code related filings; and (viii) the fees and expenses
incurred in connection with the listing of the Income PRIDES, the Growth
PRIDES and the Shares on the New York Stock Exchange.
If this Agreement is terminated by the Underwriter in accordance
with the provisions of Section 5 or Section 9(a)(i) hereof with respect to
the Initial Securities or the Option Securities, as the case may be, the
Company shall reimburse the Underwriter for all of its reasonable out-of-
pocket expenses incurred in connection with the Initial Securities or Option
Securities, as the case may be, including the fees and disbursements of
Skadden, Arps, Slate, Meagher & Flom LLP, counsel for the Underwriter.
SECTION 5. Conditions of Underwriter's Obligations. The
obligations of the Underwriter to purchase and pay for the Securities
pursuant to this Agreement are subject to the accuracy of the representations
and warranties of the Offerors herein contained or in certificates of any
officer of the Company or any subsidiary or the trustees of the Trust
delivered pursuant to the provisions hereof, to the performance by the
<PAGE>
Offerors of their obligations hereunder, and to the following further
conditions:
(a) The Registration Statement, including any Rule 462(b)
Registration Statement, shall have become effective under the 1933 Act not
later than 5:30 p.m., New York City time, on the date hereof, and on the date
hereof and at the Closing Time and any Date of Delivery, no stop order
suspending the effectiveness of the Registration Statement or any part
thereof shall have been issued under the 1933 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
satisfaction of counsel to the Underwriter. A prospectus containing
information relating to the description of the Securities, the specific
method of distribution and similar matters shall have been filed with the
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 1933 Act Regulations, a Term Sheet including the Rule 434
Information shall have been filed with the Commission in accordance with Rule
424(b)(7).
(b) At the Closing Time the Underwriter shall have received:
(1) The favorable opinion, dated as of the Closing Time, of
Patricia Nachtigal, Esq., Vice President and General Counsel of the
Company, in form and substance reasonably satisfactory to counsel for
the Underwriter, to the effect that:
(i) The Company has been incorporated, is validly existing
as a corporation and is in good standing under the laws of the
State of New Jersey.
(ii) The Company has corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the Prospectus.
(iii) The Company is qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in
which such qualification is required, except where such failure to
qualify or be in good standing would not have a Material Adverse
Effect.
(iv) 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 incentive compensation
plan, employee benefit plan or dividend reinvestment and stock
purchase plan transactions), and the shares of issued and
outstanding capital stock of the Company have been authorized and
validly issued and are fully paid and non-assessable.
(v) Except for the Trust, each Significant Subsidiary of
the Company has been incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction of
its incorporation; to such counsel's knowledge, each subsidiary of
the Company has the corporate power and authority to own, lease and
operate its properties and to conduct its business as presently
<PAGE>
conducted and as described in the Prospectus, and is qualified as a
foreign corporation to transact business and is in good standing in
each jurisdiction in which such qualification is required, whether
by reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify or be in good
standing would not have a Material Adverse Effect; and to such
Counsel's knowledge all of the issued and outstanding capital stock
of each subsidiary of the Company has been authorized and validly
issued, is fully paid and non-assessable and all shares owned by
the Company, directly or through its subsidiaries, are owned free
and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity.
(vi) The Declaration has been authorized, executed and
delivered by the Company and the Trustees and is a legal, valid and
binding obligation of the Company, enforceable against the Company
and each of the Regular Trustees in accordance with its terms,
except as enforcement thereof may be limited by the Bankruptcy
Exceptions; and the Declaration has been duly qualified under the
1939 Act.
(vii) All legally required proceedings in connection with the
authorization, issuance and validity of the Securities and the sale
of the Securities in accordance with this Agreement have been taken
and all legally required orders, consents or other authorizations
or approvals of any other public boards or bodies in connection
with the authorization, issuance and validity of the Securities and
the sale of the Securities in accordance with this Agreement (other
than in connection with or in compliance with the provisions of the
securities or Blue Sky laws of any jurisdictions, as to which no
opinion need be expressed) have been obtained and are in full force
and effect.
(viii) The Registration Statement is effective under the 1933
Act and, to the best knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has been
issued under the 1933 Act, and no proceedings therefor have been
initiated or threatened by the Commission.
(ix) Each of the documents incorporated by reference in the
Registration Statement or the Prospectus at the time they were
filed or last amended (other than the financial statements and the
notes thereto, the financial schedules, and any other financial
data included or incorporated by reference therein, as to which
such counsel need express no belief), complied as to form in all
material respects with the requirements of the 1934 Act and the
1934 Act Regulations, as applicable; and such counsel has no reason
to believe that any of such documents, when such documents became
effective or were so filed, as the case may be, contained, in the
case of a registration statement which became effective under the
1933 Act, 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, and, in the case of
other documents which were filed under the 1934 Act with the
Commission, an untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements
therein not misleading.
<PAGE>
(x) The Company and the Trust meet the registrant
requirements for use of Form S3 under the 1933 Act Regulations.
(xi) The Income PRIDES and Growth PRIDES have been duly
authorized, executed and delivered by the Company, and (assuming
due execution by the Purchase Contract Agent as attorney-in-fact of
the holders thereof and due authentication by the Purchase Contract
Agent) and upon payment therefor as set forth herein, will be duly
and validly issued and outstanding, and will constitute valid and
binding obligations of the Company entitled to the benefits of the
Purchase Contract Agreement and enforceable against the Company in
accordance with its terms, except to the extent that enforcement
thereof may be limited by the Bankruptcy Exceptions. The Shares
and the Securities are each registered under the 1934 Act, and the
Income PRIDES issuable at the Closing Time and the Shares issuable
by the Company pursuant to the Purchase Contracts have been
authorized for listing on the New York Stock Exchange, upon
official notice of issuance.
(xii) The Shares subject to the Purchase Contract Agreement
have been validly authorized and reserved for issuance and, when
issued and delivered by the Company in accordance with the
provisions of the Purchase Contract Agreement, the Purchase
Contracts and the Pledge Agreement, will be fully paid and non-
assessable; the issuance of such Shares will not be subject to
preemptive or other similar rights arising by law or, to the best
of such counsel's knowledge, otherwise.
(xiii) The issuance of the Securities is not subject to
preemptive or other similar rights arising by law or, to the best
of such counsel's knowledge, otherwise.
(xiv) All of the issued and outstanding Common Securities of
the Trust are directly owned by the Company free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or
equitable right.
(xv) This Agreement, the Remarketing Agreement and the
Pricing Agreement have been duly authorized, executed and delivered
by each of the Company and the Trust.
(xvi) The Purchase Contract Agreement has been duly
authorized, executed and delivered by the Company and, assuming due
authorization, execution and delivery by the Purchase Contract
Agent, constitutes a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms except
to the extent that enforcement thereof may be limited by the
Bankruptcy Exceptions.
(xvii) The Pledge Agreement has been duly authorized, executed
and delivered by the Company and, assuming due authorization,
execution and delivery by the Collateral Agent and the Purchase
Contract Agent, constitutes a legal, valid and binding agreement of
the Company, enforceable against the Company in accordance with its
terms except to the extent that enforcement thereof may be limited
by the Bankruptcy Exceptions.
<PAGE>
(xviii) The Guarantee Agreement has been duly authorized,
executed and delivered by the Company; the Guarantee Agreement,
assuming it is duly authorized, executed, and delivered by the
Guarantee Trustee, constitutes a valid and binding agreement of the
Company, enforceable against the Company in accordance with its
terms, except to the extent that enforcement thereof may be limited
by Bankruptcy Exceptions.
(xix) The Indenture has been executed and delivered by the
Company and, assuming authorization, execution, and delivery
thereof by the Debt Trustee, is a valid and binding agreement of
the Company, enforceable against the Company in accordance with its
terms, except to the extent that enforcement thereof may be limited
by the Bankruptcy Exceptions.
(xx) The Debentures are in the form contemplated by the
Indenture, have been duly authorized, executed and delivered by the
Company and, when authenticated by the Debt Trustee in the manner
provided for in the Indenture and delivered against payment
therefor by the Trust, will constitute valid and binding
obligations of the Company, enforceable against the Company in
accordance with their terms, except to the extent that enforcement
thereof may be limited by the Bankruptcy Exceptions.
(xxi) The entry into the Purchase Contracts underlying the
Securities by the Company, the offer of the Securities as
contemplated herein and in the Prospectus, the issuance of the
Shares and the sale of the Shares by the Company pursuant to the
Purchase Contracts, the execution, delivery and performance of this
Agreement, the Pricing Agreement, the Remarketing Agreement, the
Purchase Contracts, the Purchase Contract Agreement, the Pledge
Agreement, the Declaration, the Capital Securities, the Common
Securities, the Indenture, the Debentures, the Guarantee Agreement
and the Guarantees, and the consummation of the transactions
contemplated herein, therein and the Registration Statement
(including the issuance and sale of the Securities and the use of
proceeds from the sale of the Securities as described in the
prospectus under the caption "Use of Proceeds") and compliance by
the Offerors with their obligations hereunder and thereunder have
been authorized by all necessary action (corporate or otherwise)
and do not and will not, whether with or without the giving of
notice or passage of time or both, conflict with or constitute a
breach of any of the terms or provisions of, or constitute a
default or Repayment Event (as defined below) under, or result in
the creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Company, any subsidiary or the Trust
pursuant to, the Agreements and Instruments (except for such
conflicts, breaches or defaults or liens, charges or encumbrances
that would not result in a Material Adverse Effect), nor will such
action result in any violation of the provisions of the charter or
bylaws of the Company or any Significant Subsidiary or the
Declaration or Certificate of Trust or any applicable law, statute,
rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Company, any subsidiary or
the Trust or any of their assets, properties or operations. As
used herein, a "Repayment Event" means any event or condition which
<PAGE>
gives the holder of any note, debenture or other evidence of
indebtedness (or any person acting on such holder's behalf) the
right to require the repurchase, redemption or repayment of all or
a portion of such indebtedness by the Company, any subsidiary or
the Trust.
(xxii) All conditions precedent provided for in the Purchase
Contract Agreement relating to the authentication and delivery of
the Security Certificates have been complied with and the Company
is duly entitled to the authentication and delivery of the Security
Certificates in accordance with the terms of the Purchase Contract
Agreement; the Security Certificates are in a form contemplated by
the Purchase Contract Agreement and comply with all applicable
statutory requirements and with the requirements of the New York
Stock Exchange.
(xxiii) There are no actions, suits or proceedings before or by
any court or governmental agency or body, domestic or foreign, now
pending or, to the best of such counsel's knowledge, threatened,
which are required to be disclosed in the Registration Statement or
the Prospectus, other than those disclosed therein.
(xxiv) The information in the Prospectus under the caption
"Description of the Common Stock," to the extent that it involves
matters of law, summaries of legal matters, documents or
proceedings, or legal conclusions, has been reviewed by such
counsel and is correct in all material respects.
(xxv) To the best of such counsel's knowledge and
information, there are no contracts, indentures, mortgages,
agreements, notes, leases or other instruments required to be
described or referred to or incorporated by reference in the
Registration Statement or to be filed as exhibits thereto other
than those described or referred to or incorporated by reference
therein or filed as exhibits thereto; the descriptions thereof or
references thereto are true and correct in all material respects,
and no default exists in the due performance or observance of any
material obligation, agreement, covenant or condition contained in
any contract, indenture, mortgage, agreement, note, lease or other
instrument so described, referred to, filed or incorporated by
reference which would result in a Material Adverse Effect.
(xxvi) No authorization, approval, consent, order,
registration or qualification of or with any court or federal or
state governmental authority or agency is required for the issuance
and sale of the Securities by the Offerors to the Underwriter or
the performance by the Trust and the Company of their respective
obligations in this Agreement, the Remarketing Agreement, the
Pricing Agreement, the Purchase Contract Agreement, the Purchase
Contracts, the Pledge Agreement, the Indenture, the Debentures, the
Guarantee Agreement, the Declaration and the Securities except such
as has been obtained and made under the federal securities laws or
such as may be required under state or foreign securities or Blue
Sky laws.
(xxvii) The Company and its subsidiaries possess all licenses,
franchises, permits, certificates, authorizations, approvals,
<PAGE>
consents and orders of all governmental authorities or agencies
necessary for the ownership or lease of the material properties
owned or leased by each of them and for the operation of the
business carried on by each of them as described in the
Registration Statement and the Prospectus with such exceptions as
are not material and do not materially interfere with the conduct
of the business of the Company and its subsidiaries, considered as
one enterprise; all such licenses, franchises, permits,
certificates, authorizations, approvals, consents and orders are in
full force and effect and, except as otherwise set forth in the
Registration Statement or the Prospectus, there are no legal or
governmental proceedings pending or, to such counsel's knowledge,
threatened that would result in a material modification, suspension
or revocation thereof.
Moreover, such counsel shall confirm that nothing has come to such
counsel's attention that would lead such counsel to believe that the
Registration Statement, including any information provided pursuant to
Rule 430A or Rule 434 (except for financial statements and the notes
thereto, the financial schedules and any other financial data included
or incorporated by reference therein, as to which counsel need express
no opinion), at the time it became effective or at the Representation
Date, 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 (except for
financial statements and the notes thereto, the financial schedules, and
any other financial data included or incorporated by reference therein,
as to which counsel need express no opinion), at the Representation Date
(unless the term "Prospectus" refers to a prospectus which has been
provided to the Underwriter by the Company for use in connection with
the offering of the Securities which differs from the Prospectus on file
at the Commission at the time the Registration Statement became
effective, in which case at the time it is first provided to the
Underwriter for such use) or at the Closing Time, included (or includes)
an untrue statement of a material fact or omitted or omits 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.
In giving such opinion, such counsel may rely, as to matters of
Delaware law, upon the opinion of Richards, Layton & Finger, P.A., special
Delaware counsel to the Offerors, in which case the opinion shall state that
such counsel believes that you and such counsel are entitled to so rely.
(2) The favorable opinion, dated as of the Closing Time, of
Simpson Thacher & Bartlett, special counsel to the Offerors, in form and
substance satisfactory to counsel for the Underwriter and subject to the
qualifications and assumptions stated therein, to the effect that:
(i) The Registration Statement has become effective under the
1993 Act and the Prospectus was filed on March 19, 1998 pursuant to Rule
424(b) of the 1933 Act Regulations and, to our knowledge, no stop order
suspending the effectiveness of the Registration Statement has been
issued or proceeding for that purpose has been instituted or threatened
by the Commission.
(ii) The Registration Statement, as of its effective date, and
the Prospectus, as of its issue date complied as to form in all material
<PAGE>
respects with the requirements of the 1933 Act, the Trust Indenture Act
of 1939, as amended (the "Trust Indenture Act"), and the applicable
rules and regulations of the Commission thereunder, except that in each
case we express no opinion with respect to the financial statements or
other financial data contained or incorporated by reference in the
Registration Statement or the Prospectus.
(iii) The statements made in Prospectus under the captions
"Description of the FELINE PRIDES," "Description of the Purchase
Contracts," "Certain Provisions of the Purchase Contract Agreement and
the Pledge Agreement," "Description of the Guarantee," "Description of
the Debentures," and "Effect of Obligations Under the Debentures and the
Guarantee," insofar as they purport to constitute summaries of the
certain terms of the documents referred to therein, constitute accurate
summaries of the terms of such documents in all material respects.
(iv) The Purchase Contract Agreement and the Pledge Agreement
have been duly authorized, executed and delivered by the Company and
(assuming due execution and delivery by the Purchase Contract Agent)
constitute valid and binding agreements of the Company enforceable
against the Company in accordance with their respective terms, subject
to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles
(whether considered in a proceeding in equity or at law); provided,
however, that upon the occurrence of a Termination Event, Section
365(e)(1) of the Bankruptcy Code (11 U.S.C. Sections 101-1330, as
amended) should not invalidate or nulify the provisions of Sections 3.15
and 5.8 of the Purchase Contract Agreement and of Section 4.3 of the
Pledge Agreement that require termination of the Purchase Contracts and
release of the Collateral Agent's security interest in the Capital
Securities, the Debentures, the Applicable Ownership Interest in the
Treasury Portfolio or the Treasury Securities; provided, further, that
the automatic stay under Section 362 of the Bankruptcy Code may preclude
such termination for a period of time and the procedures for obtaining
relief from such stay may delay exercise of such termination rights.
(v) The Income PRIDES and the Growth PRIDES have each been duly
authorized, executed and delivered by the Company and (assuming due
execution by the Purchase Contract Agent as attorney-in-fact of the
holders thereof and due authentication by the Purchase Contract Agent)
and upon payment therefor as set forth in the Underwriting Agreement,
will be duly and validly issued and outstanding, and will constitute
valid and binding obligations of the Company entitled to the benefits of
the Purchase Contract Agreement and enforceable against the Company in
accordance with their terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganizations, moratorium and other
similar laws relating to or affecting creditors' rights generally, and
general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair
dealing.
(vi) The provisions of the Pledge Agreement are effective to
create in favor of the Collateral Agent for the benefit of the Company,
a valid and perfected security interest under the Uniform Commercial
Code as in effect on the date of such opinion in the State of New York
in the Pledged Capital Securities, Pledged Debentures, Applicable
<PAGE>
Ownership Interests (as specified in clause (A) of the definition
thereof in the Declaration) of the Treasury Portfolio and the Pledged
Treasury Securities from time to time credited to the Collateral
Account.
(vii) The Guarantee Agreement has been duly authorized, executed
and delivered by the Company and duly qualified under the Trust
Indenture Act and (assuming due execution and delivery by the Guarantee
Trustee) constitutes a valid and binding agreement of the Company
enforceable against the Company in accordance with its terms, subject to
the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles
(whether considered in a proceeding in equity or at law) and an implied
covenant of good faith and fair dealing.
(viii) The Indenture has been duly authorized, executed and
delivered by the Company and duly qualified under the Trust Indenture
Act, and (assuming due authentication, execution and delivery by the
Debt Trustee) constitutes valid and binding agreement of the Company
enforceable against the Company in accordance with its terms, subject to
the effect of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, and general equitable principles
(whether considered in a proceeding in equity or at law) and an implied
covenant of good faith and fair dealing.
(ix) The Debentures have been duly authorized, executed and
delivered by the Company and (assuming due authentication by the Debt
Trustee) and upon payment therefor as set forth herein, will constitute
valid and binding obligations of the Company entitled to the benefits of
the Indenture and enforceable in accordance with their terms, subject to
the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles
(whether considered in a proceeding in equity or at law) and an implied
covenant of good faith and fair dealing.
(x) The issuance and sale of the Income PRIDES and Growth PRIDES
in accordance with this Agreement do not contravene the Commodity
Exchange Act or the regulations of the Commodity Futures Trading
Commission.
(xi) None of the Trust nor the Company is, and upon the issuance
and sale of the Income PRIDES and Growth PRIDES as herein contemplated
and the application of the net proceeds therefrom as described in the
Prospectus will not be, an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined within
the meaning of and subject to registration under the Investment Company
Act of 1940, as amended.
(xii) Based upon current law and the assumptions stated or
referred to therein, under current United States Federal income tax law:
(i) the Trust will be classified as a grantor trust and not as an
association taxable as a corporation; (ii) the Debentures will be
classified as indebtedness of the Company and (iii) the discussion in
the Prospectus under the caption "Certain Federal Income Tax
<PAGE>
Consequences" is a fair and accurate summary of the matters addressed
therein.
Moreover, such counsel shall confirm that based upon their
examination of the Registration Statement and the Prospectus and their
investigations made in connection with the preparation of the Registration
Statement and the Prospectus (excluding any documents incorporated therein)
and their participations in conferences with certain officers and employees
of the Company, with representatives of Price Waterhouse LLP and counsel to
the Company such counsel has no reason to believe that the Registration
Statement, as of its effective date (including any documents incorporated
therein on file with Commission on such effective date), contained any untrue
statement of a material fact or omitted to state any material fact required
to be stated therein or necessary in order to make the statements therein not
misleading or that the Prospectus as of its date or as of the Date of
Delivery (including the documents incorporated therein by reference) contains
any untrue statement of a material fact or omits to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that in each
case such counsel need express no belief with respect to the financial
statements or other financial data contained or incorporated by reference in
the Registration Statement, the Prospectus or the documents incorporated
therein.
In giving such opinion, such counsel may rely, as to matters of New
Jersey law, upon the opinion of Patricia Nachtigal, Esq. Vice President and
General Counsel of the Company.
(3) The favorable opinion, dated as of the Closing Time, of
Richards, Layton & Finger, P.A., special Delaware counsel to the Offerors, in
form and substance satisfactory to counsel for the Underwriter, to the effect
that:
(i) The Trust has been created and is validly existing in good
standing as a business trust under the Delaware Act, and has the trust
power and authority to conduct its business as described in the
Prospectus.
(ii) The Declaration constitutes a legal, valid and binding
obligation of the Company and is enforceable against the Company in
accordance with its terms, except that to the extent enforceability
thereof may be limited by the (i) bankruptcy, insolvency, moratorium,
receivership, reorganization, liquidation, fraudulent conveyance and
transfer, and other similar laws relating to or affecting the rights and
remedies of creditors generally, (ii) principles of equity, including
applicable law relating to fiduciary duties (regardless of whether
considered and applied in a proceeding in equity or at law), and (iii)
the effect of applicable public policy on the enforcement of provisions
related to indemnification.
(iii) Under the Delaware Act and the Declaration, the Trust has
the trust power and authority to (i) execute and deliver, and to perform
its obligations under, this Agreement and the Pricing Agreement and
(ii) issue, and perform its obligations under, the Trust Securities.
(iv) Under the Delaware Act and the Declaration, the execution
and delivery by the Trust of this Agreement and the Pricing Agreement,
<PAGE>
and the performance by the Trust of its obligations hereunder and under
the Pricing Agreement, have been authorized by all necessary trust
action on the part of the Trust.
(v) The Capital Securities have been authorized by the
Declaration and, when executed by the Trust and authenticated by the
Institutional Trustee in accordance with the Declaration and delivered
against payment therefor in accordance with the terms of this Agreement,
will be validly issued and, subject to qualifications hereinafter
expressed, fully paid and nonassessable undivided beneficial interests
in the assets of the Trust; the Holders of the Capital Securities, as
beneficial owners of the Trust, will be entitled to the same limitation
of personal liability extended to stockholders of private corporations
for profit organized under the General Corporation Law of the State of
Delaware; said counsel may note that the holders of the Capital
Securities may be obligated to make payments as set forth in the
Declaration.
(vi) The Common Securities have been authorized by the
Declaration and, when issued, executed and authenticated in accordance
with the terms of the Declaration, and delivered and paid for as set
forth in the Prospectus, will be validly issued, undivided beneficial
interests in the assets of the Trust.
(vii) Under the Delaware Act and the Declaration, the issuance of
the Trust Securities is not subject to preemptive or other similar
rights.
(viii) None of the execution and delivery by the Trust of, or the
performance by the Trust of its obligations under, this Agreement, the
issuance and sale of the Capital Securities by the Trust in accordance
with the terms of this Agreement and the Pricing Agreement, or the
consummation by the Trust of the other transactions contemplated
thereby, will contravene any provisions of applicable Delaware law or
Delaware administrative regulations or the Certificate of Trust or the
Declaration.
(ix) No authorization, approval, consent, order, registration or
qualification of or with any Delaware state governmental authority or
Delaware state agency is required for the entry into the Purchase
Contracts underlying the Securities, the issuance and sale by the Trust
of the Capital Securities to the Underwriter, or the performance by the
Company and the Trust of their respective obligations under this
Agreement, the Pricing Agreement, the Purchase Contracts, the Purchase
Contract Agreement, the Pledge Agreement, the Indenture, the Debentures,
the Capital Securities Guarantee Agreement, the Capital Securities
Guarantee, the Declaration and the Trust Securities, except such counsel
need not express any opinion regarding any securities laws.
(4) The favorable opinion, dated as of the Closing Pepper Hamilton
LLP, counsel to First National Bank of Chicago, as Institutional Trustee
under the Declaration, and Guarantee Trustee under the Guarantee Agreement,
and to First Chicago Delaware Inc., as Delaware Trustee, in form and
substance satisfactory to counsel for the Underwriter, to the effect that:
(i) The Institutional Trustee is a national banking association
with trust powers, duly organized, validly existing and in good standing
<PAGE>
under the laws of the United States with all necessary corporate power
and authority to execute, deliver, and to carry out and perform its
obligations under the terms of, the Declaration and the Guarantee.
(ii) The Delaware Trustee is a Delaware corporation, duly
organized, validly existing and in good standing, with full corporate
power and authority to execute and deliver, and to carry out and perform
its obligations under the terms of, the Declaration.
(iii) The execution, delivery and performance by each of the
Institutional Trustee and the Delaware Trustee of the Declaration, and
the execution, delivery and performance by Guarantee Trustee of the
Guarantee, have been duly authorized by all necessary corporate action
on the part of the Institutional Trustee and the Delaware Trustee,
respectively, in the case of the Declaration, and by the Guarantee
Trustee, in the case of the Guarantee. The Declaration and the
Guarantee have been duly executed and delivered by the Institutional
Trustee and the Delaware Trustee, respectively, in the case of the
Declaration, and by the Guarantee Trustee, in the case of the Guarantee,
and constitute the legal, valid and binding obligation of the
Institutional Trustee and the Delaware Trustee, in the case of the
Declaration, and of the Guarantee Trustee, in the case of the Guarantee,
enforceable against the Institutional Trustee and the Delaware Trustee
in the case of the Declaration, and against the Guarantee Trustee, in
the case of the Guarantee, in accordance with their terms. Such
opinions may be limited by (i) public policy considerations; (ii)
applicable bankruptcy, solvency, reorganization, moratorium, fraudulent
conveyance or other laws affecting the enforcement of creditors' rights
generally, as well as awards by courts of relief in lieu of the remedy
of specific performance of contractual provisions; and (iii) general
principles of equity (regardless of whether such enforceability is
considered a proceeding in equity or at law) as a court having
jurisdiction may impose.
(iv) The execution, delivery and performance by each of the
Institutional Trustee and the Delaware Trustee of the Declaration, and
the execution, delivery and performance by the Guarantee Trustee of the
Guarantee, do not conflict with, or constitute a breach of, the
Institutional Trustee's, the Delaware Trustee's or the Guarantee
Trustee's respective charter or bylaws.
(5) The favorable opinion, dated as of the Closing Time, of Emmet,
Marvin & Martin, counsel to The Bank of New York, as Purchase Contract Agent,
in form and substance satisfactory to counsel for the Underwriter, to the
effect that:
(i) The Bank of New York, is duly incorporated and is validly
existing as a banking corporation with trust powers under the laws of
the United States with all necessary power and authority to execute,
deliver and perform its obligations under the Purchase Contract
Agreement and the Pledge Agreement.
(ii) The execution, delivery and performance by the Purchase
Contract Agent of the Purchase Contract Agreement and the Pledge
Agreement, and the authentication and delivery of the Securities have
been duly authorized by all necessary corporate action on the part of
the Purchase Contract Agent. The Purchase Contract Agreement and the
<PAGE>
Pledge Agreement have been duly executed and delivered by the Purchase
Contract Agent, and constitute the legal, valid and binding obligations
of the Purchase Contract Agent, enforceable against the Purchase
Contract Agent in accordance with its terms, except to the extent that
enforcement thereof may be limited by the Bankruptcy Exceptions.
(iii) the execution, delivery and performance of the Purchase
Contract Agreement and the Pledge Agreement by the Purchase Contract
Agent does not conflict with or constitute a breach of the charter or
by-laws of the Purchase Contract Agent.
(iv) No consent, approval or authorization of, or registration
with or notice to, any New York or federal governmental authority or
agency is required for the execution, delivery or performance by the
Purchase Contract Agent of the Purchase Contract Agreement and the
Pledge Agreement.
(6) The favorable opinion, dated as of the Closing Time, of
Skadden, Arps, Slate, Meagher & Flom LLP, counsel for the Underwriter, in
form and substance satisfactory to the Underwriter, with respect to the
issuance and sale of the Securities, and other related matters as the
Underwriter may reasonably require, and the Company shall have furnished to
such counsel such documents as they request for the purpose of enabling them
to pass upon such matters.
(c) Between the date of this Agreement and prior to the Closing
Time, no material adverse change shall have occurred in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Trust or the Company and its subsidiaries, considered as one
enterprise, whether or not in the ordinary course of business.
(d) At the Closing Time, the Underwriter shall have received a
certificate of the President or a Vice-President of the Company and of the
Chief Financial Officer or Chief Accounting Officer of the Company and a
certificate of a Regular Trustee of the Trust, and dated as of the Closing
Time, to the effect that (i) there has been no material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Trust or the Company and its subsidiaries
considered as one enterprise, whether or not in the ordinary course of
business, (ii) the representations and warranties in Section 1 hereof are
true and correct as though expressly made at and as of the Closing Time,
(iii) the Company and the Trust have complied with all agreements and
satisfied all conditions on their part to be performed or satisfied at or
prior to the Closing Time, and (iv) no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been initiated or threatened by the
Commission.
(e) At the time of the execution of this Agreement, the
Underwriter shall have received from Price Waterhouse LLP a letter dated such
date in form and substance satisfactory to the Underwriter, to the effect set
forth below and as to such other matters as the Underwriter may reasonably
request, that:
(i) They are independent accountants with respect to the Company
within the meaning of the Act and the applicable published rules and
regulations thereunder.
<PAGE>
(ii) In their opinion, the consolidated financial statements
audited by them and incorporated by reference in the Registration
Statement comply as to form in all material respects with the applicable
accounting requirements of the 1933 Act and the 1934 Act and the
published rules and regulations thereunder with respect to registration
statements on Form S3.
(iii) They have not audited any financial statements of the
Company as of any date or for any period subsequent to December 31,
1997. Therefore, they are unable to and do not express any opinion on
the financial position, results of operations or cash flows as of any
date or for any period subsequent to December 31, 1997.
(iv) For purposes of such letter, they have read the minutes of
the 1998 meetings of the Board of Directors and the Board Committees
(Compensation and Nominating, Corporate Affairs, Audit and Finance) of
the Company as set forth in the minute books at March 13, 1998,
officials of the Company having advised them that the minutes of all
such meetings through that date were set forth therein (except for the
minutes of the February 3, 1998 Audit Committee meeting, the March 3,
1998 Finance Committee meeting and the March 3, 1998 Corporate Affairs
Committee meeting which were not approved in final form, for which
drafts were provided to them; and except for the February 3, 1998
Compensation and Nominating Committee meeting and the March 4, 1998
Board of Directors meeting for which no minutes were available and for
which an agenda for the meeting was provided to them; the officials of
the Company have represented that such drafts and agenda include all
substantive actions taken at such meetings), and have carried out other
procedures to March 13, 1998 (their work did not extend to the period
from March 14, 1998 to March 17, 1998, inclusive), as follows:
a. With respect to the period from January 1, 1998 to
February 28, 1998 they have:
(1) read the unaudited consolidated financial data of
the Company and subsidiaries for January of both 1997 and 1998
furnished them by the Company, officials of the Company having
advised them that no such financial data as of any date or for
any period subsequent to January 31, 1998 were available; and
(2) inquired of certain officials of the Company who
have responsibility for financial and accounting matters as to
whether the unaudited financial data referred to in 4.a.(1)
above are stated on a basis substantially consistent with that
of the audited financial statements included in the
Registration Statement.
The foregoing procedures do not constitute an audit made in accordance
with generally accepted auditing standards. Also, they would not
necessarily reveal matters of significance with respect to the comments
in the following paragraph. Accordingly, they make no representations as
to the sufficiency of the foregoing procedures for the Underwriter's
purposes.
(v) Nothing came to their attention as a result of the foregoing
procedures, however, that caused them to believe that:
<PAGE>
a. (i) At January 31, 1998 there was any change in the
capital stock (except for any increases in the capital stock in
connection with any employee benefit, dividend reinvestment or
stock purchase plan of the Company), increase in longterm debt or
any decreases in consolidated net current assets (working capital)
or shareholders' equity of the Company and consolidated
subsidiaries as compared with amounts shown in the December 31,
1997 audited consolidated balance sheet incorporated by reference
in the Registration Statement or (ii) for the period from January
1, 1998 to January 31, 1998, there were any decreases, as compared
with the corresponding period in the preceding year, in
consolidated net sales or in the total or per share amounts of net
income, except in all instances for changes, increases, or
decreases that the Registration Statement discloses have occurred
or may occur.
(vi) As mentioned under (iv)a, Company officials have advised
them that no consolidated financial data as of any date or for any
period subsequent to February 28, 1998 are available; accordingly, the
procedures carried out by them with respect to changes in financial
statement items after February 28, 1998 have been, of necessity, even
more limited than those with respect to the period referred to in (iv).
They have made inquiries of certain officials of the Company who have
responsibility for financial and accounting matters as to whether there
was any increase in longterm debt or any decrease in shareholders'
equity of the Company and consolidated subsidiaries at March 13, 1998 as
compared with amounts shown on the December 31, 1997 audited
consolidated balance sheet incorporated by reference in the Registration
Statement. On the basis of these inquiries and their reading of the
minutes as described in (iv), nothing came to their attention that
caused them to believe that there was any such change, increase or
decrease, except in all instances for increases or decreases which the
Registration Statement discloses have occurred or may occur.
(vii) For purposes of such letter, they have also read the items
identified by the Underwriter on the Form 10K forming part of the
Registration Statement incorporated by reference thereto and have
performed the procedures described in such letter.
(viii) Their audit of the consolidated financial statements for the
period referred to in the introductory paragraph of such letter
comprised audit tests and procedures deemed necessary for the purpose of
expressing an opinion on such consolidated financial statements taken as
a whole. For neither the periods referred to therein nor any other
period did they perform audit tests for the purpose of expressing an
opinion on individual balances of accounts or summaries of selected
transactions such as those enumerated in such letter and, accordingly,
they express no opinion thereon.
(ix) They have:
a. Read the unaudited pro forma condensed consolidated
statement of income for the year ended December 31, 1997,
incorporated by reference in the Registration Statement.
b. Inquired of certain officials of the Company who have
responsibility for financial and accounting matters about:
<PAGE>
(1) The basis for their determination of the pro forma
adjustments, and
(2) Whether the unaudited pro forma condensed
consolidated financial statement referred to in 9.a. complies
as to form in all material respects with the applicable
accounting requirements of Rule 1102 of Regulation SX.
c. Proved the arithmetic accuracy of the application of the
pro forma adjustments to the historical amounts in the unaudited
pro forma condensed consolidated financial statement.
The foregoing procedures are substantially less in scope than an
examination, the objective of which is the expression of an opinion on
management's assumptions, the pro forma adjustments, and the application
of those adjustments to historical financial information. Accordingly,
they do not express such an opinion. The foregoing procedures would not
necessarily reveal matters of significance with respect to the comments
in the following paragraph. Accordingly, they make no representation
about the sufficiency of such procedures for the Underwriter's purposes.
(x) Nothing came to their attention as a result of the
procedures specified in paragraph (ix), however, that caused them to
believe that the unaudited pro forma condensed consolidated financial
statement referred to in (ix)a. incorporated by reference in the
Registration Statement does not comply as to form in all material
respects with the applicable accounting requirements of Rule 1102 of
Regulation SX and that the pro forma adjustments have not been properly
applied to the historical amounts in the compilation of those
statements. Had they performed additional procedures or had they made an
examination of the condensed consolidated pro forma financial statement,
other matters might have come to their attention that would have been
reported to the Underwriter.
(f) at the time of the execution of this Agreement, the
Underwriter shall have received from KPMG Peat Marwick LLP independent
certified public accountants to Thermo King Corporation ("Thermo King"), a
letter dated such date in form and substance satisfactory to the Underwriter,
to the effect set forth below and as to such other matters as the Underwriter
may reasonably request, that:
(i) They are independent certified public accountants with
respect to Thermo King within the meaning of the Act and the applicable
published rules and regulations thereunder.
(ii) In their opinion, the combined financial statements audited
by them and incorporated by reference in the Registration Statement
comply as to form in all material respects with the applicable
accounting requirements of the 1933 Act and the related published rules
and regulations thereunder with respect to a registration statement on
Form S-3.
(iii) They have not audited any financial statements of Thermo
King as of any date or for any period subsequent to December 31, 1996;
although they have conducted an audit for the year ended December 31,
1996, the purpose (and therefore the scope) of the audit was to enable
them to express their opinion on the combined financial statements as of
<PAGE>
December 31, 1996, and for the year then ended, but not on the financial
statement for any interim period within that year. Therefore, they are
unable to and do not express any opinion on the unaudited combined
balance sheet as of September 30, 1997 and 1996, and the unaudited
combined statements of income and cash flows for the nine-month periods
ended September 30, 1996 and 1997, incorporated by reference in the
registration statement, or on the financial position or results of
operations as of any date or for any period subsequent to December 31,
1996.
(iv) Thermo King was acquired by the Company effective October
31, 1997. They have performed no procedures since that date. For
purposes of such letter they have read the minutes of the meetings of
the Board of Directors of Thermo King as set forth in the minute books
at October 31, 1997, officials of Thermo King having advised them that
the minutes of all such meetings through that date were set forth
therein; they have carried out other procedures to October 31, 1997, as
follows (their work did not extend to the period from November 1, 1997,
to March 17, 1998, inclusive:
a. With respect to the nine-month period ended September
30, 1997 they have:
(1) Performed the procedures specified by the
American Institute of Certified Public Accountants for a
review of interim financial information as described in SAS
No. 71, Interim Financial Information, on the unaudited
combined balance sheet as of September 30, 1997, and the
unaudited combined statement of income and cash flows for the
nine-month period ended September 30, 1997, incorporated by
reference in the Registration Statement.
(2) Inquired of certain officials of Thermo King
who have responsibility for financial sand accounting matters
whether the unaudited combined financials statements referred
to in 4.a.(i) comply as to form in all material respects with
the applicable accounting requirements of the Act and the
related published rules and regulations.
The foregoing procedures do not constitute an audit conducted in
accordance with generally accepted auditing standards. Also, they
would not necessarily reveal matters of significance with respect
to the comments in the following paragraph. Accordingly, they make
no representations regarding the sufficiency of the foregoing
procedures of the Underwriter's purposes.
(v) Nothing came to their attention as a result of the
foregoing procedures, however, that caused them to believe that:
a. (1) Any material modifications should be made to the
unaudited combined financial statements described in 4.a.(i),
incorporated by reference in the registration statement, for them
to be in conformity with generally accepted accounting principles.
(vi) The Company was acquired by Ingersoll-Rand Company effective
October 31, 1997. They have performed no procedures since that date.
They have inquired of certain officials of Thermo King who have
<PAGE>
responsibility for financial and accounting matters whether (a) at
October 31, 1997, there was any increase in long-term debt or any
decreases in combined net current assets of the combined companies as
compared with amounts shown on the September 30, 1997, unaudited
combined balance sheet incorporated by reference in the registration
statement and (b) for the period from October 1, 1997, to October 31,
1997, there were any decreases, as compared with the corresponding
period in the preceding year, in combined net sales or in the amount of
income before interest and taxes. On the basis of these inquiries and
their reading of the minutes as described in 4, nothing came to their
attention that caused them to believe that there was any such change,
increase, or decrease, except in all instances for increases, or
decreases that the Registration Statement discloses have occurred or may
occur.
(g) At the Closing Time, the Underwriter shall have received from
Price Waterhouse, LLP a letter, dated as of the Closing Time, to the effect
that they reaffirm the statements made in the letter furnished pursuant to
subsection (e) of this Section, except that the specified date referred to
shall be a date not more than five days prior to the Closing Time.
(h) At the Closing Time, and at each Date of Delivery, if any,
counsel for the Underwriter shall have been furnished with such documents and
opinions as they may require for the purpose of enabling them to pass upon
the issuance and sale of the Securities as herein contemplated and related
proceedings, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the conditions
herein contained; and all proceedings taken by the Offerors in connection
with the issuance and sale of the Securities as herein contemplated shall be
satisfactory in form and substance to the Underwriter and counsel for the
Underwriter.
(i) At the Closing Time, (i) the Securities shall be rated
Investment Grade by any nationally recognized statistical rating agency, and
the Offerors shall have delivered to the Underwriter a letter, from such
nationally recognized statistical rating agency, or other evidence
satisfactory to the Underwriter, confirming that the Securities have
Investment Grade ratings; (ii) there shall not have occurred any decrease in
the rating assigned to the Securities or any other securities of the Company
or of the financial condition of the Company by any "nationally recognized
statistical rating organization," as defined for purposes of Rule 436(g)(2)
under the 1933 Act Regulations, and (iii) no such organization shall have
publicly announced that it has under surveillance or review its rating of the
Securities or any other securities of the Company or of the financial
condition of the Company.
(j) At the Closing Time, the Income PRIDES, the Growth PRIDES and
the Shares shall have been approved for listing on the New York Stock
Exchange upon notice of issuance.
(k) In the event that the Underwriter exercises the options
provided in Section 2(b) hereof to purchase all or any portion of the Option
Securities, the representations and warranties of the Offerors contained
herein and the statements in any certificates furnished by the Offerors
hereunder shall be true and correct as of, and as if made on, each Date of
Delivery, and at the relevant Date of Delivery, the Underwriter shall have
received:
<PAGE>
(1) A certificate, dated such Date of Delivery, of the President
or a Vice-President of the Company and the Chief Financial Officer or
Chief Accounting Officer of the Company and a certificate of a Regular
Trustee of the Trust confirming that the certificate delivered at the
Closing Time pursuant to Section 5(d) hereof is true and correct as of,
and as if made on, such Date of Delivery.
(2) The favorable opinion of Patricia Nachtigal, Esq., Vice
President and General Counsel for the Company, in form and substance
satisfactory to counsel for the Underwriter, dated such Date of
Delivery, relating to the Option Securities and otherwise to the same
effect as the opinion required by Section 5(b)(1) hereof.
(3) The favorable opinion of Simpson Thacher & Bartlett, special
counsel and special tax counsel for the Offerors, in form and substance
satisfactory to counsel for the Underwriter, dated such Date of
Delivery, relating to the Option Securities and otherwise to the same
effect as the opinion required by Sections 5(b)(2) and 5(b)(6) hereof.
(4) The favorable opinion of Richards, Layton & Finger, P.A.,
special Delaware counsel for the Offerors, in form and substance
satisfactory to counsel for the Underwriter, dated such Date of
Delivery, relating to the Option Securities and otherwise to the same
effect as the opinion required by Section 5(b)(3) hereof.
(5) The favorable opinion of Pepper Hamilton LLP counsel to The
First National Bank of Chicago, in form and substance satisfactory to
counsel for the Underwriter, dated such Date of Delivery, relating to
the Option Securities and otherwise to the same effect as the opinion
required by Section 5(b)(4) hereof.
(6) The favorable opinion of Emmet, Marvin and Martin, counsel to
The Bank of New York, as Purchase Contract Agent, in form and substance
satisfactory to counsel for the Underwriter, dated such Date of
Delivery, relating to the Option Securities and otherwise to the same
effect as the opinion required by Section 5(b)(5) hereof.
(7) The favorable opinion of Skadden, Arps, Slate, Meagher & Flom
LLP, counsel for the Underwriter, dated such Date of Delivery, relating
to the Option Securities and otherwise to the same effect as the opinion
required by Section 5(b)(7) hereof.
(8) A letter from Price Waterhouse LLP in form and substance
satisfactory to the Underwriter and dated such Date of Delivery,
substantially the same in form and substance as the letter furnished to
the Underwriter pursuant to Section 5(e) hereof, except that the
"specified date" in the letter furnished pursuant to this Section shall
be a date not more than five days prior to such Date of Delivery.
(9) At such Date of Delivery, (i) the Securities shall be rated
Investment Grade by any nationally recognized statistical rating agency,
and the Offerors shall have delivered to the Underwriter a letter from
such nationally recognized statistical rating agency, or other evidence
satisfactory to the Underwriter, confirming that the Securities have
Investment Grade ratings; (ii) there shall not have occurred any
decrease in the rating assigned to the Securities or any other
securities of the Company or of the financial condition of the Company
<PAGE>
by any "nationally recognized statistical rating organization," as
defined for purposes of Rule 436(g)(2) under the 1933 Act Regulations,
and (iii) no such organization shall have publicly announced that it has
under surveillance or review its rating of the Securities or any other
securities of the Company or of the financial condition of the Company.
If any condition specified in this Section 5 shall not have been
fulfilled when and as required to be fulfilled, this Agreement, or, in the
case of any condition to the purchase of Option Securities on a Date of
Delivery which is after the Closing Time, the obligations of the Underwriter
to purchase the relevant Option Securities may be terminated by the
Underwriter by notice to the Company at any time at or prior to the Closing
Time, or such Date of Delivery, as the case may be, and such termination
shall be without liability of any party to any other party except as provided
in Section 4 and except that Sections 1, 6, 7 and 8 shall survive any such
termination and remain in full force and effect.
SECTION 6. Indemnification.
(a) The Offerors agree to jointly and severally indemnify and hold
harmless the Underwriter and each person, if any, who controls the
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule
430A Information and the Rule 434 Information deemed to be part thereof,
if applicable, or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue statement
or alleged untrue statement of a material fact included in any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a material
fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or proceeding
by any governmental agency or body, commenced or threatened, or of any
claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission, provided, that (subject
to Section 6(d) below) any such settlement is effected with the written
consent of the Offerors; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by the
Underwriter), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
<PAGE>
provided, however, that the foregoing indemnity agreement shall not apply to
any loss, liability, claim, damage or expense to the extent arising out of
any untrue statement or omission or alleged untrue statement or omission made
in reliance upon and in conformity with written information furnished to the
Offerors by the Underwriter expressly for use in the Registration Statement
(or any amendment thereto), including the Rule 430A Information and the Rule
434 Information deemed to be a part thereof, if applicable, or any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto).
(b) The Underwriter agrees to indemnify and hold harmless the
Company, its directors, each of its officers who signed the Registration
Statement, the Trust and each of its Trustees who signed the Registration
Statement, and each person, if any, who controls the Company within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against
any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements
or omissions, made in the Registration Statement (or any amendment thereto),
including the Rule 430A Information and the Rule 434 Information deemed to be
a part thereof, if applicable, or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Offerors by the
Underwriter expressly for use in the Registration Statement (or any amendment
thereto) or such preliminary prospectus or the Prospectus (or any amendment
or supplement thereto).
(c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure
to so notify an indemnifying party shall not relieve such indemnifying party
from any liability hereunder to the extent it is not materially prejudiced as
a result thereof and in any event shall not relieve it from any liability
which it may have otherwise than on account of this indemnity agreement. In
the case of parties indemnified pursuant to Section 6(a) above, counsel to
the indemnified parties shall be selected by the Underwriter, and, in the
case of parties indemnified pursuant to section 6(b) above, counsel to the
indemnified parties shall be selected by the Company. An indemnifying party
may participate at its own expense in the defense of any such action;
provided, however, that counsel to the indemnifying party shall not (except
with the consent of the indemnified party) also be counsel to the indemnified
party. In no event shall the indemnifying parties be liable for fees and
expenses of more than one counsel (in addition to any local counsel) separate
from their own counsel for all indemnified parties in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding
by any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be
sought under this Section 6 or Section 7 hereof (whether or not the
indemnified parties are actual or potential parties thereto), unless such
settlement, compromise or consent (i) includes an unconditional release of
each indemnified party from all liability arising out of such litigation
investigation, proceeding or claim and (ii) does not include a statement as
<PAGE>
to or an admission of fault, culpability or a failure to act by or on behalf
of any indemnified party.
(d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses
of counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 6(a)(ii) effected without
its written consent if (i) such settlement is entered into more than 45 days
after receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement
at least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
SECTION 7. Contribution. If the indemnification provided for in
Section 6 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims,
damages and expenses incurred by such indemnified party, as incurred, (i) in
such proportion as is appropriate to reflect the relative benefits received
by the Offerors on the one hand, and the Underwriter, on the other hand, from
the offering of the Securities pursuant to this Agreement or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Offerors
on the one hand, and the Underwriter, on the other hand, in connection with
the statements or omissions which resulted in such losses, liabilities,
claims, damages or expenses, as well as any other relevant equitable
considerations.
The relative benefits received by Offerors on the one hand, and the
Underwriter, on the other hand, in connection with the offering of the
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of such
Securities (before deducting expenses) received by the Offerors and the total
underwriting discount received by the Underwriter, in each case as set forth
on the cover of the Prospectus, or, if Rule 434 is used, the corresponding
location on the Term Sheet bear to the aggregate initial public offering
price of such Securities as set forth on such cover.
The relative fault of the Offerors, on the one hand, and the
Underwriter, 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 Offerors or by the Underwriter and the parties'
relative intent, knowledge, access to information and opportunity to correct
or prevent such statement or omission.
The Offerors and the Underwriter agree that it would not be just
and equitable if contribution pursuant to this Section 7 were determined by
pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to above in this Section 7.
The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 7
shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in investigating, preparing or defending against any
<PAGE>
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, the Underwriter
shall not be required to contribute any amount in excess of the amount by
which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of
any damages which the 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 1933 Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls
the Underwriter within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act shall have the same rights to contribution as the
Underwriter, and each director of the Company, each officer of the Company
and each Trustee of the Trust who signed the Registration Statement, and each
person, if any, who controls the Company and the Trust within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same
rights to contribution as the Offerors.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement and the Pricing Agreement, or contained in certificates of officers
of the Company or trustees of the Trust submitted pursuant hereto, shall
remain operative and in full force and effect, regardless of any
investigation made by or on behalf of the Underwriter or controlling person,
or by or on behalf of the Company, and shall survive delivery of and payment
for the Securities to the Underwriter.
SECTION 9. Termination of Agreement.
(a) The Underwriter may terminate this Agreement, by notice to the
Company at any time at or prior to the Closing Time, if (i) there has been,
since the date of this Agreement or since the respective dates as of which
information is given in the Prospectus, any material adverse change or any
development which could reasonably be expected to result in a prospective
material adverse change, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its subsidiaries considered
as one enterprise, whether or not arising in the ordinary course of business,
or (ii) there has occurred any material adverse change in the financial
markets in the United States or any outbreak of hostilities or escalation of
hostilities or other calamity or crisis, or any change or development
involving a prospective change in national or international political,
financial or economic conditions the effect of which is such as to make it,
in the judgment of the Underwriter impracticable to market the Securities or
to enforce contracts for the sale of the Securities, or (iii) if trading in
the Common Stock or any other security of the Company has been suspended or
limited by the Commission, NASD or the New York Stock Exchange, or if trading
generally on either the American Stock Exchange, the New York Stock Exchange
or in the over-the-counter market has been suspended or limited, or minimum
or maximum prices for trading have been fixed, or maximum ranges for prices
for securities have been required, by either of said exchanges or by such
<PAGE>
system or by order of the Commission, NASD or any other governmental
authority, or (iv) if a banking moratorium has been declared by either
Federal, New York or New Jersey authorities.
(b) If this Agreement and the Pricing Agreement are terminated
pursuant to this Section 9, such termination shall be without liability of
any party to any other party except as provided in Section 4, and provided,
further, that Sections 1, 6, 7 and 8 shall survive such termination and
remain in full force and effect.
SECTION 10. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed or transmitted by any standard form of telecommunication. Notices to
the Underwriter shall be directed to the Underwriter c/o Merrill Lynch at
Merrill Lynch World Headquarters, World Financial Center, North Tower, New
York, New York 10281, Attention of Huston McCollough, Managing Director, with
a copy to Skadden, Arps, Slate, Meagher & Flom LLP, Attention of John Osborn,
Esq.; notices to the Offerors shall be directed to it at Ingersoll-Rand
Company, 200 Chestnut Ridge Road, Woodcliff Lake, New Jersey 07675,
Attention of Patricia Nachtigal, Esq., Vice President and General Counsel.
SECTION 11. Parties. This Agreement and the Pricing Agreement
shall each inure to the benefit of and be binding upon the Offerors and the
Underwriter and their respective successors. Nothing expressed or mentioned
in this Agreement or the Pricing Agreement is intended or shall be construed
to give any person, firm or corporation, other than the Underwriter and the
Offerors and their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 and their heirs and
legal representatives, any legal or equitable right, remedy or claim under or
in respect of this Agreement or the Pricing Agreement or any provision herein
or therein contained. This Agreement and the Pricing Agreement and all
conditions and provisions hereof and thereof are intended to be for the sole
and exclusive benefit of the parties hereto and thereto and their respective
successors and legal representatives, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities
from the Underwriter shall be deemed to be a successor by reason merely of
such purchase.
SECTION 12. GOVERNING LAW AND TIME. THIS AGREEMENT AND THE
PRICING AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY
TIME UNLESS OTHERWISE INDICATED.
SECTION 13. Effect of Headings. The Article and Section headings
herein are for convenience only and shall not affect the construction hereof.
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, shall become a
binding agreement among the Company, the Trust and the Underwriter in
accordance with its terms.
Very truly yours,
INGERSOLL-RAND COMPANY
By: /s/ William J. Armstrong
Name: /s/ William J. Armstrong
Title: Vice President and Treasurer
INGERSOLL-RAND FINANCING I
By: INGERSOLL-RAND COMPANY
as Depositor
By: /s/ William J. Armstrong
Name: /s/ William J. Armstrong
Title: Vice President and Treasurer
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/ Douglas W. Squires
Name: /s/ Douglas W. Squires
Authorized Signatory: Managing Director
<PAGE>
Schedule I
Significant Subsidiaries
Clark Equipment Company
Thermo King Corporation
The Torrington Company
Sclage Lock Company
<PAGE>
Ingersoll-Rand Company
(a New Jersey Corporation)
Ingersoll-Rand Financing I
(a Delaware Business Trust)
14,000,000 FELINE PRIDES/sm/
(Stated Amount of $25 per Security)
Consisting of
12,600,000 Income PRIDES/sm/
each consisting of
a Purchase Contract of Ingersoll-Rand Company Requiring the
Purchase on May 16, 2001 (or earlier) of certain Shares of Common
Stock of Ingersoll-Rand Company
and
a 6.22% Capital Security of Ingersoll-Rand Financing I
and
1,400,000 Growth PRIDES/sm/
each consisting of
a Purchase Contract of Ingersoll-Rand Company Requiring the
Purchase on May 16, 2001 (or earlier) of certain shares of Common
Stock of Ingersoll-Rand Company
and
a 1/40 Undivided Beneficial Interest in a Zero-Coupon U.S.
Treasury Security having a Principal Amount equal to $1,000 and
maturing on May 15, 2001
and
1,400,000 6.22% Capital Securities of Ingersoll-Rand Financing I
(Liquidation Amount $25 per Capital Security)
PRICING AGREEMENT
_____________________
"FELINE PRIDES," "Income PRIDES" and "Growth PRIDES" are service
marks of Merrill Lynch & Co., Inc.
<PAGE>
March 17, 1998
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED,
Merrill Lynch World Headquarters
World Financial Center
North Tower
New York, New York 10281
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement, dated March 17,
1998 (the "Underwriting Agreement"), relating to the purchase by the
Underwriter named therein of the above Income PRIDES (the "Income PRIDES"),
Growth PRIDES (The "Growth PRIDES") and Capital Securities (the "Capital
Securities" and, together with the Income PRIDES and Growth PRIDES, the
"Securities") of Ingersoll-Rand Company (the "Company"), and Ingersoll-Rand
Financing I (the "Trust"). The Securities are being issued and sold by the
Company and the Trust to the Underwriter on the terms and conditions set
forth in the Underwriting Agreement.
Pursuant to Section 2 of the Underwriting Agreement, the Company
and the Trust agree with the Underwriter as follows:
1. The initial public offering price, and the aggregate interest
rate to be paid by the Offerors, per security for the Securities,
determined as provided in said Section 2, shall be (a) in the case of
each Income PRIDES, $25.00 and 6.75%, (b) in the case of each Growth
PRIDES, $21.13 and .78% and (c) in the case of each separately offered
Capital Security, $25.00 and 6.22%.
2. The respective purchase prices per security for the Securities
to be paid by the several Underwriters shall be equal to the initial
public offering prices set forth in paragraph 1. above. The Company
shall pay a commission to the Underwriters equal, in the case of the
Initial Securities, to $10,500,000 and, with respect to the Option
Securities, $.75 per security in the case of Income PRIDES, $.575 per
security in the case of Growth PRIDES and $.175 per security in the case
of separately offered Capital Securities.
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, shall become a
binding agreement among the Company, the Trust and the Underwriter in
accordance with its terms.
Very truly yours,
INGERSOLL-RAND COMPANY
By:/s/ William J. Armstrong
Name: /s/ William J. Armstrong
Title: Vice President and Treasurer
INGERSOLL-RAND FINANCING I
By: INGERSOLL-RAND COMPANY
as Depositor
By:/s/ William J. Armstrong
Name: /s/ William J. Armstrong
Title: Vice President and Treasurer
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:/s/ Douglas W. Squires
Name: /s/ Douglas W. Squires
Authorized Signatory: Managing Director
<PAGE>
____________________
[FN]
<F1> "FELINE PRIDES," "Income PRIDES," and "Growth PRIDES" are service marks
of Merrill Lynch & Co., Inc.
Exhibit 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_____________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: March 25, 1998
INGERSOLL-RAND COMPANY
200 Chestnut Ridge Road
Woodcliff Lake, New Jersey 07675
(201) 573-0123
New Jersey 1-985 13-5156640
________________________________________________________________________
(State of Incorporation) (Commission File No.) (IRS Id. No.)
Exhibit Index on Page 4
<PAGE>
Item 5. Other Events
This Current Report on Form 8-K is being filed with the Securities
and Exchange Commission by Ingersoll-Rand Company ("IR") for the purpose of
filing the Underwriting Agreement, dated as of March 17, 1998, among IR,
Ingersoll-Rand Financing I and the underwriter named therein.
Item 7. Financial Statements, Pro Forma Financial
Information and Exhibits .
The following exhibits are filed herewith:
1. Underwriting Agreement, dated as of March 17, 1997, among
Ingersoll-Rand Company, Ingersoll-Rand Financing I and the
underwriter named therein.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
INGERSOLL-RAND COMPANY
Date: March 25, 1998 By: /s/ Ronald G. Heller
__________________________
Assistant General Counsel
and Secretary
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description Page
- -------- ----------- ----
1. Underwriting Agreement, dated as of March 17, 1998,
among Ingersoll-Rand Company, Ingersoll-Rand Financing I
and the underwriter named therein.
