SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
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CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
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Date of Report (date of earliest event reported): May 18, 1995
VIACOM INC.
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(Exact name of registrant as specified in its charter)
Delaware 1-9553 04-2949533
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
1515 Broadway, New York, New York 10036
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(212) 258-6000
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Item 5. Other Events.
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On May 18, 1995, Viacom Inc. ("Viacom") and Viacom International Inc.
("Viacom International", and together with Viacom, the "Registrants") entered
into an underwriting agreement (the "Underwriting Agreement", a copy of which is
attached hereto as Exhibit 1.1) with Bear, Stearns & Co. Inc. (the
"Underwriter"), including the Viacom Inc./Viacom International Inc. Underwriting
Agreement Senior Debt Securities Standard Provisions (Offered Securities) dated
May 18, 1995, a copy of which is attached hereto as Exhibit 1.2.
On May 25, 1995, pursuant to the Underwriting Agreement, Viacom issued and
sold and the Underwriter purchased $1 billion aggregate principal amount of
Viacom's 7.75% Senior Notes due 2005, unconditionally guaranteed as to payment
of principal and interest by Viacom International (the "Notes"), at an initial
public offering price of 99.04% of the principal amount of the Notes, which
yielded proceeds to Viacom of $979.9 million.
A form of the Note, including the guarantee endorsed thereon, is
attached hereto as Exhibit 4.1. The Notes were (i) registered under the
Securities Act of 1933, as amended, pursuant to a Registration Statement on Form
S-3 (Reg. No. 33-53485) and (ii) issued under an Indenture, dated as of May 15,
1995, between Viacom, Viacom International, as guarantor, and The First National
Bank of Boston, trustee, as supplemented by the First Supplemental Indenture
thereto dated as of May 24, 1995. Copies of the Indenture and the First
Supplemental Indenture are attached hereto as Exhibits 4.2 and 4.3,
respectively.
Item 7. Financial Statements and Exhibits.
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(c) The following exhibits are filed as part of this on Form 8-K:
1.1 Underwriting Agreement, dated May 18, 1995, among Viacom Inc.,
Viacom International Inc. and Bear, Stearns & Co. Inc.
1.2 Viacom Inc./Viacom International Inc. Underwriting Agreement
Senior Debt Securities Standard Provisions (Offered Securities)
dated May 18, 1995.
4.1 Form of 7.75% Senior Note due 2005, including the form of
guarantee endorsed thereon (incorporated by reference to
Exhibit 3 to Viacom Inc.'s Registration Statement on Form 8-A
(Reg. No. 1-9553)).
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4.2 Indenture dated as of May 10, 1995 among Viacom Inc., Viacom
International Inc., as guarantor, and The First National Bank of
Boston, trustee (incorporated by reference to Exhibit 1 to
Viacom Inc.'s Registration Statement on Form 8-A
(Reg. No. 1-9553)).
4.3 First Supplemental Indenture, dated as of May 24, 1995, among
Viacom Inc., Viacom International Inc., as guarantor, and The
First National Bank of Boston, trustee (incorporated by reference
to Exhibit 2 to Viacom Inc.'s Registration Statement on Form 8-A
(Reg. No. 1-9553)).
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SIGNATURE
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 hereunto duly authorized.
VIACOM INC.
Date: May 25, 1995 By: /s/ Philippe P. Dauman
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Name: Philippe P. Dauman
Title: Executive Vice President,
General Counsel and Chief
Administrative Officer
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EXHIBIT INDEX
Exhibit No. Description
1.1 Underwriting Agreement, dated May 18, 1995, among Viacom Inc.,
Viacom International Inc. and Bear, Stearns & Co. Inc.
1.2 Viacom Inc./Viacom International Inc. Underwriting Agreement
Senior Debt Securities Standard Provisions (Offered Securities)
dated May 18, 1995.
4.1 Form of 7.75% Senior Note due 2005, including the form of
guarantee endorsed thereon (incorporated by reference to
Exhibit 3 to Viacom Inc.'s Registration Statement on
Form 8-A (Reg. No. 1-9553)).
4.2 Indenture dated as of May 10, 1995 among Viacom Inc., Viacom
International Inc., as guarantor, and The First National Bank of
Boston, trustee (incorporated by reference to Exhibit 1 to Viacom
Inc.'s Registration Statement on Form 8-A (Reg. No. 1-9553)).
4.3 First Supplemental Indenture, dated as of May 24, 1995, among
Viacom Inc., Viacom International Inc., as guarantor, and The
First National Bank of Boston, trustee (incorporated by reference
to Exhibit 2 to Viacom Inc.'s Registration Statement on Form 8-A
(Reg. No. 1-9553)).
UNDERWRITING AGREEMENT
May 18, 1995
VIACOM INC.
VIACOM INTERNATIONAL INC.
c/o Viacom Inc.
1515 Broadway
New York, New York 10036
Dear Sirs:
We understand that Viacom Inc. (the "Company") proposes
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to issue and sell $1,000,000,000 aggregate principal amount of
7.75% Senior Notes due 2005, guaranteed by Viacom International
Inc. (the "Guarantor") (the "Debt Securities"). The Debt
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Securities are also hereinafter referred to as the "Offered Securities".
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All references herein, and in the document entitled
Viacom Inc. Underwriting Agreement Senior Debt Securities
Standard Provisions (Offered Securities) described in the
penultimate paragraph hereof, to the Debt Securities or the
Offered Securities include the guarantees of the Guarantor
described above in this paragraph whenever the context permits.
Subject to the terms and conditions set forth or
incorporated by reference herein, the Company hereby agrees to
sell, and Bear, Stearns & Co. Inc. (the "Underwriter") agrees to
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purchase, $1,000,000,000 aggregate principal amount of Offered
Securities at a purchase price of 97.99% of the principal amount
of Debt Securities, plus accrued interest, if any, from May 25,
1995, to the date of payment and delivery.
The Underwriter will pay for the Offered Securities upon
delivery thereof at the Company's offices at 10:00 a.m. (New York
time) on May 25, 1995, or at such other time, not later than 5:00
p.m. (New York time) on May 26, 1995, as shall be designated by
the Underwriter. The time and date of such payment and delivery
are hereinafter referred to as the Closing Date.
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The Offered Securities shall have the terms set forth in
the Prospectus dated May 10, 1995, and the Prospectus Supplement
dated May 18, 1995, including the following:
Terms of Debt Securities:
Maturity Date: June 1, 2005
Interest Rate: 7.75%
Redemption Provisions: None
Interest Payment Dates: June 1 and December 1, commencing
December 1, 1995
(Interest accrues from May 25, 1995)
Ranking: The Debt Securities will be senior indebtedness
of the Company issued under the Indenture dated as
of May 15, 1995 among the Company, Viacom International
Inc., as guarantor, and The First National Bank of
Boston, trustee, as supplemented by the First
Supplemental Indenture thereto.
Form: The Offered Securities will be issued in the
form of one or more fully Registered Global
Securities which will be deposited with, or on
behalf of, The Depository Trust Company (the
"Depository") and registered in the name of
Cede & Co., the Depository's nominee.
Other Terms: Payment for the Offered Securities will be
made in immediately available funds.
All provisions contained in the document entitled Viacom
Inc. Underwriting Agreement Senior Debt Securities Standard
Provisions (Offered Securities) dated May 18, 1995, a copy of
which is attached hereto, are herein incorporated by reference in
their entirety and shall be deemed to be a part of this Agreement
to the same extent as if such provisions had been set forth in
full herein, except to the extent a provision in such document is
inconsistent herewith the provision herein shall control and
except that if any term defined in such document is otherwise
defined herein, the definition set forth herein shall control.
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Please confirm your agreement by having an authorized
officer sign a copy of this Agreement in the space set forth
below. This Agreement may be signed in any number of counterparts
with the same effect as if the signatures thereto and hereto were
upon the same instrument.
Very truly yours,
Bear, Stearns & Co. Inc.
By: /s/ Lewis A. Sachs
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Name: Lewis A. Sachs
Title: Senior Managing Director
Accepted:
VIACOM INC. VIACOM INTERNATIONAL INC.
By: /s/ Vaughn A. Clarke By: /s/ Vaughn A. Clarke
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Name: Vaughn A. Clarke Name: Vaughn A. Clarke
Title: Senior Vice President, Title: Senior Vice President,
Treasurer Treasurer
VIACOM INC.
VIACOM INTERNATIONAL INC.
UNDERWRITING AGREEMENT
SENIOR DEBT SECURITIES
STANDARD PROVISIONS
(OFFERED SECURITIES)
May 18, 1995
From time to time, Viacom Inc., a Delaware corporation (the
"Company"), and Viacom International Inc., a Delaware corporation (the
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"Guarantor"), may enter into one or more underwriting agreements that provide
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for the sale of designated senior debt securities (the "Senior Debt Securities")
to the several underwriters named therein. The standard provisions set forth
herein will be incorporated by reference in any such underwriting agreement (an
"Underwriting Agreement"). The Underwriting Agreement, including the provisions
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incorporated therein by reference, is herein referred to as this Agreement.
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Capitalized terms used but not defined herein shall have the meaning ascribed
thereto in the applicable Underwriting Agreement.
The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement (File No. 33-53485),
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including a prospectus, relating to the Offered Securities, and has filed with,
or transmitted for filing to, or shall promptly hereafter file with or transmit
for filing to, the Commission a prospectus supplement (the "Prospectus
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Supplement") specifically relating to the Offered Securities pursuant to Rule
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424 under the Securities Act of 1933, as amended (the "Securities Act"). The
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term Registration Statement means the registration statement as amended to the
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date of this Agreement. The term Base Prospectus means the prospectus included
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in the Registration Statement. The term Prospectus means the Base Prospectus
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together with the Prospectus Supplement. The term preliminary prospectus means a
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preliminary prospectus supplement specifically relating to the Offered
Securities together with the Base Prospectus. As used herein, the terms
"Registration Statement," "Base Prospectus," "Prospectus" and "preliminary
prospectus" shall include in each case the documents, if any, incorporated by
reference therein. The terms "supplement," "amendment" and "amend" as used
herein shall include all documents deemed to be incorporated by reference in the
Prospectus that are filed subsequent to the date of the Base Prospectus by the
Company or the Guarantor with the Commission pursuant to the Securities Exchange
Act of 1934, as amended (the "Exchange Act").
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2
1. Representations and Warranties. The Company represents and warrants to
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each of the Underwriters that:
(a) No stop order suspending the effectiveness of the
Registration Statement is in effect, and no proceedings for such
purpose are pending before or, to the Company's knowledge, are
threatened by the Commission.
(b) The Company and the Guarantor each has been duly
incorporated, is validly existing as a corporation in good standing
under the laws of Delaware, and has the corporate power and authority
to own its property and to conduct its business as described in the
Prospectus and is duly qualified to transact business as a foreign
corporation in good standing in each other jurisdiction in which it
owns or leases property of a nature, or transacts business of a type,
that would make such qualification necessary, except to the extent that
the failure to so qualify or be in good standing would not have a
material adverse effect on the Company and its subsidiaries, taken as a
whole.
(c) Each of the Company's significant subsidiaries, as such
term is defined in Rule 1-02(v) of Regulation S-X under the Securities
Act of 1933, as amended, has been duly incorporated, is validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization, and has the corporate power and
authority to own its properties and conduct its business as presently
owned or conducted and is duly qualified to transact business as a
foreign corporation in good standing in each other jurisdiction in
which it owns or leases property of a nature, or transacts business of
a type, that would make such qualification necessary, except to the
extent that the failure to so qualify or be in good standing would not
have a material adverse effect on the Company and its subsidiaries,
taken as a whole.
(d) All the outstanding shares of capital stock of the
Guarantor have been duly authorized and validly issued, are fully paid
and nonassessable, and are wholly owned by the Company, free and clear
of any lien, adverse claim, security interest, equity or other
encumbrance, except as described in the Prospectus and except for such
liens, adverse claims, security interests or equity or other
encumbrances that are in the aggregate immaterial to the Company and
its subsidiaries taken as a whole.
(e) The Indenture dated as of May 15, 1995 among the Company,
the Guarantor and The First National Bank of Boston, as trustee (the
"Trustee"), as supplemented by the First Supplemental Indenture dated
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as of May 24, 1995, relating to the Senior Debt Securities (as so
supplemented the "Indenture") has been duly qualified under the Trust
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Indenture Act of 1939, as amended (the "TIA"), has been duly
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authorized, executed and delivered by the Company and the Guarantor
and, assuming the due authorization, execution and delivery by the
Trustee, is a valid and binding agreement of the Company and the
Guarantor, enforceable in accordance with its terms
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except as (i) the enforceability thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or similar laws
affecting creditors' rights generally and (ii) rights of acceleration
and the availability of equitable remedies may be limited by equitable
principles of general applicability (regardless of whether considered
in a proceeding in equity or at law). The Company has filed an
application for the purposes of determining the eligibility of the
Trustee under the Indenture to act under subsection (a) of Section 310
of the TIA in accordance with the rules and regulations prescribed by
the Commission under Section 305(b)(2) of the TIA (the "Trustee
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Application"), and the Company has been informed by the Commission that
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the Commission has declared the Trustee Application effective.
(f)(1) The Senior Debt Securities have been duly authorized by
the Company and the guarantees (the "Guarantees") endorsed on such
Senior Debt Securities have been duly authorized by the Guarantor and,
when executed and authenticated in accordance with the provisions of
the Indenture and delivered to and paid for by the Underwriters in
accordance with the terms of the Underwriting Agreement, the Senior
Debt Securities and the Guarantees will be entitled to the benefits of
the Indenture, and will be valid and legally binding obligations of the
Company and the Guarantor, respectively, in each case enforceable in
accordance with their respective terms except as (i) the enforceability
thereof may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting creditors' rights generally and
(ii) rights of acceleration, if any, and the availability of equitable
remedies may be limited by equitable principles of general
applicability (regardless of whether considered in a proceeding in
equity or at law).
(f)(2) The Offered Securities conform as to legal matters to
the descriptions thereof contained in the Prospectus.
(g) This Agreement has been duly authorized, executed and
delivered by the Company and the Guarantor.
(h) The execution and delivery by the Company and the
Guarantor of, and the performance by the Company and the Guarantor of
their respective obligations under, this Agreement, the Indenture and
the Offered Securities will not contravene any provision of applicable
law or the certificate of incorporation or by-laws of the Company or
the Guarantor or any material agreement or other instrument to which
the Company or the Guarantor is a party or known to the Company to be
binding upon the Company or the Guarantor or any judgment, order or
decree of any governmental body, agency or court having jurisdiction
over the Company or the Guarantor, except, in any such case, for such
contraventions as would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole.
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(i) Each document, if any, filed or to be filed pursuant to
the Exchange Act and incorporated by reference in the Prospectus
complied or will comply when so filed in all material respects with the
Exchange Act and the applicable rules and regulations of the Commission
thereunder, (ii) each part of the Registration Statement, when such
part became effective, did not contain and each such part, as amended
or supplemented, if applicable, will not contain, any untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading, (iii) the Registration Statement and the Prospectus comply
and, as amended or supplemented, if applicable, will comply in all
material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder and (iv) the Prospectus does
not contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, except
that the representations and warranties set forth in this paragraph (i)
do not apply to statements or omissions in the Registration Statement
or the Prospectus or supplement or amendment thereto based upon
information concerning any Underwriter furnished to the Company in
writing by such Underwriter through the Manager expressly for use
therein.
(j) There is no action, suit or proceeding pending or, to the
Company's knowledge, threatened in writing, before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any of its subsidiaries of a character required to be
disclosed in the Registration Statement which is not so disclosed.
(k) The Offered Securities have been approved for listing,
upon official notice of issuance, on the American Stock Exchange.
(l) The Company and each of its subsidiaries have complied in
all material respects with all provisions of Section 517.075, Florida
Statutes (Chapter 92-198, Laws of Florida).
2. Public Offering. The Company is advised by the Manager that
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the Underwriters propose to make a public offering of their respective portions
of the Offered Securities as soon after this Agreement has been entered into as
in the Manager's judgment is advisable. The terms of the public offering of the
Offered Securities are set forth in the Prospectus.
3. Purchase and Delivery. Payment for the Offered Securities
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shall be made by certified or official bank check or checks payable to the order
of the Company in New York Clearing House funds at the time and place set forth
in the Underwriting Agreement, upon delivery to the Manager for the respective
accounts of the several Underwriters of certificates in definitive form for the
Offered Securities, registered in such names and in such denominations as the
Manager shall request in writing not less than two full business days prior to
the date of
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5
delivery, with any transfer taxes payable in connection with the issuance and
delivery of the Offered Securities to the Underwriters duly paid.
4. Conditions to Closing. The several obligations of
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the Underwriters hereunder are subject to the following conditions:
(a) (i) There shall not have occurred any change in the
financial condition, earnings, business or operations of the Company
and its subsidiaries, taken as a whole, from that set forth in the
Prospectus, that, in the reasonable judgment of the Manager, is
material and adverse and that makes it, in the good faith judgment of
the Manager, impracticable to market the Offered Securities on the
terms and in the manner contemplated in the Prospectus; and
(ii) The representations and warranties of the
Company contained in this Agreement shall be true and correct as of the
Closing Date and the Company and the Guarantor shall have complied in
all material respects with all of the agreements and satisfied in all
material respects all of the conditions on its part to be performed or
satisfied on or before the Closing Date, and the Manager shall have
received a certificate, dated the Closing Date and signed by executive
officers of the Company, to that effect.
(b) The Manager shall have received on the Closing Date (i) an
opinion of the General Counsel or special securities counsel of the
Company, in form and substance reasonably satisfactory to the Manager,
(ii) an opinion of outside counsel to the Company, in form and
substance reasonably satisfactory to the Manager and (iii) an opinion
of outside counsel to the Manager, in form and substance satisfactory
to the Manager, with respect to such matters as the Manager may
reasonably request, in each case dated the Closing Date.
(c) The Manager shall have received on the date of this
Agreement and on the Closing Date a letter or letters, dated such date,
from the Company's independent auditors (and, if appropriate in order
to provide the following statements and information, from other
independent public accountants), containing statements and information
of the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain
financial information contained in or incorporated by reference into
the Registration Statement and the Prospectus.
(d) The Trustee Application shall have become effective.
5. Covenants of the Company and the Guarantor. In further
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consideration of the agreements of the Underwriters contained herein, the
Company and the Guarantor, jointly and severally, covenant as follows:
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(a) To furnish the Manager, without charge, a signed copy of
the Registration Statement (including exhibits and all amendments
thereto but excluding documents incorporated by reference therein) and
for delivery to each other Underwriter a conformed copy of the
Registration Statement (without any exhibits and documents incorporated
therein by reference) and, during the period mentioned in paragraph (c)
below, as many copies of the Prospectus, any supplements and amendments
thereto or to the Registration Statement as the Manager may reasonably
request.
(b) To furnish to the Manager a copy of each amendment (except
any amendment incorporated by reference) or supplement to the
Registration Statement or the Prospectus immediately prior to the time
of the filing thereof and with respect to amendments or supplements
directly relating to the Offered Securities, including those pursuant
to paragraph (c) of this Section 5, (other than amendments effected by
incorporation by reference) to furnish and to afford, during the time
when the Prospectus is required by the Securities Act to be delivered
in connection with sales of the Offered Securities, or 120 days,
whichever is lesser, to the Manager an opportunity to comment on such
amendment or supplement prior to filing; provided, however, that the
Manager must act promptly and not unreasonably delay such filing.
(c) If, during such period after the first date of the public
offering of the Offered Securities as in the reasonable opinion of
counsel for the Underwriters the Prospectus is required by law to be
delivered in connection with sales by an Underwriter or dealer, any
event shall occur as a result of which it is necessary to amend or
supplement the Prospectus in order to make the statements therein, in
the light of the circumstances existing when the Prospectus is
delivered to a purchaser, not misleading, or if it is necessary to
amend or supplement the Prospectus to comply with law, the Company will
forthwith notify the Manager thereof and prepare, file with the
Commission and furnish, at its own expense, to the Underwriters either
amendments or supplements to the Prospectus, so that the statements in
the Prospectus as so amended or supplemented will not, in the light of
the circumstances existing when the Prospectus is delivered to a
purchaser, be misleading or so that the Prospectus, as so amended or
supplemented, will comply with law; provided, however, that any costs
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incurred by the Company pursuant to this paragraph (c) or paragraph (a)
of this Section 5 after three months from the date of the applicable
Underwriting Agreement shall be at the expense of the Underwriters and
shall be reimbursed by the Manager as incurred by the Company.
(d) To cooperate with the Manager and counsel for the
Underwriters to qualify the Offered Securities for offer and sale under
the securities or Blue Sky laws of such jurisdictions as the Manager
shall reasonably request and to maintain such qualifications for one
year after the date of the Underwriting Agreement and to pay all
expenses (including filing fees and the reasonable fees and
disbursements of counsel), against receipt of detailed invoice
therefor, in connection with such qualification.
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(e) To make generally available to the Company's security
holders and to the Manager as soon as practicable an earnings statement
that satisfies the provisions of Section 11(a) of the Securities Act
and the rules and regulations of the Commission thereunder covering a
twelve-month period beginning on the first day of the Company's first
full fiscal quarter next following the date of the Underwriting
Agreement.
(f) During the period beginning on the date of the
Underwriting Agreement and continuing to and including the Closing
Date, not to offer, sell or contract to sell any securities of the
Company substantially similar to the Offered Securities (other than (i)
the Offered Securities, (ii) commercial paper issued in the ordinary
course of business, (iii) pursuant to stock option plans and other
similar employee benefit programs or (iv) pursuant to the terms of
securities outstanding or contracts existing on the date of the
Underwriting Agreement), without the prior written consent of the
Manager, which consent will not be unreasonably withheld.
(g) To advise you, promptly after it shall receive notice or
obtain knowledge thereof, of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement, of
the suspension of the qualification of the Offered Securities for
offering or sale in any jurisdiction, or of the initiation or
threatening of any proceeding for any such purpose, and it will
promptly use its reasonable efforts to prevent the issuance of any stop
order or to obtain its withdrawal if such a stop order should be
issued.
(h) To use its reasonable efforts to have the Offered
Securities listed, subject to notice of issuance, on the American Stock
Exchange prior to or concurrently with the Closing Date.
6. Indemnification and Contribution. The Company agrees to
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indemnify and hold harmless each Underwriter and each person, if any, who
controls such Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act from and against any and all
losses, claims, damages and liabilities (collectively, "Losses") caused by any
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untrue statement or allegedly untrue statement of a material fact contained in
the Registration Statement or in any amendment thereto as to which such Losses
relate, or in any preliminary prospectus or the Prospectus (or in any amendment
thereof or supplement thereto as to which such Losses relate, if the Company
shall have furnished any amendments thereof or supplements thereto), or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading;
provided, however, that this indemnity does not apply to any Losses to the
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extent arising out of any untrue statement or omission or allegedly untrue
statement or omission based upon information furnished to the Company in writing
by any Underwriter through the Manager expressly for use in the Registration
Statement (or any amendment thereto), or in any
<PAGE>
8
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto); provided further, that the foregoing indemnity with respect to any
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preliminary prospectus shall not inure to the benefit of any Underwriter from
whom the person asserting any such Losses purchased Offered Securities, or any
person controlling such Underwriter, if a copy of the Prospectus (as then
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such Underwriter
to such person, if required by law so to have been delivered, at or prior to the
written confirmation of the sale of the Offered Securities to such person, and
if the Prospectus (as so amended or supplemented) would have cured the defect
giving rise to such Losses; provided further, that the foregoing indemnity
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contained in this paragraph with respect to the Prospectus shall not inure to
the benefit of such Underwriter, or to the benefit of any person who controls
such Underwriter, in respect of any Losses asserted by a person who purchased
Offered Securities from such Underwriter and arising out of or based upon an
untrue statement or omission or alleged untrue statement or omission in the
Prospectus, if such untrue statement or omission or alleged untrue statement or
omission is corrected in an amendment or supplement to the Prospectus and if,
having previously been furnished by or on behalf of the Company with copies of
the Prospectus as so amended or supplemented, such Underwriter thereafter fails
to deliver or cause to be delivered such Prospectus as amended or supplemented
prior to or concurrently with the sale of Offered Securities to the person
asserting such Losses.
Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement and each person, if any, who controls the Company
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act to the same extent as the foregoing indemnity from the Company
to each Underwriter, but only to the extent arising out of information furnished
to the Company by such Underwriter in writing through the Manager expressly for
use in the Registration Statement, any preliminary prospectus, the Prospectus or
any amendments or supplements thereto.
In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to either of the two preceding paragraphs, such
person (the "indemnified party") shall promptly notify the person against whom
such indemnity may be sought (the "indemnifying party") in writing and the
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indemnifying party, upon request of the indemnified party, shall retain counsel
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reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same
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9
counsel would be inappropriate due to actual or potential differing interests
between them. It is understood that the indemnifying party shall not, in respect
of the reasonable attorneys' fees and expenses in connection with any proceeding
or related proceedings in the same jurisdiction, be liable for the reasonable
fees and expenses of more than one separate firm (in addition to one local
counsel in each jurisdiction for all proceedings or related proceedings;
provided, however, that the parties agree to use their reasonable best efforts
to limit, to the extent possible the number of local counsel, if any) for all
such indemnified parties and that all such reasonable fees and expenses shall be
reimbursed as they are incurred. Such firm or local counsel shall be designated
in writing by the Manager, in the case of parties indemnified pursuant to the
second preceding paragraph, and by the Company, in the case of parties
indemnified pursuant to the first preceding paragraph. The indemnifying party
shall not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified party is a party and
indemnity could have been sought hereunder by such indemnified party, unless
such settlement includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such proceeding.
If the indemnification provided for in the first or second
paragraph in this Section 6 is unavailable to an indemnified party in respect of
any Losses referred to therein, then each indemnifying party under such
paragraph, in lieu of indemnifying such indemnified party thereunder, shall
contribute to the amount paid or payable by such indemnified party as a result
of such Losses (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Underwriters from the offering of the
Offered Securities or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company and of the Underwriters in connection with the statements
or omissions that resulted in such Losses, as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Underwriters in connection with the offering of the Offered Securities shall be
deemed to be in the same respective proportions as the net proceeds from the
offering of such Offered Securities (before deducting expenses) received by the
Company and the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover of the
Prospectus Supplement, bear to the aggregate public offering price of the
Offered Securities. The relative fault of the Company and of the Underwriters
shall be determined by reference to, among other things, whether the untrue or
allegedly untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
or by the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
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10
The Company and the Underwriters agree that it would not be
just or equitable if contribution pursuant to this Section 6 were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation that does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the Losses
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 6, no Underwriter shall be required to contribute any amount in excess
of the amount by which the total price at which the Offered Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that such Underwriter has otherwise been
required to pay by reason of such untrue or allegedly untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' respective obligations to contribute
pursuant to this Section 6 are several in proportion to the respective principal
amounts of Offered Securities purchased by each of such Underwriters and not
joint.
The indemnity and contribution provisions contained in this
Section 6 and the representations and warranties and covenants of the Company
and/or the Guarantor contained herein shall remain operative and in full force
and effect regardless of (i) any investigation made by or on behalf of any
Underwriter or any person controlling any Underwriter or by or on behalf of the
Company, its directors or officers or any person controlling the Company and
(ii) acceptance of and payment for any of the Offered Securities.
7. Termination. This Agreement shall be subject to termination
-----------
in the Manager's absolute discretion, by notice given to the Company, if (a)
after the execution and delivery of the Underwriting Agreement and prior to the
Closing Date (i) trading generally shall have been suspended or materially
limited on or by, as the case may be, the American Stock Exchange, (ii) trading
of any securities of the Company (excluding the Contingent Value Rights, the
Variable Common Rights and the Warrants of the Company) shall have been
suspended on the American Stock Exchange for a consecutive period of more than
three hours, (iii) a general moratorium on commercial banking activities in New
York shall have been declared by either Federal or New York State authorities,
or (iv) there shall have occurred any outbreak or escalation of hostilities or
any change in financial markets or any calamity or crisis that, in the good
faith judgment of the Manager, is material and adverse and (b) in the case of
any of the events specified in clauses (a)(i) through (iv), such event, singly
or together with any other such event, makes it, in the good faith judgment of
the Manager, impracticable to market the Offered Securities on the terms and in
the manner contemplated in the Prospectus.
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11
8. Defaulting Underwriters. If on the Closing Date any one or
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more of the Underwriters shall fail or refuse to purchase Offered Securities
that it has or they have agreed to purchase on such date, and the aggregate
amount of Offered Securities which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate amount of the Offered Securities to be purchased on such date, the
other Underwriters shall be obligated severally in the proportions that the
amount of Offered Securities set forth opposite their respective names above
bears to the aggregate amount of Offered Securities set forth opposite the names
of all such non-defaulting Underwriters, or in such other proportions as the
Manager may specify, to purchase the Offered Securities which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase on such
date; provided that in no event shall the amount of Offered Securities that any
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Underwriter has agreed to purchase pursuant to this Agreement be increased
pursuant to this Section 10 by an amount in excess of one-ninth of such amount
of Offered Securities without the written consent of such Underwriter. If on the
Closing Date any Underwriter or Underwriters shall fail or refuse to purchase
Offered Securities and the aggregate amount of Offered Securities with respect
to which such default occurs is more than one-tenth of the aggregate amount of
Offered Securities to be purchased on such date, and arrangements satisfactory
to the Manager and the Company for the purchase of such Offered Securities are
not made within 36 hours after such default, this Agreement shall terminate
without liability on the part of any non-defaulting Underwriter or the Company.
In any such case either the Manager or the Company shall have the right to
postpone the Closing Date but in no event for longer then seven days, in order
that the required changes, if any, in the Registration Statement and in the
Prospectus or in any other documents or arrangements may be effected. Any action
taken under this paragraph shall not relieve any defaulting Underwriter from
liability in respect of any default of such Underwriter under this Agreement.
If this Agreement shall be terminated by the Manager because
of any failure by the Company or the Guarantor to comply in all material
respects with the terms or to fulfill any of the material conditions of this
Agreement, or if the sale of the Offered Securities provided for herein is not
consummated on the Closing Date because any condition to the obligations of the
Underwriters set forth in Section 4 hereof is not satisfied, then the Company
will reimburse the Underwriters, severally, upon demand for all out-of-pocket
expenses (including the fees and disbursements of their counsel) reasonably
incurred by such Underwriters in connection with this Agreement or the offering
contemplated hereunder against receipt of a detailed invoice therefor.
Termination pursuant to Section 7 hereof shall not require reimbursement
pursuant to this paragraph.
9. Miscellaneous. The Underwriting Agreement may be
-------------
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument.
This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
<PAGE>
12
10. Headings. The headings of the sections of this
--------
Agreement have been inserted for convenience of reference only and shall
not be deemed a part of this Agreement.
