WASHINGTON MUTUAL, INC. 3,000,000 Shares of 7.75% Series R Non-Cumulative Perpetual Convertible Preferred Stock, No Par Value UNDERWRITING AGREEMENT
Exhibit 1.1
3,000,000 Shares of 7.75% Series R Non-Cumulative Perpetual Convertible Preferred Stock, No Par Value
UNDERWRITING AGREEMENT
December 11, 2007
Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
As Representatives of the several Underwriters named in Schedule A
Ladies and Gentlemen:
Washington Mutual, Inc., a corporation organized under the laws of the State of Washington
(the “Company”), proposes to issue and sell to the underwriters named in Schedule A annexed hereto
(the “Underwriters”), for whom you are acting as representatives, 3,000,000 shares of its 7.75%
Series R Non-Cumulative Perpetual Convertible Preferred Stock, no par value and liquidation
preference $1,000 per share (the “Preferred Stock”) convertible into common shares, no par value,
of the Company (such shares of Preferred Stock, the “Securities”). The Securities are described in
the Prospectus that is referred to below. The Company’s common shares, no par value, are
hereinafter referred to as the “Common Stock.”
The Company has prepared and filed in respect of the Securities, in accordance with the
provisions of the Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder (collectively, the “Act”), with the Securities and Exchange Commission (the
“Commission”) an “automatic shelf registration statement” (as defined in Rule 405 under the Act) on
Form S-3 (File No. 333-130929) (the “registration statement”), including a prospectus, which
registration statement incorporates by reference documents which the Company has filed, or will
file, in accordance with the provisions of the Securities Exchange Act of 1934, as amended, and the
rules and regulations thereunder (collectively, the “Exchange Act”). Such registration statement,
and any post effective amendment thereto, became effective on filing.
Except where the context otherwise requires, “Registration Statement”, as used herein, means
the registration statement, as amended at the time of such registration statement’s effectiveness
for purposes of Section 11 of the Act, as such section applies to the respective Underwriters (the
“Effective Time”), including (i) all documents filed as a part thereof or incorporated or deemed to
be incorporated by reference therein and (ii) any information contained or incorporated by
reference in a prospectus filed with the Commission pursuant to Rule 424(b) under the Act, to the
extent such information is deemed, pursuant to Rule 430B under the Act, to be part of the
registration statement at the Effective Time.
The Company has furnished to you, for use by the Underwriters and by dealers in connection
with the offering of the Securities, copies of one or more preliminary prospectus supplements, and
the documents incorporated by reference therein (to the extent such documents are not publicly
available through the Commission’s XXXXX database), relating to the Securities. Except where the
context otherwise requires, “Pre-Pricing Prospectus”, as used herein, means each such preliminary
prospectus supplement, in the form so furnished, including any basic prospectus (whether or not in
preliminary form) furnished to you by the Company and attached to or used with such preliminary
prospectus supplement. Except where the context otherwise requires, “Basic Prospectus”, as used
herein, means any such basic prospectus and any basic prospectus furnished to you by the
Company and attached to or used with the Prospectus Supplement (as defined below).
Except where the context otherwise requires:
| - | “Pricing Prospectus”, as used herein, means the Pre-Pricing Prospectus (including the related Basic Prospectus), as amended and supplemented immediately prior to the Applicable Time; | ||
| - | “Prospectus Supplement”, as used herein, means the final prospectus supplement, relating to the Securities, filed by the Company with the Commission pursuant to Rule 424(b) under the Act on or before the second business day after the date hereof (or such earlier time as may be required under the Act), in the form furnished by the Company to you for use by the Underwriters and by dealers in connection with the offering of the Securities; and | ||
| - | “Prospectus”, as used herein, means the Prospectus Supplement together with the Basic Prospectus attached to or used with the Prospectus Supplement. |
“Permitted Free Writing Prospectuses”, as used herein, means the documents listed on Schedule
B attached hereto and each “road show” (as defined in Rule 433 under the Act), if any, related to
the offering of the Securities contemplated hereby that is a “written communication” (as defined in
Rule 405 under the Act). Each Underwriter severally covenants and agrees with the Company that such
Underwriter has not offered or sold and will not offer or sell, without the Company’s prior written
consent, any Securities by means of any “free writing prospectus” (as defined in Rule 405 under the
Act) other than one or more term sheets containing customary information which in their final form
will not be inconsistent with Schedule C hereof where the use or reference to such free writing
prospectus would require the filing of any “issuer information” (as defined in Rule 433 under the
Act), other than a Permitted Free Writing Prospectus.
“Pricing Disclosure Package”, as used herein, means the Pricing Prospectus as supplemented by
the final term sheet prepared and filed pursuant to Section 4(b) hereof, taken together with each
Permitted Free Writing Prospectus, as of 5:00 p.m. New York City time on the date of this Agreement
(the “Applicable Time”).
Any reference herein to the Registration Statement, any Basic Prospectus, any Pre-Pricing
Prospectus, the Prospectus Supplement, the Prospectus or any Permitted Free Writing Prospectus
shall be deemed to refer to and include the documents, if any, incorporated by reference, or deemed
to be incorporated by reference, therein (the “Incorporated Documents”), including, unless the
context otherwise requires, the documents, if any, filed as exhibits to such Incorporated
Documents. Any reference herein to the terms “amend”, “amendment” or “supplement”, with respect to
the Registration Statement, any Basic Prospectus, any Pre-Pricing Prospectus, the Prospectus
Supplement, the Prospectus or any Permitted Free Writing Prospectus shall be deemed to refer to and
include the filing of any document under the Exchange Act on or after the initial effective date of
the Registration Statement, or the date of such Basic Prospectus, such Pre-Pricing Prospectus, the
Prospectus Supplement, the Prospectus or such Permitted Free Writing Prospectus, as the case may
be, and deemed to be incorporated therein by reference.
As used in this Agreement, “business day” shall mean a day on which the New York Stock
Exchange (the “NYSE”) is open for trading. The terms “herein”, “hereof”, “hereto”, “hereinafter”
and similar terms, as used in this Agreement, shall in each case refer to this Agreement as a whole
and not to any particular section, paragraph, sentence or other subdivision of this Agreement. The
term “or”, as used herein, is not exclusive.
The Company and the Underwriters agree as follows:
1. Sale, Purchase and Fee. Upon the basis of the representations and warranties and subject to
the terms and conditions herein set forth, the Company hereby agrees to sell to the respective
Underwriters and each of the Underwriters, severally and not jointly, agrees to purchase from the
Company the number of Securities set forth opposite the name of such Underwriter in Schedule A
attached hereto, subject to adjustment in accordance with Section 8 hereof, in each case at a
purchase price of $970.00 per Security (the “Purchase Price”).
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In addition, the Company hereby agrees to pay to Xxxxxx Brothers Inc. (“Xxxxxx Brothers”),
individually and not in its capacity as a representative of the several Underwriters, a fee in the
amount of $3.75 million (the “LB Fee”), and to Xxxxxx Xxxxxxx & Co. Incorporated (“Xxxxxx
Xxxxxxx”), individually and not in its capacity as a representative of the several Underwriters, a
fee in the amount of $3.75 million (the “MS Fee”), in each case for advisory services provided to
the Company in connection with the public offering of the Securities.
The Company is advised by you that the Underwriters intend (i) to make a public offering of
their respective portions of the Securities as soon after the effectiveness of this Agreement as in
your judgment is advisable and (ii) initially to offer the Securities upon the terms set forth in
the Prospectus. You may from time to time increase or decrease the public offering price after the
initial public offering to such extent as you may determine.
2. Payment and Delivery. Payment for the Securities shall be made to the Company by Federal
Funds wire transfer against delivery of the Securities to you through the facilities of The
Depository Trust Company (“DTC”) for the respective accounts of the Underwriters. Such payment and
delivery shall be made at 10:00 A.M., New York City time, on December 17, 2007 (such time being
referred to herein as the “Time of Purchase”, and such date being referred to herein as the
“Closing Date”), unless another time shall be agreed to by you and the Company or unless postponed
in accordance with the provisions of Section 8 hereof. Electronic transfer of the Securities shall
be made to you at the Time of Purchase in such names and in such denominations as you shall
specify.
Payment of the LB Fee shall be made to Xxxxxx Brothers and payment of the MS Fee shall be made
to Xxxxxx Xxxxxxx by Federal Funds wire transfer at the Time of Purchase unless another time shall
be agreed to by you and the Company.
Deliveries of the documents described in Section 6 hereof with respect to the purchase of the
Securities shall be made at the offices of Xxxxx Xxxx & Xxxxxxxx at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx, 00000, at 9:00 A.M., New York City time, on the Closing Date.
3. Representations and Warranties of the Company. The Company represents and warrants to and
agrees with each of the Underwriters that:
(a) the Registration Statement has heretofore become effective under the Act; no stop order
of the Commission preventing or suspending the use of any Basic Prospectus, any Pre-Pricing
Prospectus, the Prospectus Supplement, the Prospectus or any Permitted Free Writing Prospectus,
or the effectiveness of the Registration Statement, has been issued, and no proceedings for such
purpose have been instituted or, to the Company’s knowledge, are contemplated by the Commission;
(b) the Registration Statement complied when it became effective, complies as of the date
hereof and, as amended or supplemented, at the Time of Purchase in connection with any sale of
Securities, will comply, in all material respects, with the requirements of the Act; the
conditions to the use of Form S-3 in connection with the offering and sale of the Securities as
contemplated hereby have been satisfied; the Registration Statement constitutes an “automatic
shelf registration statement” (as defined in Rule 405 under the Act); the Company has not
received from the Commission a notice, pursuant to Rule 401(g)(2) under the Act, of objection to
the use of the automatic shelf registration statement form; as of the determination date
applicable to the Registration Statement (and any amendment thereof) and the offering
contemplated hereby, the Company is a “well-known seasoned issuer” as defined in Rule 405 under
the Act; the Registration Statement did not, as of the Effective Time, 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; each Pre-Pricing Prospectus complied, at
the time it was filed with the Commission, and complies as of the date hereof, in all material
respects with the requirements of the Act; each Pre-Pricing Prospectus and any amendment or
supplement thereto, as of its date and the date it was filed with the Commission, and the Pricing
Prospectus, as then amended or supplemented as of the Applicable Time, in each case when read
together with the then issued Permitted Free Writing Prospectuses and the information in Schedule
C hereto, did not include an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the circumstances under which
they were made, not misleading; each of the Prospectus Supplement and the Prospectus will comply,
as of the date that it is filed with the Commission, the date of the Prospectus Supplement, the
Time of Purchase in connection with any sale of Securities, in all material respects, with the
requirements of the Act (in the case of the Prospectus, including, without limitation, Section
10(a) of the Act); at no time during the period that begins on the earlier of
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the date of the Prospectus Supplement and the date the Prospectus Supplement is filed with
the Commission and ends at the later of the Time of Purchase and the end of the period during
which a prospectus is required by the Act to be delivered (whether physically or through
compliance with Rule 172 under the Act or any similar rule) in connection with any sale of
Securities did or will the Prospectus, as then amended or supplemented, include an untrue
statement of a material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not misleading;
each Permitted Free Writing Prospectus does not conflict in any material respect with the
information contained in the Registration Statement, the Pricing Prospectus or the Prospectus
and, each Permitted Free Writing Prospectus, when read together with the Pricing Prospectus, any
other Permitted Free Writing Prospectuses then issued and the information in Schedule C hereto,
as of the Applicable Time, did not include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however, that the Company
makes no representation or warranty in this Section 3(b) with respect to any statement contained
in or omission from the Registration Statement, any Pre-Pricing Prospectus, the Prospectus or any
Permitted Free Writing Prospectus in reliance upon and in conformity with information concerning
an Underwriter and furnished in writing by or on behalf of such Underwriter through you to the
Company expressly for use in the Registration Statement, such Pre-Pricing Prospectus, the
Prospectus or such Permitted Free Writing Prospectus; each Incorporated Document, at the time
such document was filed with the Commission or at the time such document became effective, as
applicable, complied, in all material respects, with the requirements of the Exchange Act and did
not include an untrue statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under which they were
made, not misleading;
(c) the Pricing Disclosure Package, and any amendment or supplement thereto, did not
include, as of the Applicable Time, an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of the
circumstances under which they are made, not misleading;
(d) prior to the execution of this Agreement, the Company has not, directly or indirectly,
offered or sold any Securities by means of any “prospectus” (within the meaning of the Act) or
used any “prospectus” (within the meaning of the Act) in connection with the offer or sale of the
Securities other than the Pre-Pricing Prospectuses and the Permitted Free Writing Prospectuses,
if any; the Company is not an “ineligible issuer” (as defined in Rule 405 under the Act) for the
purposes of Rules 164 and Rule 433 under the Act with respect to the offer of the Securities; and
the Company has complied with the requirements of Rule 163, Rule 164 and Rule 433 under the Act
applicable to any Permitted Free Writing Prospectus;
(e) as of the date of this Agreement, the Company has an authorized and outstanding
capitalization as set forth in the sections of the Registration Statement, the Pricing Prospectus
and the Prospectus entitled “Capitalization” and “Description of Capital Stock” (and any similar
sections or information, if any, contained in any Permitted Free Writing Prospectus), and, as of
the Time of Purchase, the Company shall have an authorized and outstanding capitalization as set
forth in the sections of the Registration Statement, the Pricing Prospectus and the Prospectus
entitled “Capitalization” and “Description of Capital Stock” (and any similar sections or
information, if any, contained in any Permitted Free Writing Prospectus) (subject, in each case,
to the issuance of shares of Common Stock upon exercise of stock options disclosed as outstanding
in the Registration Statement (excluding the exhibits thereto), the Pricing Prospectus and the
Prospectus and the grant of options under existing stock option plans described in the
Registration Statement (excluding the exhibits thereto), Pricing Prospectus and the Prospectus);
all of the issued and outstanding shares of capital stock, including Common Stock, of the Company
have been duly authorized and validly issued and are fully paid and non-assessable, have been
issued in compliance with all applicable securities laws and were not issued in violation of any
preemptive right, resale right, right of first refusal or similar right; the Securities are duly
listed, and admitted and authorized for trading, subject to official notice of issuance, on the
NYSE;
(f) the Company has been duly incorporated and is an existing corporation under the laws of
the State of Washington, with power and authority (corporate and other) to own its properties and
conduct its business as described in the Pricing Disclosure Package; and the Company is duly
qualified to do business as a foreign corporation in good standing in all other jurisdictions in
which its ownership or lease of property or the conduct of its business requires such
qualification, except for such failure to qualify that would not, individually or in the
aggregate, have a material adverse effect on the condition (financial or other), business,
properties or results of
operations of the Company and its subsidiaries taken as a whole or the consummation of any
of the transactions contemplated by the Pricing Disclosure Package or this Agreement (a “Material
Adverse Effect”).
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(g) Washington Mutual Bank (“WMB”) has been duly organized as a federal savings association
and is in good standing under the laws of the United States, and Washington Mutual Bank fsb
(“WMBfsb” and, together with WMB, the “Significant Subsidiaries” and each a “Significant
Subsidiary”) has been duly organized as a federal savings association and is in good standing
under the laws of the United States. Each Significant Subsidiary has the power and authority
(corporate and other) to own its properties and conduct its business as described in the Pricing
Disclosure Package; and each Significant Subsidiary is duly qualified to do business as a foreign
corporation in good standing in all other jurisdictions in which its ownership or lease of
property or the conduct of its business requires under applicable law such qualification, except
for such failure to qualify, which would not, individually or in the aggregate, have a Material
Adverse Effect; all of the issued and outstanding capital stock of each Significant Subsidiary
has been duly authorized and validly issued and is fully paid and nonassessable; and the capital
stock of each Significant Subsidiary is owned by the Company, directly or through subsidiaries,
free from liens, encumbrances, claims and defects. The Company has no “significant subsidiaries”
as defined in Rule 1-02(w) of the Commission’s Regulation S-X, other than the Significant
Subsidiaries;
(h) the Company has been duly registered as a savings and loan holding company under the
applicable provisions of the Home Owners’ Loan Act; the Company and each of its subsidiaries are
in compliance in all material respects with all applicable laws administered by and regulations
of the Federal Deposit Insurance Corporation (“FDIC”), the Office of Thrift Supervision and any
other federal or state bank regulatory authority (the “Bank Regulatory Authorities”) with
jurisdiction over WMB, WMBfsb, or any of their subsidiaries, other than where such failures to
comply would not, individually or in the aggregate, have a Material Adverse Effect; and, except
as disclosed in the Pricing Disclosure Package, neither the Company nor any of its subsidiaries
is a party to any written agreement or memorandum of understanding with, or a party to any
commitment letter or similar undertaking to, or is subject to any order or directive by, or is a
recipient of an extraordinary supervisory letter from, or has adopted any board resolutions at
the request of, any Bank Regulatory Authority that restricts materially the conduct of its
business, or in any manner relates to its capital adequacy, its credit policies or its
management, nor have any of them been advised by any Bank Regulatory Authority that it is
contemplating issuing or requesting (or is considering the appropriateness of issuing or
requesting) any such order, decree, agreement, memorandum of understanding, extraordinary
supervisory letter, commitment letter or similar submission, or any such board resolutions;
(i) the Securities have been duly authorized and, when issued and delivered as provided
herein, will be validly issued, fully paid and non-assessable and will not be issued in violation
of any pre-emptive or other similar rights of any securityholder of the Company; the Securities
conform in all material respects with the descriptions thereof in the Pricing Disclosure Package;
the shares of Common Stock initially issuable upon conversion of the Securities have been duly
authorized and reserved for issuance and, when issued and delivered upon conversion, will be
validly issued, fully paid and non-assessable and will not be issued in violation of any
pre-emptive or other similar rights of any securityholder of the Company;
(j) no consent, approval, authorization, or order of, or filing with, any governmental
agency or body or any court is required for the consummation of the transactions contemplated by
this Agreement or in connection with the issuance and sale of any of the Securities, except (i)
such as will have been obtained or made prior to the Time of Purchase and (ii) as may be required
under state securities or “blue sky” laws;
(k) the execution, delivery and performance of this Agreement, and the issuance and sale of
the Securities and compliance with the terms and provisions thereof will not result in a breach
or violation of any of the terms and provisions of, or constitute a default under, (i) any
statute, any rule, regulation or order of any governmental agency or body or any court, domestic
or foreign, having jurisdiction over the Company or any Significant Subsidiary or any of their
properties, (ii) any agreement or instrument to which the Company or any Significant Subsidiary
is a party or by which the Company or any Significant Subsidiary is bound or to which any of the
properties of the Company or any Significant Subsidiary is subject, except for such breach,
violation or default which would not individually or in the aggregate have a Material Adverse
Effect, or (iii) the chartering document or by-laws of the Company or any Significant Subsidiary;
and the Company has full power and authority (corporate and other) to authorize, issue and sell
the Securities as contemplated by this Agreement;
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(l) this Agreement has been duly authorized, executed and delivered by the Company;
(m) except as disclosed in the Pricing Disclosure Package and except for such failure that
would not individually or in the aggregate have a Material Adverse Effect, the Company and its
subsidiaries have good and marketable title to all real properties and all other properties and
assets owned by them, in each case free from liens, encumbrances, claims and defects that would
affect the value thereof or interfere with the use made or to be made thereof by them; and except
as disclosed in the Pricing Disclosure Package and except for such failure that would not
individually or in the aggregate have a Material Adverse Effect, the Company and its subsidiaries
hold all leased real or personal property under valid and enforceable leases with no exceptions
that would interfere with the use made or to be made thereof by them;
(n) the Company and its subsidiaries possess adequate certificates, authorities or permits
issued by appropriate governmental agencies or bodies necessary to conduct the business now
operated by them, except as disclosed in the Pricing Disclosure Package and where the failure to
so possess would not individually or in the aggregate have a Material Adverse Effect, and have
not received any notice of proceedings relating to the revocation or modification of any such
certificate, authority or permit that would individually or in the aggregate have a Material
Adverse Effect;
(o) except as disclosed in the Pricing Disclosure Package, there are no pending actions,
suits or proceedings against or affecting the Company, any of its subsidiaries, or any of their
respective properties that would individually or in the aggregate have a Material Adverse Effect,
or would materially and adversely affect the ability of the Company to perform its obligations
under this Agreement; and no such actions, suits or proceedings are, to the Company’s knowledge,
threatened in writing or, to the Company’s knowledge, contemplated;
(p) (1) 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
are in compliance with all terms and conditions of any such permit, license or approval; except
in each of case (i) or (ii) as disclosed in the Pricing Disclosure Package and where any such
noncompliance or failure would not, individually or in the aggregate, have a Material Adverse
Effect; and (2) except as disclosed in the Pricing Disclosure Package, 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;
(q) the Company and its subsidiaries are in compliance with any provisions of the Employee
Retirement Income Security Act of 1974, as amended, (“ERISA”) or the rules and regulations
promulgated thereunder, except as disclosed in the Pricing Disclosure Package and where such
noncompliance would not, individually or in the aggregate, have a Material Adverse Effect;
(r) the financial statements of the Company (including the related notes and supporting
schedules) included or incorporated by reference in the Pricing Disclosure Package present fairly
the financial position of the Company, and its consolidated subsidiaries as of the dates shown
and their results of operations and cash flows for the periods shown in such financial
statements, and, except as otherwise disclosed in the Pricing Disclosure Package, such financial
statements have been prepared in conformity with the generally accepted accounting principles in
the United States applied on a consistent basis;
(s) except as disclosed in the Pricing Disclosure Package, since the date of the latest
financial statements included or incorporated by reference in the Pricing Disclosure Package
there has been no material adverse change, nor any development or event involving a prospective
material adverse change, in the condition (financial or other), business, properties or results
of operations of the Company and its subsidiaries taken as a whole and, except as disclosed in or
contemplated by the Pricing Disclosure Package, there has been no dividend or distribution of any
kind declared, paid or made by the Company on any class of its capital stock, and, except as
disclosed in or contemplated by the Pricing Disclosure Package, there has not been any
material change in the capital stock or long term debt of the Company and its subsidiaries;
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(t) the Company is not and, after giving effect to the issuance of the Securities and the
application of the proceeds thereof, as described in the Pricing Disclosure Package, will not be
an “investment company” as defined in the United States Investment Company Act of 1940, as
amended;
(u) the Company, on a consolidated basis, has insurance covering its properties, operations,
personnel and businesses, which insurance is in amounts and insures against such losses and risks
as are prudent and customary in the business in which the Company and its consolidated
subsidiaries are engaged except as disclosed in the Pricing Disclosure Package and as would not,
individually or in the aggregate, have a Material Adverse Effect. The Company has not received
notice from any insurer or agent of such insurer that capital improvements or other expenditures
are required or necessary to be made in order to continue such insurance;
(v) none of the proceeds of the sale of the Securities will be used, directly or indirectly,
for any purpose which would violate Regulation U of the Federal Reserve Board;
(w) prior to the date hereof, neither the Company nor any of its affiliates has taken any
action which is designed to or which has constituted or which could reasonably be expected to
cause or result in unlawful stabilization or manipulation of the price of any security of the
Company in connection with the offering of the Securities;
(x) the statements set forth in the Pricing Prospectus and the Prospectus under the captions
“Description of Series R Preferred Stock” and “Description of Capital Stock,” insofar as they
purport to constitute a summary of the terms of the Securities, and under the caption “Certain
U.S. Federal Income Tax Considerations,” insofar as they purport to describe the provisions of
the laws and documents referred to therein, are accurate, complete and fair in all material
respects;
(y) the Company maintains (i) internal controls over financial reporting as defined in Rule
13a-15 under the Exchange Act that comply with the requirements of the Exchange Act and have been
designed by, or under the supervision of, their respective principal executive and principal
financial officers, or persons performing similar functions, 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 and that are
adequate and effective and designed to ensure that material information relating to the Company
and its Significant Subsidiaries is made known to its chief executive officer and chief financial
officer by others within those entities, and (ii) a system of internal accounting controls
sufficient to provide reasonable assurance that (A) transactions are executed in accordance with
the management’s general or specific authorizations; (B) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally accepted accounting
principles and to maintain asset accountability; (C) access to assets is permitted only in
accordance with management’s general or specific authorization; and (D) the recorded
accountability for assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences;
(z) (1) the Company and its subsidiaries maintain an effective system of disclosure controls
and procedures as defined in Rule 13a-15(e) of the Exchange Act that is designed to ensure that
information required to be disclosed by the Company in reports that it files or submits under the
Exchange Act is recorded, processed, summarized and reported within the time periods specified in
the Commission’s rules and forms; and (2) since the date of the latest audited financial
statements included or incorporated by reference in the Pricing Disclosure Package, the Company
has not become aware of any fraud, whether or not material, that involves management or other
employees who have a significant role in the Company’s internal control over financial reporting;
(aa) Deloitte & Touche LLP, whose report on the consolidated financial statements of the
Company and its subsidiaries is included or incorporated by reference in the Registration
Statement, the Pre-Pricing Prospectuses and the Prospectus, are independent registered public
accountants as required by the Act and by the rules of the Public Company Accounting Oversight
Board;
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(bb) the operations of the Company and its subsidiaries are and have been conducted at all
times in material compliance with all applicable financial recordkeeping and reporting
requirements, including those of the Currency and Foreign Transactions Reporting Act of 1970, as
amended by Title III of the Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act), the money laundering
statutes of all jurisdictions, the rules and regulations thereunder and any related or similar
rules, regulations or guidelines, issued, administered or enforced by any governmental agency
(collectively, the “Money Laundering Laws”); and no action, suit or proceeding by or before any
court or governmental agency, authority or body or any arbitrator or non-governmental authority
involving the Company or any of its subsidiaries with respect to the Money Laundering Laws is
pending or, to the Company’s knowledge, threatened; except in each case as disclosed in the
Pricing Disclosure Package;
(cc) neither the Company nor any of its subsidiaries nor, to the knowledge of the Company,
any director, officer, agent or employee of the Company or any of its subsidiaries is currently
subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S.
Treasury Department (“OFAC”); and the Company will not directly or indirectly use the proceeds of
the offering of the Securities contemplated hereby, or lend, contribute or otherwise make
available such proceeds to any subsidiary, joint venture partner or other person or entity for
the purpose of financing the activities of any person currently subject to any U.S. sanctions
administered by OFAC;
(dd) neither the Company nor any of its subsidiaries nor, to the knowledge of the Company,
any director, officer or employee of the Company or of any of its subsidiaries is aware of or has
taken any action, directly or indirectly, that would result in a violation by such persons of the
Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (the
“FCPA”), including, without limitation, taking any action in furtherance of an offer, payment,
promise to pay, or authorization or approval of the payment or giving of money, property, gift or
anything else of value, directly or indirectly, to any “foreign official” (as such term is
defined in the FCPA) or to any foreign political party or official thereof or any candidate for
foreign political office in contravention of the FCPA;
(ee) the Company has not received any notice from the NYSE regarding the delisting of its
Common Stock from the NYSE; and
(ff) to the Company’s knowledge, there are no affiliations or associations between (i) any
member of the Financial Industry Regulatory Authority (“FINRA”) and (ii) the Company or any of
the Company’s officers, directors or 5% or greater security holders or any beneficial owner of
the Company’s unregistered equity securities that were acquired at any time on or after the 180th
day immediately preceding the date the Registration Statement was initially filed with the
Commission, except as disclosed in the Registration Statement (excluding the exhibits thereto),
the Pre-Pricing Prospectuses and the Prospectus and except that Wm Financial Services Inc. and
WaMu Capital Corp., each subsidiaries of the Company, are registered broker-dealers.
In addition, any certificate signed by any officer of the Company or any of its subsidiaries
and delivered to the Underwriters or counsel for the Underwriters in connection with the offering
of the Securities shall be deemed to be a representation and warranty by the Company, as to matters
covered thereby, to each Underwriter.
4. Certain Covenants of the Company. The Company hereby agrees:
(a) to furnish such information as may be required and otherwise to cooperate in qualifying
the Securities for offering and sale under the securities or blue sky laws of such states or
other jurisdictions as you may reasonably designate and to maintain such qualifications in effect
so long as you may request for the distribution of the Securities; provided, however, that the
Company shall not be required to qualify as a foreign corporation or to consent to the service of
process under the laws of any such jurisdiction (except service of process with respect to the
offering and sale of the Securities); and to advise you promptly of the receipt by the Company of
any notification with respect to the suspension of the qualification of the Securities for offer
or sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose;
8
(b) to prepare the Prospectus in a form approved by you and to file such Prospectus pursuant
to Rule 424(b) under the Act not later than the Commission’s close of business on the second
business day following the date of this Agreement; to make no further amendment or any supplement
to the Registration Statement, the
Basic Prospectus or the Prospectus prior to the Time of Purchase that shall be disapproved
by you promptly after reasonable notice thereof; to advise you, promptly after it receives notice
thereof, of the time when any amendment to the Registration Statement has been filed or becomes
effective or any amendment or supplement to the Prospectus has been filed and to furnish you with
copies thereof; to prepare a final term sheet, containing solely a description of the Securities,
in the form set forth in Schedule C hereto and to file such term sheet pursuant to Rule 433(d)
under the Act within the time required by such Rule; to file promptly all other material required
to be filed by the Company with the Commission pursuant to Rule 433(d) under the Act;
(c) to make available to the Underwriters in New York City, as soon as practicable after
this Agreement becomes effective, and thereafter from time to time to furnish to the
Underwriters, as many copies of the Prospectus (or of the Prospectus as amended or supplemented
if the Company shall have made any amendments or supplements thereto after the effective date of
the Registration Statement) as the Underwriters may reasonably request for the purposes
contemplated by the Act;
(d) if, at the time this Agreement is executed and delivered, it is necessary for a
post-effective amendment to the Registration Statement to be filed with the Commission and become
effective before the Securities may be sold, the Company will use its best efforts to cause such
post-effective amendment or such Registration Statement to be filed and become effective, and
will pay any applicable fees in accordance with the Act, as soon as possible; and the Company
will advise you promptly and, if requested by you, will confirm such advice in writing, (i) when
such post-effective amendment or such Registration Statement has become effective, and (ii) if
Rule 430A under the Act is used, when the Prospectus is filed with the Commission pursuant to
Rule 424(b) under the Act (which the Company agrees to file in a timely manner in accordance with
such Rules);
(e) if, at any time during the period when a prospectus is required by the Act to be
delivered (whether physically or through compliance with Rule 172 under the Act or any similar
rule) in connection with the offering and sale of Securities, the Registration Statement shall
cease to comply with the requirements of the Act with respect to eligibility for the use of the
form on which the Registration Statement was filed with the Commission or the Registration
Statement shall cease to be an “automatic shelf registration statement” (as defined in Rule 405
under the Act) or the Company shall have received, from the Commission, a notice, pursuant to
Rule 401(g)(2), of objection to the use of the form on which the Registration Statement was filed
with the Commission, to (i) notify you promptly, (ii) file promptly with the Commission a new
registration statement under the Act relating to the Securities, or a post-effective amendment to
the Registration Statement, which new registration statement or post-effective amendment shall
comply with the requirements of the Act and shall be in a form satisfactory to you, (iii) use its
best efforts to cause such new registration statement or post-effective amendment to become
effective under the Act as soon as practicable, (iv) promptly notify you of such effectiveness
and (v) take all other action necessary or appropriate to permit the public offering and sale of
the Securities to continue as contemplated in the Prospectus (in each case at the Company’s
expense at any time up to nine months after the date hereof, and at the expense of the
Underwriters thereafter); all references herein to the Registration Statement shall be deemed to
include each such new registration statement or post-effective amendment, if any;
(f) if the third anniversary of the initial effective date of the Registration Statement
(within the meaning of Rule 415(a)(5) under the Act) shall occur at any time during the period
when a prospectus is required by the Act to be delivered (whether physically or through
compliance with Rule 172 under the Act or any similar rule) in connection with the offering and
sale of Securities, to file with the Commission, prior to such third anniversary, a new
registration statement under the Act relating to the Securities, which new registration statement
shall comply with the requirements of the Act (including, without limitation, Rule 415(a)(6)
under the Act) and shall be in a form satisfactory to you; such new registration statement shall
constitute an “automatic shelf registration statement” (as defined in Rule 405 under the Act);
provided, however, that if the Company is not then eligible to file an “automatic shelf
registration statement” (as defined in Rule 405 under the Act), then such new registration
statement need not constitute an “automatic shelf registration statement” (as defined in Rule 405
under the Act), but the Company shall use its best efforts to cause such new registration
statement to become effective under the Act as soon as practicable, but in any event within 180
days after such third anniversary and promptly notify you of such effectiveness; the Company
shall take all other action necessary or appropriate to permit the public offering and sale of
the Securities to continue as contemplated in the Prospectus; all references herein to the
Registration Statement shall be deemed to include each such new registration statement, if any;
provided, that at any action required to be taken by the Company pursuant to this paragraph shall
be at the Company’s expense at any time up to nine months after the date hereof, and at the
expense of the Underwriters thereafter;
9
(g) to advise you promptly, confirming such advice in writing, of any request by the
Commission for amendments or supplements to the Registration Statement, any Pre-Pricing
Prospectus, the Prospectus or any Permitted Free Writing Prospectus or for additional information
with respect thereto, or of notice of institution of proceedings for, or the entry of a stop
order, suspending the effectiveness of the Registration Statement and, if the Commission should
enter a stop order suspending the effectiveness of the Registration Statement, to use the
Company’s best efforts to obtain the lifting or removal of such order as soon as possible; to
advise you promptly of any proposal to amend or supplement the Registration Statement, any
Pre-Pricing Prospectus or the Prospectus, and to provide you and Underwriters’ counsel copies of
any such documents (other than amendments consisting solely of one or more reports, statements or
other documents to be filed by the Company pursuant to Section 13, 14 or 15(d) of the Exchange
Act) for review and comment a reasonable amount of time prior to any proposed filing and to file
no such amendment or supplement to which you shall object in writing;
(h) subject to Section 4(g) hereof, to file promptly all reports and documents and any
preliminary or definitive proxy or information statement required to be filed by the Company with
the Commission in order to comply with the Exchange Act for so long as a prospectus is required
by the Act to be delivered (whether physically or through compliance with Rule 172 under the Act
or any similar rule) in connection with any sale of Securities;
(i) to pay the fees applicable to the Registration Statement in connection with the offering
of the Securities within the time required by Rule 456(b)(1)(i) under the Act (without reliance
on the proviso to Rule 456(b)(1)(i) under the Act) and in compliance with Rule 456(b) and Rule
457(r) under the Act;
(j) to advise the Underwriters promptly of the happening of any event within the period
during which a prospectus is required by the Act to be delivered (whether physically or through
compliance with Rule 172 under the Act or any similar rule) in connection with the offering and
sale of the Securities, which event could require the making of any change in the Prospectus then
being used so that the Prospectus would not include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein, in the light of
the circumstances under which they are made, not misleading, and to advise the Underwriters
promptly if, during such period, it shall become necessary to amend or supplement the Prospectus
to cause the Prospectus to comply with the requirements of the Act, and, in each case, during
such time, subject to Section 4(g) hereof, promptly to prepare and furnish, (at the Company’s
expense at any time up to nine months after the date hereof, and at the expense of the
Underwriters thereafter) to the Underwriters such amendments or supplements to the Prospectus as
may be necessary to reflect any such change or to effect such compliance;
(k) to make generally available to its security holders, and to deliver to you, an earnings
statement of the Company (which will satisfy the provisions of Section 11(a) of the Act) covering
a period of twelve months beginning after the effective date of the Registration Statement (as
defined in Rule 158(c) under the Act) as soon as is reasonably practicable after the termination
of such twelve-month period;
(l) to furnish to you two copies of the Registration Statement, as initially filed with the
Commission, and of all amendments thereto (including all exhibits thereto and documents
incorporated by reference therein) and sufficient copies of the foregoing (other than exhibits)
for distribution of a copy to each of the other Underwriters, in each case only to the extent
such documents are not publicly available on the Commission’s XXXXX database;
(m) to apply the net proceeds from the sale of the Securities in the manner set forth under
the caption “Use of Proceeds” in the Prospectus Supplement;
(n) to pay all costs, expenses, fees and taxes in connection with (i) the preparation and
filing of the Registration Statement, each Basic Prospectus, each Pre-Pricing Prospectus, the
Prospectus Supplement, the Prospectus, each Permitted Free Writing Prospectus and any amendments
or supplements thereto, and the printing and furnishing of copies of each thereof to the
Underwriters and to dealers (including costs of mailing and shipment), (ii) (A) the registration,
issue, sale and delivery of the Securities to the Underwriters, including any stock or transfer
taxes and stamp or similar duties payable upon issuance of the Securities or the sale, issuance
or delivery of the Securities to the Underwriters, and (B) the issue and delivery of the shares
of Common Stock issuable upon conversion of the Securities, (iii) the producing, word processing
and/or printing of this Agreement, any agreement among Underwriters, any dealer agreements, any
powers of attorney and any closing
10
documents (including compilations thereof) and the reproduction and/or printing and
furnishing of copies of each thereof to the Underwriters and (except closing documents) to
dealers (including costs of mailing and shipment), (iv) the qualification of the Securities for
offering and sale under state or foreign laws and the determination of their eligibility for
investment under state or foreign law (including the reasonable legal fees and filing fees and
other disbursements of counsel for the Underwriters) and the printing and furnishing of copies of
any blue sky surveys or legal investment surveys to the Underwriters and to dealers, (v) any
listing of the Securities or the Common Stock issuable upon conversion of the Securities on any
securities exchange or qualification of the Securities or such Common Stock, as applicable, for
quotation on the NYSE and any registration thereof under the Exchange Act, (vi) any filing for
review of the public offering of the Securities by FINRA, including the legal fees and filing
fees and other disbursements of counsel to the Underwriters relating to FINRA matters, (vii) the
fees and disbursements of any transfer agent or registrar for the Securities or the Common Stock
issuable upon conversion of the Securities, (viii) the costs and expenses of the Company relating
to presentations or meetings undertaken in connection with the marketing of the offering and sale
of the Securities to prospective investors and the Underwriters’ sales forces, including, without
limitation, expenses associated with the production of road show slides and graphics, fees and
expenses of any consultants engaged in connection with the road show presentations, travel,
lodging and other expenses incurred by the officers of the Company and any such consultants, and
the cost of any aircraft chartered in connection with the road show and (ix) the performance of
the Company’s other obligations hereunder. It is understood, however, that except as provided in
this Section, and Sections 5 and 9, the Underwriters will pay all of their own costs and
expenses, including the fees of their counsel, transfer taxes on resale of any of the Securities
by them, and any advertising expenses connected with any offers they make;
(o) with respect to the offering of the Securities to comply with Rule 433(d) under the Act
(without reliance on Rule 164(b) under the Act) and with Rule 433(g) under the Act;
(p) that, beginning on the date hereof and ending on, and including the date that is 60 days
after the date of the Prospectus Supplement (the “Lock-Up Period”), and subject to certain
exceptions, without the prior written consent of each of Xxxxxx Brothers and Xxxxxx Xxxxxxx, the
Company shall not directly or indirectly (1) issue, offer for sale, sell, pledge, or otherwise
dispose of (or enter into any transaction or device that is designed to, or could be expected to,
result in the disposition by any person at any time in the future of) any shares of Preferred
Stock or Common Stock or securities convertible into or exercisable or exchangeable for Preferred
Stock or Common Stock, (2) enter into any swap or other derivatives transaction that transfers to
another, in whole or in part, any of the economic consequences of ownership of Preferred Stock or
Common Stock, (3) file or cause to be filed a registration statement, including any amendments
thereto, with respect to the registration of any shares of Preferred Stock, Common Stock or
securities convertible, exercisable or exchangeable into Preferred Stock or Common Stock or any
of the Company’s other securities, or (4) publicly disclose the intention to do any of the
foregoing; provided, however, that the foregoing provisions of this Subsection 4(p) shall not
apply to (x) the Securities to be sold hereunder, (y) the issuance by the Company of Common Stock
upon the exercise of an option or warrant or the conversion of a security outstanding on the date
hereof, (z) the issuance by the Company of Common Stock or securities convertible into or
exercisable or exchangeable for Common Stock pursuant to employee benefit plans, stock incentive
plans or other employee compensation plans existing on the date hereof; notwithstanding the
foregoing, if (i) during the last 17 days of the Lock-Up Period, the Company issues an earnings
release or material news or a material event relating to the Company occurs, or (ii) prior to the
expiration of the Lock-Up Period, the Company announces that it will release earnings results
during the 16-day period beginning on the last day of the Lock-Up Period, then the restrictions
imposed in this Subsection 4(p) shall continue to apply until the expiration of the 18-day period
beginning on the issuance of the earnings release or the announcement of the material news or the
occurrence of the material event, unless Xxxxxx Brothers and Xxxxxx Xxxxxxx waive such extension
in writing;
(q) to cause all of the Company’s directors and executive officers to furnish to you, prior
to the Closing Date, a letter or letters, substantially in the form of Exhibit D hereto (the
“Lock-Up Agreements”);
(r) not, at any time at or after the execution of this Agreement, directly or indirectly, to
offer or sell any Securities by means of any “prospectus” (within the meaning of the Act), or use
any “prospectus” (within the meaning of the Act) in connection with the offer or sale of the
Securities, in each case other than the Prospectus;
11
(s) not to, and to cause each of its direct and indirect subsidiaries not to, take, directly
or indirectly, any action designed, or which will constitute, or has constituted, or might
reasonably be expected to cause or result in the unlawful stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the Securities;
(t) to reserve and keep available at all times, free of preemptive rights, shares of Common
Stock for the purpose of enabling the Company to satisfy any obligations to issue shares of
Common Stock upon conversion of the Securities;
(u) to use its best efforts to cause the Securities and the Common Stock issuable upon
conversion of the Securities to be listed on the NYSE and to maintain such listings on the NYSE;
and
(v) to maintain a transfer agent and, if necessary under the jurisdiction of incorporation
of the Company, a registrar for the Securities.
5. Reimbursement of Underwriters’ Expenses. If the Securities are not delivered for any reason
other than the termination of this Agreement pursuant to the fifth paragraph of Section 8 hereof or
the default by one or more of the Underwriters in its or their respective obligations hereunder,
the Company shall, in addition to paying the amounts described in Section 4(n) hereof, reimburse
the Underwriters for all of their reasonably incurred out-of-pocket expenses, including the fees
and disbursements of their counsel.
6. Conditions of Underwriters’ Obligations. The several obligations of the Underwriters
hereunder are subject to the accuracy of the representations and warranties on the part of the
Company on the date hereof and at the Time of Purchase, and to the following additional conditions
precedent:
(a) The Company shall furnish to you at the Time of Purchase, an opinion of Xxxxxxx X. Xxxxx
III, First Vice President and Senior Counsel of the Company, addressed to the Underwriters, and
dated the Time of Purchase, with executed copies for each of the other Underwriters, and in form
and substance satisfactory to Xxxxxx Brothers and Xxxxxx Xxxxxxx, substantially in the form set
forth in Exhibit A hereto.
(b) The Company shall furnish to you at the Time of Purchase, an opinion and a disclosure
letter of Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, counsel for the Company, each addressed to the
Underwriters, and dated the Time of Purchase, with executed copies for each of the other
Underwriters, and in form and substance satisfactory to Xxxxxx Brothers and Xxxxxx Xxxxxxx,
substantially in the forms set forth in Exhibit B-1 and Exhibit B-2 hereto.
(c) You shall have received from Deloitte & Touche LLP letters dated, respectively, the date
of this Agreement and the Time of Purchase and addressed to the Underwriters (with executed
copies for each of the Underwriters) in the forms satisfactory to Xxxxxx Brothers and Xxxxxx
Xxxxxxx, which letters shall cover, without limitation, the various financial disclosures
contained in the Registration Statement, the Pricing Prospectus, the Prospectus and the Permitted
Free Writing Prospectuses, if any.
(d) You shall have received at the Time of Purchase, the favorable opinion of Xxxxx Xxxx &
Xxxxxxxx, counsel for the Underwriters, dated the Time of Purchase, in form and substance
reasonably satisfactory to Xxxxxx Brothers and Xxxxxx Xxxxxxx.
(e) No Prospectus or amendment or supplement to the Registration Statement or the Prospectus
shall have been filed to which you shall have objected in writing.
(f) The Registration Statement shall have been filed and shall have become effective under
the Act. The Prospectus Supplement shall have been filed with the Commission pursuant to Rule
424(b) under the Act before 5:30 P.M., New York City time, on the second full business day after
the date of this Agreement (or such earlier time as may be required under the Act).
12
(g) Prior to and at the Time of Purchase, (i) no stop order with respect to the
effectiveness of the Registration Statement shall have been issued under the Act or proceedings
initiated under Section 8(d) or 8(e) of the Act; (ii) the Registration Statement and all
amendments thereto shall 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; (iii) the Prospectus, and all amendments or
supplements thereto, shall not include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of the
circumstances under which they are made, not misleading; (iv) neither the Pricing Disclosure
Package, nor any amendment or supplement thereto, shall include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they are made, not misleading; and (v) none of the
Permitted Free Writing Prospectuses, if any, when read together with the Pricing Disclosure
Package shall include an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the circumstances under which
they are made, not misleading.
(h) The Company will, at the Time of Purchase, deliver to you a certificate of its Chief
Executive Officer, President, or any Executive Vice President and its Chief Financial Officer,
Treasurer or Controller dated the Closing Date, in the form attached as Exhibit C hereto.
(i) The Company shall have furnished to you such other documents and certificates as to the
accuracy and completeness of any statement in the Registration Statement, the Pricing Prospectus,
the Prospectus or any Permitted Free Writing Prospectus as of the Time of Purchase as you may
reasonably request.
(j) The Lock-Up Agreements, each substantially in the form of Exhibit D hereto, between you
and each director and executive officer of the Company relating to sales and certain other
dispositions of shares of Common Stock or certain other securities, delivered to you on or before
the date hereof, shall be in full force and effect on the Closing Date.
(k) The Securities shall have been approved for listing on the NYSE, subject only to notice
of issuance at or prior to the Time of Purchase.
(l) FINRA shall not have raised any objection with respect to the fairness or reasonableness
of the underwriting, or other arrangements of the transactions, contemplated hereby.
7. Effective Date of Agreement; Termination. This Agreement shall become effective when the
parties hereto have executed and delivered this Agreement.
The obligations of the several Underwriters hereunder shall be subject to termination in your
absolute discretion, if (1) since the time of execution of this Agreement or the earlier respective
dates as of which information is given in the Registration Statement, the Pricing Prospectus, the
Prospectus and the Permitted Free Writing Prospectuses, if any, there has been any change or any
development involving a prospective change in the business, properties, management, financial
condition or results of operations of the Company and its consolidated subsidiaries taken as a
whole, otherwise than as set forth or contemplated in the Registration Statement, Pricing
Prospectus, the Prospectus or the Permitted Free Writing Prospectuses, the effect of which change
or development, in your sole judgment, makes it impractical or inadvisable to proceed with the
public offering or the delivery of the Securities on the terms and in the manner contemplated in
the Registration Statement, the Pricing Prospectus, the Prospectus and the Permitted Free Writing
Prospectuses, if any, or (2) since the time of execution of this Agreement, there shall have
occurred: (A) a suspension or material limitation in trading in securities generally on the NYSE,
the American Stock Exchange or the NASDAQ; (B) a suspension or material limitation in trading in
the Company’s securities on the NYSE; (C) a material disruption in securities settlement, payment
or clearance services in the United States; (D) a general moratorium on commercial banking
activities declared by either federal or New York State authorities; (E) an outbreak or escalation
of hostilities or acts of terrorism involving the United States or a declaration by the United
States of a national emergency or war; or (F) any other calamity or crisis or any change in
financial, political or economic conditions or financial markets in the United States or elsewhere,
if the effect of any such event specified in clause (E) or (F), in your sole judgment, makes it
impractical or inadvisable to proceed with the public offering or the delivery of the Securities on
the terms and in the manner contemplated in the Registration Statement, the Pricing Prospectus, the
Prospectus and the Permitted Free Writing Prospectuses, if any, or (3) since the time of execution
of this Agreement, there shall have occurred any downgrading, or any notice or announcement shall
have been given or made of: (A) any intended or potential downgrading or (B) any watch, review or
possible change that does not indicate an affirmation or improvement in the rating accorded any
securities of or guaranteed
by the Company or any of its subsidiaries by any “nationally recognized statistical rating
organization”, as that term is defined in Rule 436(g)(2) under the Act.
13
If you elect to terminate this Agreement as provided in this Section 7, the Company and each
other Underwriter shall be notified promptly in writing.
If the sale to the Underwriters of the Securities, as contemplated by this Agreement, is not
carried out by the Underwriters for any reason permitted under this Agreement, or if such sale is
not carried out because the Company shall be unable to comply with any of the terms of this
Agreement, the Company shall not be under any obligation or liability under this Agreement (except
to the extent provided in Sections 4(n), 5 and 9 hereof), and the Underwriters shall be under no
obligation or liability to the Company under this Agreement (except to the extent provided in
Section 9 hereof) or to one another hereunder.
8. Increase in Underwriters’ Commitments. Subject to Sections 6 and 7 hereof, if, on the
Closing Date or an Option Closing Date, any Underwriter shall default in its obligation to take up
and pay for the Securities to be purchased by it hereunder on such date (otherwise than for a
failure of a condition set forth in Section 6 hereof or a reason sufficient to justify the
termination of this Agreement under the provisions of Section 7 hereof) and if the number of
Securities which all Underwriters so defaulting shall have agreed but failed to take up and pay for
does not exceed 10% of the total number of Securities to be purchased on such date, the
non-defaulting Underwriters (including the Underwriters, if any, substituted in the manner set
forth below) shall take up and pay for (in addition to the aggregate number of Securities they are
obligated to purchase pursuant to Section 1 hereof) the number of Securities agreed to be purchased
on such date by all such defaulting Underwriters, as hereinafter provided. Such Securities shall be
taken up and paid for by such non-defaulting Underwriters in such amount or amounts as you may
designate with the consent of each Underwriter so designated or, in the event no such designation
is made, such Securities shall be taken up and paid for by all non-defaulting Underwriters pro rata
in proportion to the aggregate number of Securities set forth opposite the names of such
non-defaulting Underwriters in Schedule A. In no event shall the number of Securities that any
Underwriter has agreed to purchase pursuant to this Agreement be increased pursuant to this Section
8 by an amount in excess of one-ninth of such number of Securities without the written consent of
such Underwriter.
Without relieving any defaulting Underwriter from its obligations hereunder, the Company
agrees with the non-defaulting Underwriters that it will not sell any Securities hereunder unless
all of the Securities are purchased by the Underwriters (or by substituted Underwriters selected by
you with the approval of the Company or selected by the Company with your approval).
If a new Underwriter or Underwriters are substituted by the Underwriters or by the Company for
a defaulting Underwriter or Underwriters in accordance with the foregoing provision, the Company or
you shall have the right to postpone the Time of Purchase for a period not exceeding five business
days in order that any necessary changes in the Registration Statement and the Prospectus and other
documents may be effected.
The term “Underwriter” as used in this Agreement shall refer to and include any Underwriter
substituted under this Section 8 with like effect as if such substituted Underwriter had originally
been named in Schedule A hereto.
If, on the Closing Date, the aggregate number of Securities which the defaulting Underwriter
or Underwriters agreed to purchase exceeds 10% of the total number of Securities which all
Underwriters agreed to purchase hereunder, and if neither the non-defaulting Underwriters nor the
Company shall make arrangements within the five business day period stated above for the purchase
of all the Securities which the defaulting Underwriter or Underwriters agreed to purchase
hereunder, this Agreement shall terminate without further act or deed and without any liability on
the part of the Company to any Underwriter and without any liability on the part of any
non-defaulting Underwriter to the Company. Nothing in this paragraph, and no action taken
hereunder, shall relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
9. Indemnity and Contribution.
14
(a) The Company will indemnify and hold harmless each Underwriter against any losses,
claims, damages or liabilities, joint or several, to which such Underwriter, its partners,
directors, officers, and any person who controls any Underwriter within the meaning of Section 15
of the Act or Section 20 of the Exchange Act, may
become subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in the Registration Statement
(or in the Registration Statement as amended by any post-effective amendment thereof by the
Company) or arise out of or are based upon any omission or alleged omission to state a material
fact required to be stated therein or necessary to make the statements therein not misleading or
(ii) any untrue statement or alleged untrue statement of a material fact included in any
Prospectus (the term Prospectus for the purpose of this Section 9 being deemed to include any
Basic Prospectus, any Pre-Pricing Prospectus, the Prospectus Supplement, the Prospectus and any
amendments or supplements to the foregoing), in any Permitted Free Writing Prospectus or in any
“issuer information” (as defined in Rule 433 under the Act) of the Company which is filed or
required to be filed pursuant to Rule 433(d) under the Act, or arise out of or are based upon any
omission or alleged omission 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, and will
reimburse each Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such action or claim as such
expenses are incurred; provided, however, that the Company shall not be liable in any such case
to the extent that any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission made in the
Registration Statement, Prospectus, Permitted Free Writing Prospectus or any amendment or
supplement thereto in reliance upon and in conformity with written information furnished to the
Company by or on behalf of an Underwriter expressly for use therein.
(b) Each Underwriter, severally and not jointly, will indemnify and hold harmless the
Company, its directors and officers, and any person who controls the Company within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act, against any losses, claims, damages
or liabilities to which the Company or any such person may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon (i) any untrue statement or alleged untrue statement of a material
fact contained in, and in conformity with information concerning such Underwriter furnished in
writing by or on behalf of such Underwriter through you to the Company, as identified in Section
10, expressly for use in, the Registration Statement (or in the Registration Statement as amended
by any post-effective amendment thereof by the Company), or arise out of or are based upon any
omission or alleged omission to state a material fact in such Registration Statement in
connection with such information, which material fact was not contained in such information and
which material fact was required to be stated in such Registration Statement or was necessary to
make such information not misleading or (ii) any untrue statement or alleged untrue statement of
a material fact contained in, and in conformity with information concerning such Underwriter
furnished in writing by or on behalf of such Underwriter through you to the Company, as
identified in Section 10, expressly for use in, a Prospectus or a Permitted Free Writing
Prospectus, or arise out of or are based upon any omission or alleged omission to state a
material fact in such Prospectus or Permitted Free Writing Prospectus in connection with such
information, which material fact was not contained in such information and which material fact
was necessary in order to make the statements in such information, in the light of the
circumstances under which they were made, not misleading, and will reimburse the Company for any
legal or other expenses reasonably incurred by the Company in connection with investigating or
defending any such action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a) or (b) above of
notice of the commencement of any action, proceeding, or government investigation (each a
“Proceeding”), such indemnified party shall, if a claim in respect thereof is to be made against
the indemnifying party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall not relieve it
from any liability which it may have to any indemnified party otherwise than under such
subsection. The indemnifying party, upon request of the indemnified party, shall retain counsel
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 1) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of such counsel or 2) 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 counsel would be
inappropriate due to actual or potential differing interests between them. No indemnifying party
shall, without the written consent of the indemnified party, effect the settlement or compromise
of, or consent to the entry of any judgment with
respect to, any pending or threatened action or claim in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement, compromise or judgment (i)
includes an unconditional release of the indemnified party from all liability arising out of such
action or claim and (ii) does not include a statement as to, or an admission of, fault,
culpability or a failure to act, by or on behalf of any indemnified party.
15
(d) If the indemnification provided for in this Section 9 is unavailable to or insufficient
to hold harmless an indemnified party under subsection (a) or (b) above in respect of any losses,
claims, damages or liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriters on the other from the offering of the Securities. If, however, the
allocation provided by the immediately preceding sentence is not permitted by applicable law or
if the indemnified party failed to give the notice required under subsection (c) above, then each
indemnifying party shall contribute to such amount paid or payable by such indemnified party in
such proportion as is appropriate to reflect not only such relative benefits but also the
relative fault of the Company on the one hand and the Underwriters on the other in connection
with the statements or omissions which resulted in such losses, claims, damages or liabilities
(or actions in respect thereof), as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Underwriters on the other shall
be deemed to be in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total underwriting discounts and
commissions received by the Underwriters, in each case as set forth in the Prospectus Supplement.
The relative fault shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company on the one hand or the Underwriters
on the other and the parties’ relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The Company and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this subsection (d) 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 which does not take account of the equitable considerations
referred to above in this subsection (d). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to
above in this subsection (d) shall be deemed to include 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 subsection (d), no Underwriter shall be required
to contribute any amount in excess of the amount by which the total price at which the Securities
underwritten by it and distributed to investors were offered to investors exceeds the amount of
any damages which such Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent misrepresentation. The
Underwriters’ obligations in this subsection (d) to contribute are several in proportion to their
respective underwriting obligations and not joint. The remedies provided for in this Section 9
are not exclusive and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or equity.
(e) The obligations of the Company under this Section 9 shall be in addition to any
liability which the Company may otherwise have and shall extend, upon the same terms and
conditions, to the partners, directors, and officers of each Underwriter, any affiliate of each
Underwriter, and each person, if any, who controls any Underwriter within the meaning of the Act;
and the obligations of the Underwriters under this Section 9 shall be in addition to any
liability which the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company and to each person, if any, who
controls the Company within the meaning of the Act.
(f) The indemnity and contribution provisions contained in this Section 9 and the
representations, warranties and other statements of the Company contained in this Agreement shall
remain operative and in full force and effect regardless of (i) any termination of this
Agreement, (ii) any investigation made by or on behalf of any Underwriter, any person controlling
any Underwriter or any affiliate of any Underwriter or by or on behalf of the Company or any
person controlling the Company and (iii) acceptance of and payment for any of the Securities.
16
10. Information Furnished by the Underwriters. The statements set forth in the second
paragraph (excluding any tables) under the caption “Underwriting — Commissions and Expenses” in the
Prospectus Supplement and the statements set forth under the caption “Underwriting — Stabilization,
Short Positions and Penalty Bids”, in each case only insofar as such statements relate to the
amount of selling concession and reallowance or to stabilization activities that may be undertaken
by the Underwriters, constitute the only information furnished by or on behalf of the Underwriters
through you as the representatives, as such information is referred to in Sections 3 and 9 hereof.
11. Notices. Except as otherwise herein provided, all statements, requests, notices and
agreements shall be in writing or by telegram or facsimile and, if to the Underwriters, shall be
sufficient in all respects if delivered or sent to each of (a) Xxxxxx Brothers Inc., 000 Xxxxxxx
Xxxxxx, Xxx Xxxx, XX 00000, Attention: Debt Capital Markets: Equity-Linked and Hybrid Solutions
Group (Fax: 000-000-0000), with a copy to the General Counsel at the same address, (b) Xxxxxx
Xxxxxxx & Co. Incorporated, 0000 Xxxxxxxx, Xxx Xxxx, XX 00000, Attention: Equity Syndicate Desk,
with a copy to the Legal Department, and, if to the Company, shall be sufficient in all respects if
delivered or sent to the Company at the offices of the Company at 0000 Xxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxxxx 00000, Attention: Funding Manager, with a copy to the Company’s Legal Department at 0000
Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxxxxx X. Xxxxx.
12. Governing Law; Construction. This agreement and any claim, counterclaim or dispute of any
kind or nature whatsoever arising out of or in any way relating to this Agreement (a “Claim”),
directly or indirectly, shall be governed by, and construed in accordance with, the laws of the
State of New York. The section headings in this agreement have been inserted as a matter of
convenience of reference and are not a part of this Agreement.
13. Submission to Jurisdiction. Except as set forth below, no claim may be commenced,
prosecuted or continued in any court other than the courts of the State of New York located in the
City and County of New York or in the United States District Court for the Southern District of New
York, which courts shall have jurisdiction over the adjudication of such matters, and the Company
consents to the jurisdiction of such courts and personal service with respect thereto. The Company
hereby consents to personal jurisdiction, service and venue in any court in which any Claim arising
out of or in any way relating to this Agreement is brought by any third party against any
Underwriter or any indemnified party. Each Underwriter and the Company (on its behalf and, to the
extent permitted by applicable law, on behalf of its shareholders and affiliates) waive all right
to trial by jury in any action, proceeding or counterclaim (whether based upon contract, tort or
otherwise) in any way arising out of or relating to this Agreement. The Company agrees that a final
judgment in any such action, proceeding or counterclaim brought in any such court shall be
conclusive and binding upon the Company and may be enforced in any other courts to the jurisdiction
of which the Company is or may be subject, by suit upon such judgment.
14. Parties at Interest. The Agreement herein set forth has been and is made solely for the
benefit of the Underwriters and the Company and to the extent provided in Section 9 hereof the
controlling persons, partners, directors and officers referred to in such Section, and their
respective successors, assigns, heirs, personal representatives and executors and administrators.
No other person, partnership, association or corporation (including a purchaser, as such purchaser,
from any of the Underwriters) shall acquire or have any right under or by virtue of this Agreement.
15. No Fiduciary Relationship. The Company hereby acknowledges that the Underwriters are
acting solely as underwriters in connection with the purchase and sale of the Company’s securities.
The Company further acknowledges that the Underwriters are acting pursuant to a contractual
relationship created solely by this Agreement entered into on an arm’s length basis, and in no
event do the parties intend that the Underwriters act or be responsible as a fiduciary to the
Company, its management, stockholders or creditors or any other person in connection with any
activity that the Underwriters may undertake or have undertaken in furtherance of the purchase and
sale of the Company’s securities, either before or after the date hereof. The Underwriters hereby
expressly disclaim any fiduciary or similar obligations to the Company, either in connection with
the transactions contemplated by this Agreement or any matters leading up to such transactions, and
the Company hereby confirms its understanding and agreement to that effect. The Company and the
Underwriters agree that they are each responsible for making their own independent judgments with
respect to any such transactions and that any opinions or views expressed by the Underwriters to
the Company regarding such transactions, including, but not limited to, any opinions or views with
respect to the price or market for the Company’s securities, do not constitute advice or
recommendations to the Company. The Company hereby waives and releases, to the fullest extent
permitted by law, any claims that the Company may have against the Underwriters with respect to any
breach or alleged breach of any
fiduciary or similar duty to the Company in connection with the transactions contemplated by
this Agreement or any matters leading up to such transactions.
17
16. Research Analyst Independence. The Company acknowledges that the Underwriters’ research
analysts and research departments are required to be independent from their respective investment
banking divisions and are subject to certain regulations and internal policies, and that such
Underwriters’ research analysts may hold views and make statements or investment recommendations
and/or publish research reports with respect to the Company and/or the offering that differ from
the views of their respective investment banking divisions. The Company hereby waives and
releases, to the fullest extent permitted by law, any claims that the Company may have against the
Underwriters with respect to any conflict of interest that may arise from the fact that the views
expressed by their independent research analysts and research departments may be different from or
inconsistent with the views or advice communicated to the Company by such Underwriters’ investment
banking divisions. The Company acknowledges that each of the Underwriters is a full service
securities firm and as such from time to time, subject to applicable securities laws, may effect
transactions for its own account or the account of its customers and hold long or short positions
in debt or equity securities of the companies that may be the subject of the transactions
contemplated by this Agreement.
17. Entire Agreement. This Agreement, together with any contemporaneous written agreements and
any prior written agreements (to the extent not superseded by this Agreement) that relate to the
offering of the Securities, represent the entire agreement among the Company and the Underwriters
with respect to the preparation of the Pricing Prospectus, the Pricing Disclosure Package, the
Prospectus Supplement, the conduct of the offering, and the purchase and sale of the Securities.
18. Counterparts. This Agreement may be signed by the parties in one or more counterparts
which together shall constitute one and the same agreement among the parties.
19. Successors and Assigns. This Agreement shall be binding upon the Underwriters and the
Company and their successors and assigns and any successor or assign of any substantial portion of
the Company’s and any of the Underwriters’ respective businesses and/or assets.
[The Remainder of This Page Intentionally Left Blank; Signature Page Follows]
18
If the foregoing correctly sets forth the understanding between the Company and the several
Underwriters, please so indicate in the space provided below for that purpose, whereupon this
Agreement and your acceptance shall constitute a binding agreement between the Company and the
Underwriters, severally.
| Very truly yours, WASHINGTON MUTUAL, INC. |
||||
| By: | /s/ Xxxxxx X. Xxxxxxxx | |||
| Name: | Xxxxxx X. Xxxxxxxx | |||
| Title: | Senior Vice President | |||
Accepted and agreed to as of the date first above written, on behalf of themselves and the
other several Underwriters named in Schedule X.
| XXXXXX BROTHERS INC. |
||||
| By: | /s/ Xxxxxxx Xxxxxxx | |||
| Name: | Xxxxxxx Xxxxxxx | |||
| Title: | Senior Vice President | |||
| XXXXXX XXXXXXX & CO. INCORPORATED |
||||
| By: | /s/ Xxxx Xxxxx | |||
| Name: | Xxxx Xxxxx | |||
| Title: | Executive Director | |||
SCHEDULE A
| Number of | ||||
| Securities to Be | ||||
| Underwriter | Purchased | |||
Xxxxxx Brothers Inc. |
990,000 | |||
Xxxxxx Xxxxxxx & Co. Incorporated |
990,000 | |||
Credit Suisse Securities (USA) LLC |
300,000 | |||
Xxxxxxx, Sachs & Co. |
300,000 | |||
Barclays Capital Inc. |
60,000 | |||
Citigroup Global Markets Inc. |
60,000 | |||
Deutsche Bank Securities Inc. |
60,000 | |||
X.X. Xxxxxx Securities Inc. |
60,000 | |||
Greenwich Capital Markets, Inc. |
60,000 | |||
UBS Securities LLC |
60,000 | |||
BNY Capital Markets, Inc. |
12,000 | |||
Xxxxxxx Capital Markets, LLC |
12,000 | |||
Xxxxx, Xxxxxxxx & Xxxxx, Inc. |
12,000 | |||
Xxxxxx X. Xxxxxxx & Company, Inc. |
12,000 | |||
The Xxxxxxxx Capital Group, L.P. |
12,000 | |||
Total: |
3,000,000 | |||
SCHEDULE B
Permitted Free Writing Prospectuses
Free Writing Prospectus, dated December 11, 2007, as filed pursuant to Rule 433 under the
Securities Act.
Pricing Term Sheet, dated December 12, 2007, relating to the Shares, as filed pursuant to Rule 433
under the Securities Act.
EXHIBIT D
[FORM OF LOCK-UP AGREEMENT]
December [ ], 2007
Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
The undersigned understands that Xxxxxx Brothers Inc. (“Xxxxxx Brothers”) and Xxxxxx Xxxxxxx &
Co. Incorporated (“Xxxxxx Xxxxxxx”) propose to enter into an Underwriting Agreement (the
“Underwriting Agreement”) with Washington Mutual, Inc., a corporation organized under the laws of
the State of Washington (the “Company”), providing for the public offering (the “Public Offering”)
by the several Underwriters, including Xxxxxx Brothers and Xxxxxx Xxxxxxx (the “Underwriters”), of
3,000,000 shares of the Company’s 7.75% Series R Non-Cumulative Perpetual Convertible Preferred
Stock, no par value and liquidation preference $1,000 per share (the “Preferred Stock”) convertible
into common shares, no par value of the Company (the “Common Stock”).
To induce the Underwriters that may participate in the Public Offering to continue their
efforts in connection with the Public Offering, the undersigned hereby agrees that, without the
prior written consent of Xxxxxx Brothers and Xxxxxx Xxxxxxx on behalf of the Underwriters, it will
not, during the period commencing on the date hereof and ending on the date that is 60 days after
the date of the final prospectus relating to the Public Offering (the “Prospectus”) (1) offer,
pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or
dispose of, directly or indirectly, any shares of Preferred Stock or Common Stock or any securities
convertible into or exercisable or exchangeable for Preferred Stock or Common Stock or (2) enter
into any swap or other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the Preferred Stock or Common Stock, whether any such
transaction described in clause (1) or (2) above is to be settled by delivery of Preferred Stock or
Common Stock or such other securities, in cash or otherwise. The foregoing sentence shall not
apply to (a) transfers of shares of Common Stock or any security convertible into Common Stock as a
bona fide gift, or by will or intestacy, (b) the transfer of shares of Common Stock or any security
convertible into or exercisable or exchangeable for shares of Common Stock to a member or members
of the holder’s immediate family or to a trust, the beneficiaries of which are exclusively the
holder or a member or members of his or her immediate family, and (c) sales by any person other
than the Company pursuant to a trading plan established in accordance with Rule 10b5-1 under the
Exchange Act in existence on the date of the Underwriting Agreement; provided that in the case of
transactions described in clauses (a) and (b) above, each donee or other transferee agrees to be
subject to the restrictions on transfer described above. In addition, the undersigned agrees that,
without the prior written consent of Xxxxxx Brothers and Xxxxxx Xxxxxxx on behalf of the
Underwriters, it will not, during the period commencing on the date hereof and ending on the date
that is 60 days after the date of the Prospectus, make any demand for or exercise any right with
respect to, the registration of any shares of Common Stock or any security convertible into or
exercisable or exchangeable for Common Stock. The undersigned also agrees and consents to the
entry of stop transfer instructions with the Company’s transfer agent and registrar against the
transfer of the undersigned’s shares of Common Stock except in compliance with the foregoing
restrictions.
If (1) during the last 17 days of the restricted period the Company issues an earnings release
or material news or a material event relating to the Company occurs, or (2) prior to the expiration
of the restricted period, the Company announces that it will release earnings results during the
16-day period beginning on the last day of the restricted period, the restrictions imposed by this
agreement shall continue to apply until the expiration of the 18-day period beginning on the
issuance of the earnings release or the occurrence of the material news or material event.
For purposes of this agreement, “immediate family” shall mean any relationship by blood,
marriage or adoption, not more remote than first cousin, which, for the avoidance of doubt, shall
include nieces, nephews and grandchildren.
The undersigned shall not engage in any transaction that may be restricted by this agreement
during the 34-day period beginning on the last day of the initial restricted period unless the
undersigned requests and receives prior written confirmation from the Company or Xxxxxx Brothers
and Xxxxxx Xxxxxxx that the restrictions imposed by this agreement have expired or unless the
undersigned has received prior written notice from the Company that the lock-up period has expired.
The undersigned understands that the Company and the Underwriters are relying upon this
agreement in proceeding toward consummation of the Public Offering. The undersigned further
understands that this agreement is irrevocable and shall be binding upon the undersigned’s heirs,
legal representatives, successors and assigns.
Whether or not the Public Offering actually occurs depends on a number of factors, including
market conditions. Any Public Offering will only be made pursuant to an Underwriting Agreement,
the terms of which are subject to negotiation between the Company and the Underwriters. If for any
reason the Public Offering does not occur or the Underwriting Agreement shall be terminated prior
to the Closing Date (as defined in the Underwriting Agreement), the agreement set forth above shall
likewise be terminated.
| Very truly yours, |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
