EXECUTION COPY
Chiquita Brands International,
Inc.
4.25% Convertible Senior Notes due
2016
Underwriting
Agreement
February 6, 2008
Goldman, Sachs & Co.
85 Broad Street,
New York, New York 10004
Morgan Stanley & Co.
Incorporated
1585 Broadway,
New York, New York 10036
As representatives of the several
Underwriters
named in Schedule I hereto.
Ladies and Gentlemen:
Chiquita Brands International, Inc., a
New Jersey corporation (the “Company”), proposes,
subject to the terms and conditions stated herein, to issue and
sell to the Underwriters named in Schedule I hereto (the
“Underwriters”), for whom Goldman, Sachs & Co. and
Morgan Stanley & Co. Incorporated are acting as representatives
(the “Representatives”), an aggregate of $175,000,000
principal amount of its 4.25% Convertible Senior Notes due 2016
(the “Firm Securities”). The Company also proposes to
issue and sell to the Underwriters not more than an additional
$25,000,000 principal amount of its 4.25% Convertible Senior Notes
due 2016 (the “Optional Securities”) if and to the
extent that the Underwriters shall have determined to exercise the
right to purchase such 4.25% Convertible Senior Notes due 2016
granted to the Underwriters in Section 2 hereof for the sole
purpose of covering overallotments. The Firm Securities and the
Optional Securities are hereinafter collectively referred to as the
“Securities.” The Securities will be convertible into
shares of common stock, par value $0.01 per share (the
“Stock”), of the Company under certain circumstances
described in the Indenture (as defined herein).
1. The Company represents and warrants
to, and agrees with, each of the Underwriters that:
(a) A registration statement on Form
S-3 (File No. 333-123181) (the “Initial Registration
Statement”) in respect of the Securities and shares of the
Stock issuable upon conversion thereof has been filed with the Securities and Exchange
Commission (the “Commission”); the Initial Registration
Statement and any post-effective amendment thereto, each in the
form heretofore delivered to you and, excluding exhibits to the
Initial Registration Statement, but including all documents
incorporated by reference in the prospectus included
therein, to you for each of the other
Underwriters have been declared effective by the Commission in such
form; other than a registration statement, if any, increasing the
size of the offering (a “Rule 462(b) Registration
Statement”), filed pursuant to Rule 462(b) under the
Securities Act of 1933, as amended (the “Act”), which
became effective upon filing, no other document with respect to the
Initial Registration Statement or document incorporated by
reference therein has heretofore been filed, or transmitted for
filing, with the Commission (other than prospectuses filed pursuant
to Rule 424(b) of the rules and regulations of the Commission under
the Act, each in the form heretofore delivered to the
Representatives); and no stop order suspending the effectiveness of
the Initial Registration Statement, any post-effective amendment
thereto or any part thereof or the Rule 462(b) Registration
Statement, if any, has been issued and no proceeding for that
purpose has been initiated or, to the knowledge of the Company,
threatened by the Commission (the base prospectus filed as part of
the Initial Registration Statement, in the form in which it has
most recently been filed with the Commission on or prior to the
date of this Agreement relating to the Securities, is hereinafter
called the “Basic Prospectus”; any preliminary
prospectus (including any preliminary prospectus supplement)
relating to the Securities filed with the Commission pursuant to
Rule 424(b) under the Act is hereinafter called a
“Preliminary Prospectus”; the various parts of the
Initial Registration Statement and the Rule 462(b) Registration Statement, if
any, including all exhibits thereto and including any prospectus
supplement relating to the Securities that is filed with the
Commission and deemed by virtue of Rule 430B under the Act to be
part of the Initial Registration Statement, each as amended at the
time such part of the Initial Registration Statement became
effective or such part of the Rule 462(b) Registration Statement,
if any, became or hereafter becomes effective, are hereinafter
collectively called the “Registration Statement”; the
Basic Prospectus, as amended and supplemented immediately prior to
the Applicable Time (as defined in Section 1(c) hereof), is
hereinafter called the “Pricing Prospectus”; the form
of the final prospectus relating to the Securities filed with
Commission pursuant to Rule 424(b) under the Act in accordance with
Section 5(a) hereof is hereinafter called the
“Prospectus”; any reference herein to the Basic
Prospectus, the Pricing 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, as of
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the date of such prospectus; any
reference to any amendment or supplement to the Basic Prospectus,
any Preliminary Prospectus or the Prospectus shall be deemed to
refer to and include any post-effective amendment to the
Registration Statement, any prospectus supplement relating to the
Securities filed with the Commission pursuant to Rule 424(b) under
the Act and any documents filed under the Securities Exchange Act
of 1934, as amended (the “Exchange Act”), and
incorporated therein, in each case after the date of the Basic
Prospectus, such Preliminary Prospectus or the Prospectus, as the
case may be; any reference to any amendment to the Registration
Statement shall be deemed to refer to and include any annual report
of the Company filed pursuant to Section 13(a) or 15(d) of the
Exchange Act after the effective date of the Registration Statement
that is incorporated by reference in the Registration Statement;
and any “issuer free writing prospectus” as defined in
Rule 433 under the Act relating to the Securities is hereinafter
called an “Issuer Free Writing Prospectus”);
(b) No order preventing or suspending
the use of any Preliminary Prospectus or any Issuer Free Writing
Prospectus has been issued by the Commission, and each Preliminary
Prospectus, at the time of filing thereof, conformed in all
material respects to the requirements of the Act and the Trust
Indenture Act of 1939, as amended (the “Trust Indenture
Act”), and the rules and regulations of the Commission
thereunder, and 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 made, 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 Company by an
Underwriter through the Representatives expressly for use
therein;
(c) For the purposes of this
Agreement, the “Applicable Time” is 7:00 a.m. (Eastern
time) on February 7, 2008; the Pricing Prospectus as supplemented
by the final term sheet prepared and filed pursuant to Section 5(a)
hereof, taken together (collectively, the “Pricing Disclosure
Package”) as of the Applicable Time, did not 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 under which they were made, not
misleading; and each Issuer Free Writing Prospectus listed on
Schedule III(a) hereto does not conflict with the information
contained in the Registration Statement, the Pricing Prospectus or
the Prospectus and each such Issuer Free Writing Prospectus, as
supplemented by and taken together with the Pricing Disclosure
Package as of the Applicable Time, did not include any untrue
statement of a material fact or omit to state any material fact
necessary in order to make
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the statements therein, in the light
of the circumstances under which they were made, not misleading;
provided, however, that this representation and warranty shall not
apply to statements or omissions made in an Issuer Free Writing
Prospectus in reliance upon and in conformity with information
furnished in writing to the Company by an Underwriter through the
Representatives expressly for use therein;
(d) The documents incorporated by
reference in the Pricing Prospectus and the Prospectus, when they
became effective or were filed with the Commission, as the case may
be, conformed in all material respects to the requirements of the
Exchange Act and the rules and regulations of the Commission
thereunder, and none of such documents 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; and any further documents so filed and
incorporated by reference in the Prospectus or any further
amendment or supplement thereto, when such documents become
effective or are filed with the Commission, as the case may be,
will conform in all material respects to the requirements of the
Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder 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 Company by an Underwriter through the
Representatives expressly for use therein; and no such documents
were filed with the Commission since the Commission’s close
of business on the business day immediately prior to the date of
this Agreement and prior to the execution of this Agreement, except
as set forth on Schedule III(b) hereto;
(e) The Registration Statement
conforms, and the Prospectus and any further amendments or
supplements to the Registration Statement and the Prospectus will
conform, in all material respects to the requirements of the Act
and the Trust Indenture Act and the rules and regulations of the
Commission thereunder and do not and will not, as of the applicable
effective date as to each part of the Registration Statement and as
of the applicable filing date as to the Prospectus and any
amendment or supplement thereto, 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 Company by an Underwriter through the
Representatives expressly for use therein;
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(f) Subsequent to the date as of which
information is given in the Pricing Prospectus, (i) the Company and
its subsidiaries have not incurred any liability or obligation,
direct or contingent, material to the Company and its subsidiaries,
taken as a whole, nor entered into any transaction not in the
ordinary course of business, material to the Company and its
subsidiaries, taken as a whole, (ii) the Company and its
subsidiaries have not purchased any of the Company’s or its
subsidiaries’ outstanding capital stock, nor has the Company
declared, paid or otherwise made any dividend or distribution of
any kind on its capital stock (except with respect to options
granted pursuant to stock option plans existing on the date of the
Pricing Prospectus and the cashless exercise of stock options and
warrants previously granted under such plans), (iii) there has not
been any material change in the capital stock, short-term
debt or long-term debt of the
Company and its subsidiaries, taken as a whole. Since the date of
which information is given in the Preliminary Prospectus, 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, considered as one
entity;
(g) The Company and its subsidiaries
have good and marketable title in fee simple to all real property
and good and marketable title to all personal property owned by
them, in each case free and clear of all liens, encumbrances and
defects except such as are described in the Pricing Prospectus or
such as do not materially affect the value of such property and do
not interfere with the use made and proposed to be made of such
property by the Company and its subsidiaries or such as do not,
singly or in the aggregate, have a Material Adverse Effect (as
defined herein); and any 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 do
not interfere with the use made and proposed to be made of such
property and buildings by the Company and its subsidiaries or such
as do not, singly or in the aggregate, have a Material Adverse
Effect, or except as described in the Pricing
Prospectus;
(h) The Company has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of the State of New Jersey, with power and
authority (corporate and other) to own its properties and conduct
its business as described in the Pricing Prospectus, and has been
duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties or conducts any
business so as to require such qualification, except to the extent
that the failure to be so qualified or be in good standing in any
such jurisdiction
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would not have a material adverse
effect on the Company and its subsidiaries, considered as one
entity (a “Material Adverse Effect”);
(i) Each of the Company’s
significant subsidiaries (as defined in Rule 1-02 of Regulation S-X
of the Commission and as determined as of December 31, 2007) (each,
a “Significant Subsidiary” and, collectively, the
“Significant Subsidiaries”) has been duly incorporated
or otherwise formed, is validly existing as a corporation, limited
liability company, partnership or other legal entity in good
standing under the laws of the jurisdiction of its incorporation or
formation, has the power and authority to own its property and to
conduct its business as described in the Pricing Prospectus, and is
duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership
or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing
would not have a Material Adverse Effect; all of the issued shares
of capital stock or other equity interests of each Significant
Subsidiary (i) have been duly authorized and validly issued, are
fully paid and non-assessable on the date hereof and (ii) are owned
directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims, except in the case of (ii) above,
for such liens, encumbrances, equities or claims as would not have
a Material Adverse Effect or as provided in the credit agreement
dated as of January 5, 2005, as amended, by and among Chiquita
Brands L.L.C. and Wachovia Bank, National Association as
administrative agent, and certain other lenders and financial
institutions party thereto or as described in the Pricing
Prospectus. The Significant Subsidiaries of the Company are set
forth in Schedule II hereto;
(j) The Company has an authorized
capitalization as set forth in the Pricing Disclosure Package and
all of the issued shares of capital stock of the Company have been
duly and validly authorized and issued and are fully paid and
non-assessable; the shares of Stock initially issuable upon
conversion of the Securities (without giving effect to any
antidilution adjustments) have been duly and validly authorized and
reserved for issuance and, when issued and delivered in accordance
with the provisions of the Securities and the Indenture referred to
below, will be duly and validly issued, fully paid and
non-assessable and will conform to the description of the Stock
contained in the Pricing Disclosure Package and the
Prospectus;
(k) This Agreement has been duly
authorized, executed and delivered by the Company;
(l) The Securities have been duly
authorized and, when executed and authenticated in accordance with
the provisions of the Indenture (assuming the due authorization,
execution and delivery of the
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Indenture and the Supplemental
Indenture by the Trustee) and delivered to and paid for by the
Underwriters in accordance with the terms of this Agreement, will
constitute valid and legally binding obligations of the Company
entitled to the benefits provided by the base indenture dated as of
February 1, 2008 (the “Base Indenture”) between the
Company and LaSalle Bank National Association, as Trustee (the
“Trustee”), which is substantially in the form filed as
an exhibit to the Registration Statement, as supplemented by the
first supplemental indenture to be dated as of February 12, 2008
(the “Supplemental Indenture”, together with the Base
Indenture, the “Indenture”), under which they are to be
issued; the Base Indenture has been duly authorized and duly
qualified under the Trust Indenture Act and, when executed and
delivered by the Company and the Trustee, the Indenture will
constitute a valid and legally binding instrument, enforceable in
accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors’ rights and
to general equity principles; and the Securities and the Indenture
will conform in all material respects to the descriptions thereof
in the Pricing Disclosure Package and the Prospectus;
(m) The issue and sale of the
Securities and the compliance by the Company with its obligations
under the Securities, the Indenture and this Agreement and the
consummation of the transactions herein and therein contemplated
will not contravene (i) any provision of applicable law, (ii) the
certificate of incorporation, by-laws or similar organizational
document of the Company, (iii) any agreement or other instrument
binding upon the Company or any of its subsidiaries that is
material to the Company and its subsidiaries, considered as one
entity, or (iv) any judgment, order or decree of any governmental
body, agency or court having jurisdiction over the Company or any
of its subsidiaries or any of their properties, except, in the case
of clauses (i), (iii) and (iv) above, where such contravention
would not have a Material Adverse Effect; and no consent, approval,
authorization, order, registration or qualification of or with any
such court or governmental agency or body is required for the issue
and sale of the Securities or the consummation by the Company of
the transactions contemplated by this Agreement or the Indenture,
except such as have been obtained under the Act and the Trust
Indenture Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under foreign
laws or regulations or state securities or Blue Sky laws in
connection with the purchase and distribution of the Securities by
the Underwriters, and except where the failure to obtain such
consent, approval, authorization, order or qualification would not
have a Material Adverse Effect;
(n) Other than as set forth in
all material respects in the Pricing Prospectus, there are no legal
or governmental proceedings pending to
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which the Company or any of its
subsidiaries is a party or of which any property of the Company or
any of its subsidiaries is the subject which, if determined
adversely to the Company or any of its subsidiaries, would have a
Material Adverse Effect or a material adverse effect on the power
or ability of the Company to perform its obligations under this
Agreement, the Indenture or the Securities or to consummate the
transactions contemplated hereby; and, to the Company’s
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(o) Neither the Company nor any of its
Significant Subsidiaries is in violation of its certificate of
incorporation, by-laws or similar organizational documents and (i)
neither the Company nor any of its subsidiaries is in default, and
no event has occurred which, with notice or lapse of time or both,
would constitute such a default, in the performance or observance
of any obligation, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which it is a party or by which it or
any of its properties may be bound or (ii) in violation in any
respect of any law, ordinance, governmental rule, regulation or
court decree to which it or its property or assets may be subject,
except, in the case of clauses (i) and (ii), for any default or
violation that could not be reasonably expected to have a Material
Adverse Effect;
(p) The statements set forth in the
Pricing Prospectus and the Prospectus under the caption
“Description of Capital Stock”, insofar as they purport
to constitute a summary of the terms of the Stock, and under the
caption “Underwriting”, insofar as they purport to
describe the provisions of the documents referred to therein, are
accurate, complete and fair.
(q) The Company is not and, after
giving effect to the offering and sale of the Securities and the
application of the proceeds thereof, will not be an
“investment company”, as such term is defined in the
Investment Company Act of 1940, as amended (the “Investment
Company Act”);
(r) At the earliest time after the
filing of the Initial Registration Statement that the Company or
another offering participant made a bona fide offer (within the
meaning of Rule 164(h)(2) under the Act) of the Securities, the
Company was not an “ineligible issuer” as defined in
Rule 405 under the Act;
(s) Ernst & Young LLP, who have certified certain
financial statements of the Company and its subsidiaries, and have
audited the Company’s internal control over financial
reporting and management’s
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assessment thereof, are independent
public accountants as required by the Act and the rules and
regulations of the Commission thereunder;
(t) The Company and its subsidiaries
maintain a system of internal control over financial reporting (as
such term is defined in Rule 13a-15(f) under the Exchange Act) that
complies with the requirements of the Exchange Act and has been
designed by the Company’s principal executive officer and
principal financial officer, or under their supervision, to provide
reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles. Such system of internal control over financial
reporting were evaluated for effectiveness and were effective as of
the date of the latest audited financial statements included or
incorporated by reference in the Prospectus and the Company and its
subsidiaries are not aware of any material weaknesses in such
internal control over financial reporting;
(u) Since the date of the latest audited financial
statements included or incorporated by reference in the Prospectus,
there has been no change in the Company’s internal control
over financial reporting that has materially adversely affected, or
is reasonably likely to materially adversely affect, the
Company’s internal control over financial reporting;
and
(v) The Company maintains disclosure controls and
procedures (as such term is defined in Rule 13a-15(e) under the
Exchange Act) that comply with the requirements of the Exchange
Act; such disclosure controls and procedures have been designed to
ensure that material information relating to the Company and its
subsidiaries is made known to the Company’s principal
executive officer and principal financial officer by others within
those entities; and such disclosure controls and procedures were
evaluated for effectiveness and were effective as of the date of
the latest financial statements included or incorporated by
reference in the Prospectus and since such evaluation, the Company
has made no significant changes in such system of disclosure
controls and procedures or in other systems, processes or otherwise
that could materially adversely affect such system of disclosure
controls and procedures.
(w) The Company and each of its
subsidiaries possess all material licenses, certificates,
authorizations and permits issued by, and have made all
declarations and filings with, the appropriate federal, state or
foreign regulatory agencies or bodies that are necessary for the
conduct of their respective businesses as described in the Pricing
Prospectus, except where the failure to possess or make the same
would not, singularly or in the aggregate, have a Material Adverse
Effect, and neither the Company nor any of its subsidiaries has
received notification of
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any revocation or modification of any
such license, certificate, authorization or permit or has actual
knowledge that any such license, certificate, authorization or
permit will not be renewed in the ordinary course, except where
such revocation, modification or nonrenewal could not reasonably be
expected to, singularly or in the aggregate, have a Material
Adverse Effect;
(x) Except as set forth in the Pricing
Prospectus, the Company and its subsidiaries own or possess, or can
acquire (or obtain the right to use) on reasonable terms, all
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks and trade names, currently employed by
them in connection with the business now operated by them, except
where the failure to own or possess or to have the right to acquire
any of the foregoing, singly or in the aggregate, does not have a
Material Adverse Effect, and neither the Company nor any of its
subsidiaries has received any notice of infringement of or conflict
with asserted rights of others with respect to any of the foregoing
which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would have a Material Adverse
Effect;
(y) To the knowledge of the Company,
neither the Company nor any of its subsidiaries, nor any director,
officer, employee or agent thereof (i) has violated during the past
five years or is currently in violation of any provision of the
Foreign Corrupt Practices Act of 1977, as amended (except, however,
with respect to any violations of Section 78m(b)(2) thereof
(Section 13(b)(2) of the Exchange Act) that would not, singly or in
the aggregate, have a Material Adverse Effect), or (ii) has made
during the past five years (x) any undisclosed bribe, rebate,
payoff, influence payment, kickback or other unlawful payment (and
none of such disclosed payments will result in a Material Adverse
Effect) or (y) conducted any trading otherwise prohibited under
applicable law, rule or regulation of any locality, except, in
either (i) or (ii), with respect to such matters as are disclosed
in the Pricing Prospectus;
(z) No labor dispute with the
employees of the Company or any of its subsidiaries exists, except
as described in the Pricing Prospectus, or, to the knowledge of the
Company, no labor dispute with the employees of the Company or any
of its subsidiaries is imminent, except for such disputes that do
not or would not have a Material Adverse Effect; and the Company is
not aware (without having conducted an independent investigation)
of any existing, threatened or imminent labor disturbance by the
employees of any of the Company’s principal suppliers or
contractors that could have a Material Adverse Effect;
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(aa) The Company and its subsidiaries
are insured by insurers of national standing in such insurers
respective jurisdictions against such losses and risks and in such
amounts as are adequate in the businesses in which they are
engaged; and neither the Company nor any of its subsidiaries has
any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary
to continue its business at a cost that would not have a Material
Adverse Effect;
(bb) The Company and each of its
subsidiaries have filed all federal, state, local and foreign
income and franchise tax returns required to be filed through the
date hereof (except with respect to such tax returns which (x) are
currently being challenged in good faith and (y) (i) for which
appropriate reserves have been made or (ii) which, if such
challenges were determined adversely to the Company, would not have
a Material Adverse Effect, and have paid all taxes due thereon, and
no tax deficiency has been determined adversely to the Company or
any of its subsidiaries which has had (nor does the Company have
any knowledge of any tax deficiency which, if determined adversely
to the Company or any of its subsidiaries, could reasonably be
expected to have) a Material Adverse Effect;
(cc) 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; and
(dd) 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 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.
2. Subject to the terms and conditions
herein set forth, (a) the Company agrees to issue and sell to each
of the Underwriters, and each of the
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Underwriters agrees, severally and not
jointly, to purchase from the Company, at a purchase price of
97.25% of the principal amount thereof, the principal amount of
Firm Securities set forth opposite the name of such Underwriter in
Schedule I hereto, and (b) in the event and to the extent that the
Underwriters shall exercise the election to purchase Optional
Securities as provided below, the Company agrees to issue and sell
to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company, at the
same purchase price set forth in clause (a) of this Section 2, that
portion of the aggregate principal amount of Optional Securities as
to which such election shall have been exercised (to be adjusted by
you so as to eliminate fractions of $1,000) determined by
multiplying such aggregate principal amount of Optional Securities
by a fraction, the numerator of which is the maximum aggregate
principal amount of Optional Securities which such Underwriter is
entitled to purchase as set forth opposite the name of such
Underwriter in Schedule I hereto and the denominator of which is
the maximum aggregate principal amount of Optional Securities that
all of the Underwriters are entitled to purchase
hereunder.
The Company hereby grants to the
Underwriters the right to purchase at their electi
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