Exhibit 1.1
Execution Version
VALERO ENERGY CORPORATION
DEBT SECURITIES
Underwriting Agreement
June 5, 2007
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To the
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Representatives named in |
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Schedules I-A and I-B hereto |
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of the Underwriters named in |
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Schedule II hereto |
Ladies
and Gentlemen:
Valero Energy Corporation, a Delaware
corporation (the “ Company ”), proposes to issue
and sell to the underwriters named in Schedule II hereto (the
“ Underwriters ”), for whom you are acting as
representatives (the “ Representatives ”), the
principal amount of its debt securities identified in Schedules I-A
and I-B hereto (the “ Securities ”), to be
issued under the indenture specified in Schedules I-A and I-B
hereto (the “ Indenture ”) between the Company
and the Trustee identified in such Schedule (the “
Trustee ”). If the firm or firms listed in
Schedule II hereto include only the firm or firms listed in
Schedules I-A and I-B hereto, then the terms
“Underwriters” and “Representatives,” as
used herein, shall each be deemed to refer to such firm or
firms.
The Company has prepared and filed
with the Securities and Exchange Commission (the “
Commission ”) in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations
of the Commission thereunder (collectively, the “
Securities Act ”), a registration statement (the file
number of which is set forth in Schedules I-A and I-B hereto) on
Form S-3, including a prospectus (the “ Basic
Prospectus ”) relating to certain debt securities to be
issued from time to time by the Company. The Company also has filed
with, or proposes to file with, the Commission pursuant to
Rule 424 under the Securities Act a prospectus supplement
specifically relating to the Securities (the “ Prospectus
Supplement ”). The registration statement, as amended to
the date of this Agreement, including the information, if any,
deemed pursuant to Rule 430B under the Securities Act to be
part of the registration statement at the time of its effectiveness
(the “ Rule 430 Information ”), is
hereinafter referred to as the “ Registration
Statement ”; and as used herein, the term “
Prospectus ” means the Basic Prospectus as
supplemented by the prospectus supplement specifically relating to
the Securities in the form first used
(or made
available upon request of purchasers pursuant to Rule 173
under the Securities Act) in connection with the confirmation of
sales of the Securities and the term “ Preliminary
Prospectus ” means the preliminary prospectus supplement
specifically relating to the Securities together with the Basic
Prospectus. If the Company has filed an abbreviated registration
statement pursuant to Rule 462(b) under the Securities Act (the
“ Rule 462 Registration Statement ”), then
any reference herein to the term “Registration
Statement” shall be deemed to include such Rule 462
Registration Statement. References herein to the Registration
Statement, the Basic Prospectus, any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form
S-3 under the Securities Act which were filed on or before the date
of this Agreement or the issue date of the Basic Prospectus, any
Preliminary Prospectus or the Prospectus, as the case may be. The
terms “ supplement ,” “ amendment
,” and “ amend ” as used herein with
respect to the Registration Statement, any Preliminary Prospectus
or the Prospectus shall be deemed to refer to and include any
documents filed by the Company under the Securities Exchange Act of
1934, as amended, and the rules and regulations of the Commission
thereunder (collectively, the “ Exchange Act ”)
after the date of this Agreement or the issue date of the Basic
Prospectus, any Preliminary Prospectus or the Prospectus, as the
case may be, which are deemed to be incorporated by reference
therein. “ Effective Date ” shall mean each date
and time that the Registration Statement and any post-effective
amendment or amendments thereto and any Rule 462(b) Registration
Statement became or becomes effective.
At or prior to the time when sales of
the Securities will be first made (the “ Time of Sale
”), the Company has prepared the following information
(collectively, the “ Time of Sale Information
”): a Preliminary Prospectus dated June 5, 2007
(including the documents incorporated by reference therein as of
the Time of Sale), and the information identified in
Schedule III hereto.
The Company hereby agrees with the
Underwriters as follows:
1. The Company agrees to issue
and sell the Securities to the several Underwriters as hereinafter
provided, and each Underwriter, on the basis of the representations
and warranties herein contained, but subject to the conditions
hereinafter stated, agrees to purchase, severally and not jointly,
from the Company the respective principal amount of Securities set
forth opposite such Underwriter’s name in Schedule II
hereto at the purchase price set forth in Schedules I-A and I-B
hereto plus accrued interest, if any, from the date specified in
Schedules I-A and I-B hereto to the date of payment and
delivery.
2. (a) The Company understands
that the several Underwriters intend (i) to make a public
offering of their respective portions of the Securities and
(ii) initially to offer the Securities upon the terms set
forth in the Time of Sale Information and the Prospectus.
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(b) The Company acknowledges and
agrees that the Underwriters are acting solely in the capacity of
an arm’s length contractual counterparty to the Company with
respect to any offering of Securities contemplated hereby
(including in connection with determining the terms of the
offering) and not as a financial advisor or a fiduciary to, or an
agent of, the Company or any other person. Additionally, no such
Underwriter is advising the Company or any other person as to any
legal, tax, investment, accounting or regulatory matters in any
jurisdiction. The Company shall consult with its own advisors
concerning such matters and shall be responsible for making its own
independent investigation and appraisal of the transactions
contemplated hereby, and such Underwriters shall have no
responsibility or liability to the Company with respect thereto.
Any review by such Underwriters of the Company, the transactions
contemplated hereby or other matters relating to such transactions
will be performed solely for the benefit of the Underwriters and
shall not be on behalf of the Company. The Company agrees that it
will not claim that the Underwriters have rendered advisory
services of any nature or respect, or owe an agency, fiduciary or
similar duty to the Company, in connection with such transaction or
the process leading thereto.
3. Payment for the Securities
shall be made by wire transfer in immediately available funds to
the account specified by the Company to the Representatives, no
later than noon the Business Day (as defined below) prior to the
Closing Date (as defined below), on the date and at the time and
place set forth in Schedules I-A and I-B hereto (or at such other
time and place on the same or such other date, not later than the
fifth Business Day (as defined below) thereafter, as you and the
Company may agree in writing). As used herein, the term “
Business Day ” means any day other than a day on which
banks are permitted or required to be closed in New York City. The
time and date of such payment and delivery with respect to the
Securities are referred to herein as the “ Closing
Date .”
Payment for the Securities shall be
made against delivery to the nominee of The Depository Trust
Company for the respective accounts of the several Underwriters of
the Securities of one or more global notes (the “ Global
Note ”) representing the Securities, with any transfer
taxes payable in connection with the transfer to the Underwriters
of the Securities duly paid by the Company. The Global Note will be
made available for inspection by the Representatives at such place
as the Representatives and the Company shall agree not later than
1:00 P.M., New York City time, on the Business Day prior to the
Closing Date.
4. The Company represents and
warrants to and agrees with each of the Underwriters that:
(a) The Registration Statement has
become effective under the Securities Act. No order suspending the
effectiveness of the Registration Statement has been issued by the
Commission and no proceeding for that purpose or pursuant to
Section 8A of the Securities Act against the
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Company or
related to the offering has been initiated or threatened by the
Commission; as of the Effective Date, the Registration Statement
complied in all material respects with the Securities Act and the
Trust Indenture Act of 1939, as amended, and the rules and
regulations of the Commission thereunder (collectively, the “
Trust Indenture Act ”), and did 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
required to be stated therein or necessary in order to make the
statements therein not misleading; and as of the date of the
Prospectus and any amendment or supplement thereto and as of the
Closing Date, the Prospectus did 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 required to be
stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading; provided that the Company makes no
representation and warranty with respect to (i) that part of
the Registration Statement that constitutes the Statement of
Eligibility and Qualification (Form T-1) of the Trustee under the
Trust Indenture Act or (ii) any statements or omissions in the
Registration Statement and the Prospectus and any amendment or
supplement thereto made in reliance upon and in conformity with
information relating to any Underwriter furnished to the Company in
writing by such Underwriter through the Representatives expressly
for use therein.
(b) The Time of Sale Information at
the Time of Sale and at the Closing Date did not and will not
contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; provided that the Company makes no
representation and warranty with respect to any statements or
omissions made in reliance upon and in conformity with information
relating to any Underwriter furnished to the Company in writing by
such Underwriter through the Representatives expressly for use in
such Time of Sale Information.
(c) The Company (including its agents
and representatives, other than the Underwriters in their capacity
as such) has not prepared, made, used, authorized, approved or
referred to and will not prepare, make, use, authorize, approve or
refer to any “ issuer free writing prospectus ”
(as defined in Rule 433 under the Securities Act) (an “
Issuer Free Writing Prospectus ”) other than
(i) the documents listed on Schedule III hereto and
(ii) any other written communications, in each case approved
in writing in advance by the Representatives. Each such Issuer Free
Writing Prospectus complied in all material respects with the
Securities Act, has been or will be (within the time period
specified in Rule 433) filed in accordance with the Securities
Act (to the extent required thereby) and, when taken together with
the Preliminary Prospectus accompanying, or delivered prior to
delivery of, or filed prior
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to the first
use of such Issuer Free Writing Prospectus, did not, and at the
Time of Sale and at the Closing Date will not, contain any untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading;
provided that the Company makes no representation and
warranty with respect to any statements or omissions made in each
such Issuer Free Writing Prospectus in reliance upon and in
conformity with information relating to any Underwriter furnished
to the Company in writing by such Underwriter through the
Representatives expressly for use in any Issuer Free Writing
Prospectus. Each Issuer Free Writing Prospectus (including the
final term sheet prepared and filed pursuant to Section 5(a)
hereto) does not include any information that conflicts with the
information contained in the Registration Statement, including any
document incorporated therein by reference and any prospectus
supplement deemed to be a part thereof that has not been superseded
or modified. The foregoing sentence does not apply to statements in
or omissions from any Issuer Free Writing Prospectus based upon and
in conformity with written information furnished to the Company by
any Underwriter through the Representatives specifically for use
therein.
(d) The documents (the “
Incorporated Documents ”) incorporated by reference in
the Registration Statement, the Prospectus and the Time of Sale
Information, when filed with the Commission, conformed or will
conform, as the case may be, in all material respects with the
requirements of the Exchange Act.
(e) The Company (i) has been
duly incorporated, is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation,
(ii) has the corporate power and authority to own its property
and to conduct its business as described in the Time of Sale
Information and the Prospectus and (iii) is duly qualified to
transact business and is in good standing in each jurisdiction in
which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not have a
material adverse effect on the Company and its subsidiaries, taken
as a whole.
(f) Each subsidiary of the Company
which is a significant subsidiary as defined in Rule 1-02(w)
of Regulation S-X (a “ Significant Subsidiary
”) (i) has been duly formed, is validly existing in good
standing under the laws of the jurisdiction of its formation,
(ii) has the corporate, limited liability company, limited
partnership or partnership power and authority to own its property
and to conduct its business as described in the Time of Sale
Information and the Prospectus and (iii) is duly qualified to
transact business and is in good standing in each jurisdiction in
which the conduct of its business or its ownership or leasing of
property requires
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such
qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse
effect on the Company and its subsidiaries, taken as a whole.
(g) This Agreement has been duly
authorized, executed and delivered by the Company.
(h) The authorized capital stock of
the Company conforms as to legal matters to the description thereof
contained in the Time of Sale Information and the Prospectus.
(i) The Securities have been duly
authorized, and, when issued and delivered pursuant to this
Agreement, will have been duly executed, authenticated, issued and
delivered and will constitute valid and binding obligations of the
Company entitled to the benefits provided by the Indenture; the
Indenture has been duly authorized, executed and delivered by the
Company and is duly qualified under the Trust Indenture Act and
constitutes a valid and binding instrument, enforceable in
accordance with its terms, except as the enforceability thereof is
subject to the effect of (i) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other laws
relating to or affecting creditors’ rights generally and
(ii) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law);
the Securities and the Indenture will conform to the descriptions
thereof in the Time of Sale Information and the Prospectus.
(j) The execution and delivery by the
Company of, and the performance by the Company of its obligations
under, this Agreement, the Indenture and the Securities will not
contravene any provision of applicable law or the certificate of
incorporation or by-laws of the Company or any agreement, indenture
or other instrument binding upon the Company or any of its
subsidiaries that is material to the Company and its subsidiaries,
taken as a whole, or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the
Company or any subsidiary, and no consent, approval, authorization
or order of, or qualification with, any governmental body or agency
that has not already been obtained is required for the performance
by the Company of its obligations under this Agreement, the
Indenture or the Securities, except such as may be required by the
securities or Blue Sky laws of the various states in connection
with the offer and sale of the Securities.
(k) Neither the Company nor any of
its subsidiaries is in violation of its corporate charter or
by-laws or other constitutive document or in default under any
agreement, indenture or instrument, which default could reasonably
be expected to have a material adverse effect on the business,
properties, financial condition or results of operations of the
Company and its subsidiaries, taken as a whole, and no event or
condition
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has occurred or
exists which, with the giving of notice or the lapse of time or
both, would result in any such violation or default which would
have such an effect. Except as described in the Time of Sale
Information and the Prospectus, neither the Company nor any of its
subsidiaries is in violation of any law, ordinance, governmental
rule or regulation or court decree to which it may be subject,
which violation could reasonably be expected to have a material
adverse effect on the business, properties, financial condition or
results of operations of the Company and its subsidiaries, taken as
a whole.
(l) There has not occurred any
material adverse change, or any development involving a prospective
material adverse change, in the condition, financial or otherwise,
or in the earnings, business or operations of the Company and its
subsidiaries, taken as a whole, from that set forth in the Time of
Sale Information and the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this
Agreement).
(m) There are no legal or
governmental investigations or proceedings pending or threatened to
which the Company or any of its subsidiaries is a party or to which
any of the properties of the Company or any of its subsidiaries is
subject, that are required to be described in the Registration
Statement, the Time of Sale Information or the Prospectus and are
not so described or any statutes, regulations, contracts or other
documents that are required to be described in the Registration
Statement, the Time of Sale Information or the Prospectus or to be
filed as exhibits to the Registration Statement that are not
described or filed as required.
(n) Each preliminary 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 Securities Act, complied when so filed in all material
respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder.
(o) The Company is not, and after
giving effect to the offering and sale of the Securities and the
application of the proceeds thereof as described in the Time of
Sale Information and the Prospectus will not be, required to
register as an “ investment company ” as such
term is defined in the Investment Company Act of 1940, as
amended.
(p) All licenses, permits, consents,
certificates of need, authorizations, certifications,
accreditations, franchises, approvals, grants of rights by, or
filings or registrations with, any federal, state, local or foreign
court or governmental or public body, authority, or other
instrumentality or third person (including without limitation the
Federal Energy Regulatory Commission (“ FERC ”))
(any of the foregoing a “ License ”) necessary
for the Company and its subsidiaries to own, build,
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maintain or
operate their respective businesses or properties have been duly
authorized and obtained, and are in full force and effect, except
where the failure to so be obtained or in effect would not,
individually or in the aggregate, have a material adverse effect on
the Company and its subsidiaries, taken as a whole; and the Company
and its subsidiaries are in compliance in all material respects
with all provisions thereof; no event has occurred which permits
(or with the passage of time would permit) the revocation or
termination of any License, or which could result in the imposition
of any restriction thereon, which is of such a nature or the effect
of which would reasonably be expected to have a material adverse
effect on the Company and its subsidiaries, taken as a whole; no
material License is the subject of any pending or, to the best of
the Company’s knowledge, threatened challenge or revocation
which, if such License were revoked, would reasonably be expected
to have a material adverse effect on the Company and its
subsidiaries, taken as a whole; the Company and its subsidiaries
are not required to obtain any material License that has not
already been obtained from, or effect any material filing or
registration that has not already been effected with, the FERC or
any other federal, state or local regulatory authority in
connection with the execution and delivery of this Agreement, the
Indenture or the Securities; and except, in each case, as described
in the Time of Sale Information and the Prospectus (exclusive of
any amendments or supplements thereto subsequent to the date of
this Agreement).
(q) The Company and its subsidiaries
(i) are in compliance with any and all applicable foreign,
federal, state and local laws and regulations relating to the
protection of human health and safety, the environment or hazardous
or toxic substances or wastes, pollutants or contaminants (“
Environmental Laws ”), (ii) have received all
permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective
businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except where
such noncompliance with Environmental Laws, failure to receive
required permits, licenses or other approvals or failure to comply
with the terms and conditions of such permits, licenses or
approvals would not, singly or in the aggregate, have a material
adverse effect on the Company and its subsidiaries, taken as a
whole; and except, in each case, as described in the Time of Sale
Information and the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this
Agreement).
(r) Except as described in the Time
of Sale Information and the Prospectus (exclusive of any amendments
or supplements thereto subsequent to the date of this Agreement),
there are no costs or liabilities associated with Environmental
Laws (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license
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or approval,
any related constraints on operating activities and any potential
liabilities to third parties) which would, singly or in the
aggregate, have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(s) The Company has prepared its
financial statements on a consistent basis in accordance with
generally accepted accounting principles.
(t) The Company and its subsidiaries
have good and indefeasible title to all items of real property and
good and defensible title to all personal property owned by them
and the right to use all other property used or proposed to be used
by them in the ordinary course of business, in each case free and
clear of all liens, encumbrances and defects except such as are
described or referred to in the Time of Sale Information and the
Prospectus or such as do not materially adversely affect the value
of such property and do not unreasonably interfere with the use
made or proposed to be made of such property by the Company and its
subsidiaries; and any real property and buildings held under lease
by the Company and its subsidiaries are held by them under valid,
existing and enforceable leases with such exceptions as are not
material and do not unreasonably interfere with the use made or
proposed to be made of such property and buildings by the Company
or its subsidiaries.
(u) Immediately after any sale of
Securities by the Company hereunder, the aggregate initial offering
price of Securities which have been issued and sold by the Company
hereunder and of any securities of the Company (other than the
Securities) that shall have been issued and sold pursuant to the
Registration Statement will not exceed the aggregate initial
offering price of securities registered under the Registration
Statement.
5. The Company covenants and
agrees with each of the several Underwriters as follows:
(a) to file the Preliminary
Prospectus in a form approved by you pursuant to Rule 424
under the Securities Act as required by Rule 424(b); to file
the Prospectus in a form approved by you pursuant to Rule 424
under the Securities Act not later than the Commission’s
close of business on the second Business Day following the date of
determination of the offering price of the Securities or, if
applicable, such earlier time as may be required by Rule 424(b) and
430B under the Securities Act; and to file any Issuer Free Writing
Prospectus (including the final term sheet in the form of
Schedule IV hereto) to the extent required by Rule 433
under the Securities Act;
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(b) to furnish to you, without
charge, five conformed copies of the Registration Statement
(including exhibits thereto) and for delivery to each other
Underwriter a conformed copy of the Registration Statement (without
exhibits thereto) and to furnish to you in New York City, without
charge, prior to 10:00 a.m. New York City time on the business
day next succeeding the date of this Agreement and during the
period mentioned in Section 5(f) or 5(g) below, as many copies of
the Prospectus and each Issuer Free Writing Prospectus (if
applicable) and any supplements and amendments thereto or to the
Registration Statement as you may reasonably request;
(c) from the date hereof and prior to
the Closing Date, to furnish to you a copy of each proposed free
writing prospectus, any proposed amendment or supplement to the
Registration Statement or the Prospectus, for your review, and not
to file any such proposed free writing prospectus, amendment or
supplement to which you reasonably object;
(d) not to take any action that would
result in an Underwriter or the Company being required to file with
the Commission pursuant to Rule 433(d) under the Securities Act a
free writing prospectus prepared by or on behalf of the Underwriter
that the Underwriter otherwise would not have been required to file
thereunder;
(e) to file promptly all reports and
any definitive proxy or information statements required to be filed
by the Company with the Commission pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act for so long as the delivery
of a prospectus is required in connection with the offering or sale
of the Securities, and during such same period, to advise you
promptly, and to confirm such advice in writing, (i) when any
amendment to the Registration Statement shall have become
effective, (ii) of any request by the Commission for any
amendment to the Registration Statement or any amendment or
supplement to the Prospectus or for any additional information,
(iii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
initiation or threatening of any proceeding for that purpose, and
(iv) of the receipt by the Company of any notification with
respect to any suspension of the qualification of the Securities
for offer and sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and to use its best
efforts to prevent the issuance of any such stop order or
notification and, if issued, to obtain as soon as possible the
withdrawal thereof;
(f) if at any time prior to the
Closing Date (i) any event shall occur or condition shall
exist as a result of which the Time of Sale Information as then
amended or supplemented would include any untrue statement of a
material fact or omit to state any material fact necessary in order
to make the statements therein, in the light of the circumstances,
not
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misleading or
(ii) it is necessary to amend or supplement the Time of Sale
Information to comply with law, the Company will promptly notify
the Underwriters thereof and forthwith prepare and, subject to
paragraph (c) above, file with the Commission (to the extent
required) and furnish to the Underwriters and to such dealers as
the Representatives may designate, such amendments or supplements
to the Time of Sale Information as may be necessary so that the
statements in the Time of Sale Information as so amended or
supplemented will not, in the light of the circumstances, be
misleading or so that the Time of Sale Information will comply with
law;
(g) if, during such period after the
first date of the public offering of the Securities as in the
opinion of counsel for the Underwriters the Prospectus (or in lieu
thereof the notice referred to in Rule 173(a) under the Securities
Act) 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 when the Prospectus (or in lieu thereof the notice
referred to in Rule 173(a) under the Securities Act) is delivered
to a purchaser, not misleading, or if it is necessary to amend or
supplement the Prospectus to comply with applicable law, forthwith
to prepare, file with the Commission and furnish, at the expense of
the Company, to the Underwriters and to the dealers (whose names
and addresses you will furnish to the Company) to which Sec
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